Published on 09-Oct-2008
Validated on 24 Jun 2010
"Previously, we would have an application created for us by an outside company. This became expensive, as an update to a third-party procurement application would have cost us $100,000. With Cognos 8 BI, we can create our own applications that are ten times more sophisticated and flexible than any of the applications created by third-party vendors." - ~ Felipe Herrera, Senior Financial Analyst, US Lumber Group
US Lumber Group
Wholesale Distribution & Services
Business Intelligence, Integrated Data Management, Leveraging Information, Smarter Planet
US Lumber Group is a $325 million, specialty, wholesale building-materials distributor with headquarters in Atlanta, GA. The company provides personalized customer service to more than 6,000 customers and currently distributes products from eight cost centers, providing service throughout 14 southeastern and mid-Atlantic states. US Lumber also distributes domestic and imported forest products from Europe, Canada, and South America.
View key performance indicators on an hourly basis to judge success and make more informed decisions related to business strategy.
A sophisticated business intelligence (BI) solution that provides in-depth reporting capabilities and can scale to meet the needs of a growing sales force.
Ability to develop more informed and accurate business strategies with greater insight into operations; increased customer satisfaction through ability to diagnose and solve issues quickly; significant reduction in software costs as compared with previous solution.
US Lumber Group is a $325 million, specialty, wholesale building-materials distributor with headquarters in Atlanta, GA. The company provides personalized customer service to more than 6,000 customers and currently distributes products from eight cost centers, providing service throughout 14 southeastern and mid-Atlantic states. US Lumber also distributes domestic and imported forest products from Europe, Canada, and South America
Known for its customer service and high-quality products, US Lumber’s sales force was rapidly growing. The company needed a sophisticated business intelligence (BI) solution to help calculate and analyze a year’s activities, including all their financial forecasting. The company was already using IBM® Cognos® ReportNet® and chose to migrate to IBM Cognos 8 BI in February of this year. More than 130 users across the organization access IBM Cognos 8 BI, running 500 reports with thousands of views. US Lumber is now able to view its key performance indicators on an hourly basis to judge success in its eight cost centers and make more informed decisions related to business strategy.
Initially, US Lumber had a small vendor providing day-to-day metrics. The Web-based application was limited to daily performance indicators and the overall data scheme was small in scope and difficult to extract.
“As the company grew and got more sophisticated, our ability to forecast a year’s activities became a lot more complicated with the tools we had available,” recalls Felipe Herrera, senior financial analyst at US Lumber Group. “At the same time, we were planning a major ERP upgrade and were told that the cost for financial forecasting with our current systems would be high. Given this situation, we decided to look outside of ERP for calculating our financial forecasts at a reasonable cost.”
Given the limitations of its current application, US Lumber set out to find a solution that provided in-depth reporting capabilities and could also scale to meet the needs of its quickly growing sales force. “We were held captive because we had to supply all of our data requirements to a third-party vendor,” comments Herrera.
The senior executives at US Lumber were first introduced to the IBM Cognos BI solution in 2005 at the annual IBM Cognos user conference, IBM Cognos Forum, and were impressed by its sophisticated Web reporting capabilities, its flexibility, and its ability to scale. US Lumber evaluated both OutlookSoft and IBM Cognos 8 BI, but ultimately chose IBM Cognos based on its corporate stability and better all-around solution. US Lumber decided that IBM Cognos 8 BI would enable its sales force to understand and monitor current performance while planning future business strategies.
The entire implementation process for IBM Cognos 8 BI took only one weekend. Two of the IBM Cognos trusted partners, Accumetrics and Loadstar, helped with the migration.
"Previously, we would have an application created for us by an outside company. This became expensive, as an update to a third-party procurement application would have cost us $100,000. With IBM Cognos 8 BI, we can create our own applications that are ten times more sophisticated and flexible than any of the applications created by third-party vendors."
~ Felipe Herrera, Senior Financial Analyst, US Lumber Group
Once the implementation process was complete, US Lumber began running approximately 500 reports, which created thousands of views. IBM Cognos 8 BI views enable data to be seen and understood relationally, which helps each cost center make more informed business decisions. US Lumber also runs a high-level, corporate overview report for the executives to view and analyze. This report details information on the company as a whole, providing a snapshot view that compares sales and operating costs among the eight branches.
“The daily metrics make it possible for everyone to see exactly where they are and what they’re doing in comparison with the other branches. All I have to do is just tell our sales force to use IBM Cognos 8 BI to find any information they need. It is very powerful,” comments Herrera.
The management, finance, procurement, marketing, and sales teams at US Lumber use IBM Cognos 8 BI to view data in a timely fashion and make better decisions for their business operations. Currently, 130 employees use IBM Cognos 8 BI, with the majority of users accessing reports daily. In the future, US Lumber will deploy IBM Cognos Contributor to help with product sales planning.
US Lumber also relied on IBM Cognos Support to assist with questions about the deployment of IBM Cognos 8 BI. “When we first migrated, IBM Cognos Support was right there beside us, helping us along with any inquiries we had on the technology. Our overall experience with IBM Cognos support for the past two years has been very good,” states Herrera.
“IBM Cognos 8 BI has opened the eyes of the corporation to how much data we actually have,” states Herrera. “We weren’t aware of how data-starved we were when we only had 12 reports to review and analyze. IBM Cognos 8 BI has really opened up our company data, giving us intuitive insight into the ways it is relevant and connected.”
With IBM Cognos 8 BI, US Lumber can now look at all types of data and analyze it on the fly, which helps make daily decisions for management easier and more accurate. Additionally, because US Lumber is able to view its key performance indicators—cost per pound and average margin per day per branch—on an hourly basis, its management team is equipped to understand how their business can be affected by one development instead of another.
“Previously, we would have an application created for us by an outside company,” saysHerrera. “This became expensive, as an update to a third-party procurement application would have cost us $100,000. With IBM Cognos 8 BI, we can create our own applications that are ten times more sophisticated and flexible than any of the applications created by third-party vendors.”
In addition to significant cost savings, IBM Cognos 8 BI provides Herrera with tremendous flexibility in creating new reports by combining data. Branch managers can now create reports that measure planning and reporting at a granular level—account-by-account and expense-by-expense. The company uses this insight into these metrics to assist in judging success and developing more informed business strategies.
IBM Cognos 8 BI has also enabled US Lumber to create a profitability application in which the company assigns costs to multiple items to various types of customers with different sizes of orders. The orders can vary from sending one piece of lumber to a customer to sending them a whole truckload of 45,000 pounds to another. Now, every order has different levels of profitability.
Most importantly, by having all the data in-house, US Lumber has complete control of the information and issues with reports or scorecards. The company is also able to immediately catch an order that was missed or billed incorrectly, and make the necessary adjustment the same day. Now, the sales team is better able to diagnose issues and solve them quickly, increasing customer satisfaction.
Herrara sums up his IBM Cognos experience, “I’ve been programming for many years. I know how a computer thinks and works. Right out of the box, IBM Cognos 8 BI was easy to pick up and start using. Our employees have also found it to be very user-friendly. IBM Cognos has been a real joy to work with and has made a huge difference in our organization.
About IBM Cognos BI and Performance Management
IBM Cognos business intelligence (BI) and performance management solutions deliver world-leading enterprise planning, consolidation and BI software, support and services to help companies plan, understand and manage financial and operational performance. IBM Cognos solutions bring together technology, analytical applications, best practices, and a broad network of partners to give customers an open, adaptive and complete performance solution. Over 23,000 customers in more than 135 countries around the world choose IBM Cognos solutions.
Products and services used
IBM products and services that were used in this case study.
Cognos 8 Business Intelligence
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