Spotfire Visualization from ERP Data Brings Clarity to Decision-Makers

by   |   October 31, 2012 3:51 pm   |   0 Comments

trucking co side by side with margin Spotfire Visualization from ERP Data Brings Clarity to Decision Makers

For a trucking company client, BUCS Analytics examined the economics of owning or buying transportation routes. The addition of color (blue is owned trucks, green is bought trucks) showed the company enjoyed higher operating margins for routes it own trucks ran that were less than 1,500 miles.

Small to mid-size manufacturers, distributors, and retailers come to Paul Buchanan because they want to compete with the big boys. To do that, they need big boy tools that can harness their data for business intelligence and better decision-making.

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“All of our clients are on their second or third generation of enterprise systems, so they’ve got pretty good data these days,” says Buchanan, president of Kansas City-based performance consultancy BUCS Analytics. “But that data is stranded across the enterprise. And the more they grow, that harder it is to corral.”

Buchanan launched BUCS Analytics in 2007, using spreadsheets and a proprietary methodology to analyze client performance and uncover opportunities to either increase efficiency or accelerate growth. “The thing that makes us unique is that we understand finance and return on capital. We understand what data we need, how to define it, and how to map it,” says Buchanan. “We load it into our databases with our own calculations to measure performance at every level.”

Working in Excel was fine for Buchanan’s numbers-driven business analysts with finance and supply chain backgrounds. But Buchanan’s clients didn’t necessarily see the world through Excel-colored glasses. So in late 2007, BUCS brought in TIBCO Spotfire to visually analyze the increasing volumes of its custom-calculated data.

Once a client hires BUCS, business analysts populate BUCS’ data warehouse with the company’s sales and performance history along with information on products, vendors, customers and locations. Using Spotfire’s in-memory analytics and predictive modeling, BUCS identifies performance and improvement opportunities in the areas of supply chain management, process management, and financial planning. The process takes weeks rather than months, with BUCS continuously importing customer data for quarterly reports and analyses. Meanwhile, Spotfire’s Web Player enables clients to drill into the data on their own via an interactive dashboard.

“We’re able to take all that ERP information and stand it up so you can see true performance down to the product, customer, and location level,” says Buchanan, whose small firm serves about 20 clients now. “We can see customer service trends, fulfillment rates, or growth rates across any dimension. We combine that with benchmarking data to identify the strengths and weaknesses to drive decisions in a way that optimizes value creation.”

BUCS recently analyzed the economics of a trucking company’s routes, comparing the cost structure of owning versus buying that capacity by distance. The visualization of the data made it easier for the trucking company’s executives to see that they enjoyed greater profit margins on routes run by trucks they owned when the distance was less than 1,500 miles. (See image above.)

“When you see that graphically, all five people in the room get the same message,” says Buchanan. “The numbers alone don’t let you do that.”

Similarly BUCS developed a sales analysis for a small cigar accessories manufacturer. They created the profile of a “good customer” by return on working capital. They also uncovered the top products in each category. “The sales guy now has all that information in his pocket,” says Buchanan. The data visualization can also provide a picture of sales team performance. “They can identify where a sales rep is weak and figure out how to fix that with better training or something,” says Buchanan. “Having that common framework creates a very directed dialogue and measurement system.” As a result, corporate sales grew 26 percent last year versus 4 percent the year before.

“Many small to mid-size businesses struggle to make sense of all the data that they already have. Even though they may already be using a business intelligence solution, it’s not always easy to surface up the data so that most people in the company can understand what it means,” says Laurie McCabe, partner with small to mid-size business analyst firm The SMB Group. “Data visualization tools help make it easier for people to get actionable insights.”

“You give an inventory manager a graphic of demand and a graphic of their inventory positions and purchase quantities outstanding alongside predicted future inventory levels needed based on forecast demand, and it immediately makes them whole lot more comfortable or a whole lot more alarmed,” Buchanan says. “They get it.”

Even better, says Buchanan, working in Spotfire makes it a repeatable process not only with a client, says Buchanan, but across BUCS client portfolio. “The analysis for distributor A can benefit distributor B,” Buchanan says.

The work by BUCS Analytics shows the potential for smaller companies to use data visualizations to make an important impact, said John Brand, vice president and principal analyst at Forrester.

Brand said that there has been a reluctance in the past among small- and medium-sized businesses to use data visualization tools.

“This is partly because of the high cost and complexity of some of the commercial tools that have been available in the market. As the capabilities have become more commoditized though, we do see that SMB’s are able to do some really interesting things – particularly with data visualization tools in the cloud and by creating very interactive mash-up style applications,” Brand said. “There’s some really creative stuff being done out there now and in some ways, some of the SMB’s who are really leveraging some of the cloud visualization and analysis tools are able to gain very significant benefits – sometimes over and above their much larger rivals. Some of this simply has to do with the fact that they are often much nimbler. But it’s also often to do with the volume, quality and complexity issues that characterizes much larger organizations.”

Stephanie Overby is a Boston-based freelance writer. Follow her on Twitter: @stephanieoverby.

Correction: The original version of this story misstated the first name of the president of BUCS Analytics. He is Paul Buchanan.

Editor’s note: On Nov. 1, this article was updated to include comments from John Brand of Forrester.

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