Hasbros compliance game plan

Famous for its traditional board games Scrabble and Monopoly, as well as a range of children's toys that includes Action Man and Transformers, games manufacturer Hasbro is a international leader in the entertainment market with a primary focus on getting its brands into more toy cupboards around the world.

With sales of nearly $3 billion in 2004, and more than 7,000 employees, the company tracks the lifecycle of each of its product lines with military precision. It has to take account of high seasonal demand, while also following a rigid calendar for new game introductions linked to film premieres.

Such complexity places a huge strain on its business applications, says Michael Elliott, head of information systems at Hasbro Europe. But then SOX came on the scene, he says, and the systems buckled. "We're New York stock exchange listed so Sarbanes-Oxley hit us right between the eyes."

While some European businesses are used to dealing with fairly benign regulations, senior executives in the US have found themselves struggling to deal with the stringency of the SOX regulations as they accepted that non-compliance is not an option.

Rather than run the risk of being deemed fiscally irresponsible in the face of a SOX enquiry, Hasbro was forced to put controls in place to ensure it reached compliance ahead of the December 2004 deadline.

"It really equates to buying a get out of jail free card," says Elliott. It was a non-negotiable decision if Hasbro was to protect its share price and avoid hefty fines and costly enquiries.

It decided it could meet many of its compliance obligations by adapting an existing enterprise content management (ECM) platform – Livelink from OpenText. At the time, Hasbro was using the system as a hub for engineers to share information on product development, regardless of geographic location.

Now all of the documents that staff at Hasbro produce are stored and secured on the system, with version control imposed automatically. The system also provides a repository for all compliance-related documentation and policies.

"In year one, if I'm honest, SOX was just a pain, but in year two we hope to see the benefits from streamlining processes," says Elliott. He estimates SOX will still cost Hasbro almost $10 million, even in year two.

According to John Shackleton, CEO at OpenText, businesses are frequently finding that compliance initiatives are costing far more than first estimates – bills two to three times initial expectations are not uncommon.

But while the finance executives might shudder at the extra overhead, the cost of non-compliance can be far higher. Fear of getting fired, ending up in court or even behind bars, has fuelled compliance spending, says Elliott.

At Hasbro, however, there has been a welcome side effect. It has dramatically lowered the time taken to find, deliver and communicate existing documents in hard copy format and that has helped lower time to market. The next step will be to leverage Livelink across the entire corporation worldwide.

"We want to go beyond content management and move towards digital asset management," says Elliott. "With better ease of use, there are no excuses."

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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