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Maximize Business Performance

  • December 01 2004, 1:00am EST
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Early Payoffs Follow a Careful Software Selection

Last month, we looked at a real company, Novamex, as it embarked upon a quest for the right BPM software vendor. Their story continues as they navigate the choppy waters of implementation, but first here is a quick backgrounder.

Novamex is the leading marketer of branded Mexican food and beverage products in the USA. Their search for better budgeting and reporting led them, as it does many companies, to discover the strategic potential of BPM systems, and their project grew more ambitious. Karla Legaspy was the Novamex project lead.

Legaspy's team worked for several weeks with a consultant to define Novamex's requirements clearly and completely. It was agreed that Novamex needed to track a wide variety of metrics down to a granular level. Covering each SKU within a product line would open the door to flexible sales analysis and better decision making.

Getting these metrics in near-real time would allow faster decision making and responsiveness and enable Novamex's users to drill down from their strategic goals through the key performance indicators all the way down to the detailed supporting metrics. Additionally, with facilities and warehouses in both Mexico and the U.S., Novamex needed a scalable, automated consolidation solution.

The product evaluation process culminated in a tough battle between Comshare and Cognos, which Cognos won after Comshare's acquisition by Geac created a new risk consideration.

Early Success and Benefit to Sales

Novamex then launched several subprojects, an ambitious beginning dictated by Novamex's particular geographic and IT needs. A major but necessary subproject was to grow the datamart to become a full-fledged data warehouse to support reporting. Ideally, implementation would begin with the full-fledged data warehouse in place, thoroughly defined and running well; however, remember, we are talking about a company in the real world. Waiting to execute each subproject in the ideal order would have been easier, but it would have significantly delayed the early benefits that Novamex was able to achieve.

With the Cognos system itself, implementation began in two areas: budgeting and reporting. At the same time, Novamex began to bring its Mexican sister company into the BPM fold.

The reporting subproject required that Novamex's team link Cognos' Metrics Manager to the company's financial ledger system. Once this was done, Novamex had an early win by automating a series of sales reports and providing online access to them. Until this deliverable was achieved, the sales force had to wait for paper reports and phone the accounting department for detailed account data.

Liberato Aguilar, a brand manager with Novamex, has been making use of reports from the new system concerning profit analysis, sales history and detailed account analysis, and has found they already help him generate revenue for the company. Aguilar explains, "The new reports give me speed in analyzing information. Previously, I would have requested this analysis from the IT department and the turnaround might be several days."

Training is a critical aspect that Novamex provided during three-hour sessions for sales and marketing departmental users. Follow-up support has also been accessible to users. "Any time that I'm working with any report and I have any doubts I have the people from the reporting team available," comments Aguilar. In a statement that bodes well for user acceptance, he adds, "The only way to become familiar with the new reporting system is to use it as much as possible."

He mentions that in a specific brand, Novamex carries more than 40 different SKUs. Whenever the sales force analyzed a mix of products, it was a long and tedious process. "With this new software, the analysis is done in less than a minute, giving us a lot of information that translates into rapid decision making in sales strategies for each market."

From the finance side, the reporting benefit is also apparent. "Before this, our process was very manual, with more time spent creating and checking reports," says Legaspy. "Now we are able to get the reports out quickly and have more time to spend on analysis."

Taking Stock and Looking Ahead

Less than one year from implementation, 80 percent of Novamex's users have online access to at least part of the system for ad hoc inquiries. To allow for business changes, senior management has instituted the practice of holding a yearly strategic meeting to develop company goals, with the intent to annually update the mix of KPIs used in the performance management system.

Novamex plans to continue automation of its reporting and balanced scorecard, with auto alerts and Web-based solutions, as well as add consolidation. Novamex also needs to complete integration of the system with their sister company in Mexico.

Novamex's project objectives evolved during the vendor evaluation, growing from a desire to improve on Excel budgeting and reporting to a more sweeping performance management scope. The vendor selection followed a structured methodology, with a clear focus on top-priority requirements and careful evaluation of system capabilities. The implementation started with five sub-projects, a major challenge for a small IT project team. Early wins were achieved in a highly visible area: providing fast online sales reports and analytic capability to sales and marketing.

Karla Legaspy, the project leader, has some advice for those following in Novamex's footsteps. First, if possible, have the data warehouse in place before starting. Make sure it is well defined and working properly. Second, dedicate enough staff or consultants to serve as project resources for a quicker ROI. And third, she emphasizes that the finance group needs to keep in mind that while it will maintain the system and add new capabilities, its strategic potential is fulfilled only when their BPM solution is also used by end users throughout the company.

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