Profiting From Business Intelligence

When Rust-Oleum Consumer Brands Canada decided to deploy a business intelligence (BI) package, the company was only looking to get its monthly paper sales data in a weekly electronic format. A little more than a year later, they're using BI to gain a competitive advantage in such tangibles as shelf placement and the effectiveness of weekly promotions.

Rust-Oleum, a retailer of paints and finishers and a subsidiary of RPM International, has found out what other companies are also discovering: accurate and up-to-date BI solutions are affecting the bottom line in industries as diverse as wholesale, retail and manufacturing.

Better Information, Better Decisions

"It's clear that the more current information allows you to make better business decisions," says Curt Root, controller at The Gillette Group, a Pepsi bottler in La Crosse, Wisconsin. The Gillette Group is currently migrating its Salient Corporation's Margin Minder BI solution to the enterprise edition in order to incorporate all of its databases in the enterprise.

Rust-Oleum is using Hyperion Solutions' (Nasdaq: HYSL) Performance Suite, which includes enterprise reporting and ad hoc query in an integrated server environment. The Structured Query Reports (SQR) product, which Hyperion gained from its 2003 acquisition of Brio, has helped Rust-Oleum not only become quicker to react, they've also become proactive.

"Hyperion mentioned that weekly promotion effectiveness reports help category managers to identify factors affecting product sales," says Matt Roher, category manager for Rust-Oleum. So much help, in fact, that the reports have gained the company category captaincy at several retailers. That can lead to a large competitive advantage, because, "we set the standard for doing business," Roher says.

Using BI information, Rust-Oleum now has a closer affiliation with some of its retailers. "Our approach is to go in and say here is what's happening with your business overall, here are steps you can take to increase your business overall within this category," Roher says. "Some of it may include [our brand] some of it may not include our brand." That kind of relationship often leads to better shelf placement for Rust-Oleum, which leads to increased revenue.

'Economic Efficiency'

Improving the bottom line is the reason BI is one of the fastest growing corporate tools. "It's about economic efficiency," says Guy Amisano, president of Salient Corporation. "If a retailer is worried about the net value of a supplier, a supplier is worried about the net value of a retailer. And that goes all the way down the value chain," he says. The more suppliers and retailers can rely on precise, real-time data, "the more accurate their decisions will be and the more efficient the spending will be against those decisions," Amisano says.

Knowing where and when to spend precious revenue dollars is one of the key goals of BI. The Gillette Group, the bottler for Pepsi, has a complex pricing structure, and relies on BI tools to manage massive amounts of data points. Each year the company adds stock-keeping units (SKUs) and has to manage their distribution. "We can't have 50 or 60 days on inventory on every SKU we have," Root says. "You want to be everything to every customer , and you can do that, but you wind up carrying too much inventory," he says. That can be a problem with a product that has a limited shelf life.

Without BI, the company's sales and accounting staff could only get that kind of information through weekly or monthly sales reports, which came in stacks of paper at the end of the month. Those reports were key to adjusting prices competitively, "but nobody had time to look through it," says Patti Gillette-Ostrom, the group's director of IT.

Now, with Margin Minder's BI tools, all the data from each invoice goes into the company's host system. Gillette-Ostrom says they can drill down on each data point, whether it's sales, returns, or deliveries. For example, they can now track items that were delivered out of sequence, which helps them find out what's causing more work for their delivery trucks. Fixing that problem saves time and money.

Staying Ahead of the Game

That points to another key trend in BI today: companies are striving to take proactive measures.

"One of our customers said what they want to be doing as a business is spending less time dissecting the past, or performing autopsies on what happened, and more time influencing what might happen in the future," says Tobin Gilman, senior director of product marketing for Hyperion.

As the BI tools become easier to use, that goal is becoming more of a reality. The data is getting into the hands of the decision-makers, and that saves time. It also saves operations costs. "If we didn't have Margin Minder, I would have [to have] a much larger IT staff to get the reports they say they need," says Gillette-Ostrom.

Perhaps more importantly, decisions are being made in real-time, and that is also giving companies a competitive advantage.

"Microsoft calls it BI for the masses," says David Cybulski, solution development director, Business Intelligence, at Avanade, an integrator for Microsoft (Nasdaq: MSFT) solutions. "Business intelligence is now coming down to the account officer who is picking up the phone and talking to the client. It's the business intelligence of being able to see well, what am I doing with that client? What kind of profit do I get with that client? What kind of cross-sell opportunities do I have? That kind of info that would often exist just at the very top level is now at the desks of everybody," he says.