Common Cold Remedy: Business Intelligence
We are in the middle of soup season. And to help consumers get the chill out during the winter months, supermarkets overload their shelves and stockrooms with canned and packaged soups. For the sales professionals at FIS North America, based in Solon, Ohio, that means stepping up their efforts on clients such as Campbell Soup Company, which uses FIS's flavored ingredients in its canned soup products.
As soup sales are highly dependent on how fierce or mild the upcoming winter months will be, Moises Cruz, assistant account manager at FIS North America, watches weather reports for phrases like "El Niño" and "La Niña." Because El Niño and La Niña have varying effects on temperature and precipitation in different regions of the United states, it creates the need for such granular information as state-to-state comparisons to help forecast sales.
The ability to forecast sales does not stop with soup. For more than 25 years, FIS North America, part of Food Ingredients Specialties and wholly owned by Nestlé S.A. in Vevey, Switzerland, also has been producing and marketing flavorings for dressings, entrées, sauces, and side dishes for the food processing industry. With more than 1,000 clients in more than 60 countries, including Campbell's Soup, Heinz, McCormick, and Nestlé, FIS North America needed a tool to help analyze and forecast buying patterns.
Enter Business Intelligence
Six years ago the executives at FIS decided to abandon its internally developed business intelligence (BI) software and partner with a vendor that specializes in business analytics. So they charged Patrick Wischmeier, IS manager at FIS, with the mission of selecting a BI vendor for the company. He considered three vendors, including SAP America and Infinium Software Inc., two of the most well-known BI vendors at that time. However, after some recommendations and some due diligence, he took a chance on a lesser-known company, Silvon Software Inc., based in Westmont, Ill., and its product Salestracker.
There were a few reasons for selecting Silvon. For Wischmeier, meeting with top executives at Silvon played an important role in his decision, as it enabled him to get to know the company more intimately. "I was very impressed by their culture. The president of the company came in and introduced himself. That was really good," Wischmeier says. The meeting also helped Wischmeier get a better understanding of the product's technological offerings.
"The product's technical architecture was impressive. It was very well-designed and easy for us to follow," he adds. "The coding of the product was well-written. It was easy for us to go in and build interfaces with it."
But while providing significant improvements over the previous BI application, Salestracker had its limitations. The sales data was delivered to the sales team in 100- to 200-page paper reports. So getting the data disseminated was "cumbersome and untimely," according to Wischmeier.
Whenever the sales team needed a specialized sales report, Wischmeier's IT staff had to spend time programming each report, some taking from three days to two weeks to generate. Additionally, his department often incurred the costs of hiring outside resources to complete a report. FIS would require between 20 and 25 specialized reports per year and some reports could cost several thousand dollars each.
The problems did not stop there. Once the reports were delivered to the sales team, they were burdened with problems of their own, mostly attributed to the rigidity of the paper-based reports. "With Salestracker we had to track new customer hits manually by spending hours and hours searching through pages," Wischmeier says. "We have so many customers that we couldn't keep track of them that way."
After four years of creating paper-based reports with Salestracker, the company needed something faster and cheaper. Silvon delivered when it introduced DataTracker, a client-based tool that provides the sales data directly to the field staff's laptops via the Internet. The data, which is updated daily, is highly customizable through the use of filtering techniques. Sales professionals can create reports highlighting state-to-state comparisons without requiring any programming from Wischmeier's team.
DataTracker is the foundation of Silvon's analytical applications. It provides online analytical processing functionality to help collect actionable information from transaction-based application systems. Business users can query the data mart to capture sales, financial, or manufacturing data. Once the query is submitted, DataTracker extracts, loads, and summarizes that data and makes it available for users to perform multidimensional analysis.
"When Silvon came out with DataTracker it was a nice progression for us," Wischmeier says. "We were in the Dark Ages. DataTracker opened the door for us. It's very user definable. Now I can cut the report the way I want. The database is more flexible in terms of how many sales elements we can look at. We can classify customers by region, product, uses, and more."
Access to that type of business analytics is key to survival, according Guy Creese, research director of Internet analytics at the Aberdeen Group Inc. in Boston. "Without that scorecard of how you're doing, you might not have the right information to tune your business. The issue is how to look at the customer in totality and figure out how [he] behaves."
As noted in a recent Gartner Inc. report titled, "Web Analytics: How Do You Know When You Win?" by Frank Buytendijk, a strategic data management analyst at the research firm, more than a year ago Gartner predicted that 50 percent of all e-business initiatives would fail partly due to the lack of analytics. Gartner defines Web analytics as metrics that measure the effectiveness of e-business operations, customer experience, and return on investment.
"The killer trend for e-business will likely be the real-time enterprise- -for example, an enterprise able to collect nearly instantaneous feedback on business processes and take the right adaptive, corrective, or preventive action. Web analytics enables executives and managers to know where the company stands in its quest to become a real-time enterprise and when the company will achieve real-time business capability across all channels," Buytendijk says.
While industry pundits agree that BI software is becoming a necessary business tool, Buytendijk says organizations are often paralyzed by three overwhelming factors: not knowing how to interpret Web data; not knowing how to use the data to understand customer behavior; and failing to define the right response.
Some immediate results were seen in FIS's sales and marketing groups, as DataTracker can tie promotional information back to a company's transactional system, or enterprise resource planning (ERP) system. "That type of data is not normally integrated into an ERP system. So companies do the planning and management of marketing and promotional information on spreadsheets and they capture actual promotions back in the general ledger, but no one has pulled all that data together in a whole picture of what's driving customer and product profitability. [Competing products] can't allocate that back to understand what's driving margin," says Michael Hennel, president and CEO of Silvon.
"The return on investment is far-reaching and difficult to calculate," says Hugh Rank, vice president of sales at FIS. It is difficult to put a value on time saved by the IT staff, the marketing team, the internal sales team, and the field sales team, he adds.
On a personal level the value is evident to FIS North America's Cruz. "It used to take me hours to bring in one territory with all of the customers and all of the products purchased for a particular year," he says. "Now it takes minutes. It takes a large part out of my number-crunching process. And the less time I spend number crunching, the more time I spend selling."
Customers are even taking notice of DataTracker's speed and reliability. "Some customers call us to find out what they're buying from us," Cruz says. "And I think, ‘Well you're buying it. Don't you know?' But they don't have the ability to pull the information as quickly as I can from DataTracker."
Much like a cell phone, it's difficult to prove the return on investment for analytics applications, but those who have implemented it successfully are raving about it. "When I look at the overall relationship and product I think it's been a really good return on investment," Wischmeier says. "It's paid for itself over and over. It's run without problems, which is great for me. Those are some huge benefits."
Moving forward, the use of analytics is expected to soar. According to Gartner's Buytendijk, by 2005 enterprises will need three times as many professionals on their analytic staffs as they need today.
FIS is already on its way to proving Buytendijk's prediction to be true. In the coming months the company expects to increase its analytics efforts by upgrading FIS's Canada and Mexico offices to DataTracker, as well.