Business Mergers’ Profit Enhanced By Well Designed BI Solution

Two manufacturing firms – one in the US and one in Canada – were merged to provide a strategic advantage in the market. Their blend of capabilities allowed them to provide distinct value to multiple industries such as construction, materials handling, agriculture, and transportation.

As a multinational firm which has undergone mergers and acquisitions, the new company had multiple and disparate IT systems. They were seeking a more simple and timely way to access business data and improve its decision-making process to successfully serve customers in North America, Latin America, Europe and Asia.

Their staff was becoming overwhelmed with the number of systems and data sources. They needed a consistent, accurate data repository for reporting and analysis. The disparity in the sales and distribution models among the different business units were further complicating matters.

To the Rescue – A BI Bridge and Gasket Solution

The client was surprised to learn how datacubes could be used to ‘bridge’ data from their various ERP systems and other sources including Excel. Business users would then have access to a consolidated view of sales and profits across divisions and regions.

The datacubes dramatically reduced the IT reports backlog and accelerated the ability to create complex one-off analysis required in competitive and dynamic international markets. This is the Gasket.

Leaking Profits Saved by a Web Store

The Business Intelligence solution provided other benefits. A user analyzing the datacubes discovered that customers that bought on-line were paying full price while phone orders were often discounted. A decision was made to restrict the discounts available for certain items. This immediately drove profits higher as on-line ordering increased and profit margins were restored.

Poor Forecasting and the China Syndrome

In the past, sales were forecast based on key attributes including customer group, geographies, product classes, and related criteria. Over time the accuracy of the forecasts was steadily decreasing as more and more products were sourced overseas, particularly China.

As more and more products were sourced overseas, the purchasing options for end customers increased. Often there were similar products offered by Chinese suppliers that were only slightly different from similar products sourced in North America.

Customers took advantage of the competitive price and quality combinations. As supplier substitutions increased, sales forecasts based on the old model became less and less accurate. The business model was changing from customer driven to product driven.

Once the root of the problem was identified, a solution was developed to help manage a product-driven business model. The key was to start from user perspectives and work backwards toward the data.

Learn how focused business intelligence for mergers and acquisitions will bridge disparate data and help you better manage multiple business models. Our BI Road Map Accelerator offers a try before you buy option for immediate, low-risk results.