SABMiller rolls out IBM Cognos TM1 across its African operations

Creating a standardised planning solution to increase consistency between countries

Published on 15-Apr-2011

"IBM Cognos offers us a world of possibilities. Our current solution is both sustainable and scalable – and as we extend it, it will improve our business processes even further. We're absolutely confident we've made the right decision with Cognos." - Iain Stockill, MIS Manager for Africa/Asia SABMiller

Customer:
SABMiller

Industry:
Consumer Products

Deployment country:
South Africa

Solution:
BA - Business Analytics, Business Integration, Business Performance Transformation, BA - Performance Management, Optimizing IT, Information On Demand

Overview

SABMiller is the second largest brewer in the world by volume. It operates across six continents and in some sixty countries, and brews beer brands such as Grolsch, Peroni, Pilsner Urquell and Miller Genuine Draft. On the African continent, the group has interests in more than a dozen countries, and has a hub office located in Johannesburg. The African region alone generates more than 2.5 billion US dollars a year in revenues.

Business need:
SABMiller has local subsidiaries across Africa from Angola to Zambia. Different countries were using different solutions for financial planning, which resulted in each country creating and owning separate systems that ultimately did the same job. The high cost of bandwidth in Africa meant that it was not feasible to implement a centralised solution.

Solution:
The company created a standardised solution for financial planning based on IBM® Cognos® TM1, and deployed it locally in each country. This allowed the company to spread a consistent set of budgeting and forecasting practices across multiple business operations, while minimising its reliance on expensive and unreliable communications networks.

Benefits:
Enables the collection of accurate and consistent data from different countries, delivering more accurate results for region-wide planning. Provides a standard methodology for budgeting and forecasting processes, so employees can move from one country to another without retraining. Eliminates the need to support multiple platforms or maintain IT teams in each country, as the solution can be developed centrally and then rolled out to each country.

Case Study

SABMiller is the second largest brewer in the world by volume. It operates across six continents and in some sixty countries, and brews beer brands such as Grolsch, Peroni, Pilsner Urquell and Miller Genuine Draft. On the African continent, the group has interests in more than a dozen countries, and has a hub office located in Johannesburg. The African region alone generates more than 2.5 billion US dollars a year in revenues.

In Africa, the company’s financial operations were managed separately by each individual country. In particular, each business had its own methods of producing budgets and forecasts: some used spreadsheets, while others had developed small-scale Microsoft® SQL Server databases or other applications. The results were variable and took an inordinate amount of time to generate, and it was difficult to compare between countries. The challenge was to create a single view of the budgets and forecasts across the African region, and persuade each business unit and subsidiary to shift to a new working model.

Iain Stockill, MIS Manager for Africa/Asia SABMiller notes, “Decentralised budgeting and forecasting meant that every country had a particular way of doing things. Each subsidiary had its own set of technical experts managing their own systems and processes. Getting accurate figures for region-wide budgets and forecasts was hugely complicated. We wanted to standardise these processes in all our businesses.

“We went through a list of the usual vendors and evaluated a number of products. Ultimately, we wanted a tier-one product that was sustainable in the long run and could match our growth in terms of scalability. We also needed a product that could help us solve one of the biggest problems that any African organisation faces: bandwidth.”

The bandwidth challenge
The high cost and low reliability of communications infrastructure in many African countries make it extremely difficult to implement centralised IT solutions that need to transfer large volumes of data from one location to another.

As a result, SABMiller decided to take a different approach: the main IT team in Johannesburg would develop a standardised solution that could be rolled out and installed locally in each of the countries. This would encourage every country to use the same methods to manage their financial planning processes, while only requiring minimal amounts of data (i.e. the final budgets and forecasts themselves) to be transferred to the company’s Hyperion Financial Management system.

“The key was to find a solution that could process the data locally and then replicate the results reliably from local systems to the head office,” says Stockill. “We saw a variety of demonstrations from vendors including IBM Cognos, OutlookSoft and Infor. Based on its inbuilt replication functionality, the IBM Cognos TM1 solution won. It was the right product for us, and within a year we began deploying it across Africa.”

Aligning business practices
SABMiller’s primary goal for the new solution was to streamline the creation of budgets and forecasts, and improve their precision and timeliness. By providing a set of standard workflows for these processes, IBM Cognos TM1 is helping to eliminate inconsistencies and allow each country to report its figures more accurately.

Says Stockill, “We are quickly eliminating the ‘cottage industries’ of report writing and data analysis. The IBM Cognos solution provides a sustainable and standardised approach, which creates trust in the information. This has a number of advantages: for example, individuals at the operating level are working on a robust and stable system that is providing accurate data. This means that they can spend less time collecting and validating the data, and more time analysing it.”

Accuracy and speed improves business
The IBM Cognos TM1 solution provides SABMiller with a tool to focus on the high-value items that make up the budget and forecast numbers.

“As an example, the solution we have built has a strong focus on the generation of manning costs, which in our business account for a large portion of the fixed costs. The solution gives us a bottom-up approach to building the manning costs, and accounts for variable drivers that contribute to the result.

“The process of capturing the information into the TM1 system has identified numerous errors in previous budgeting models, and the solution has provided some rigour around the process – no more formula errors creeping in at the last minute to distort the answer.

“With the incorporation of the actual results into the system, the tool can be used in conjunction with Cognos BI to report an ‘actual vs. budget vs. forecast’ result from a single platform, thus eliminating the need to move data around various platforms for comparative purposes.”

Central management, regional deployment
The decentralised deployment model that SABMiller is using for the Cognos solution not only reduces the need for communications bandwidth – it is also proving very successful in terms of minimising IT management costs.

Stockill comments: “With IBM Cognos we are able to install the software in every country as an exact replica of the production system in Johannesburg. We can develop and configure the solution centrally, and then simply roll it out for local deployment across the continent – which means we don't require special technical skills in each country. We have also started to retire a number of legacy systems and eliminate the old spreadsheets, which further reduces the company’s total management overhead.

“Another major benefit of this approach is that it now only takes a few weeks to get a new country on board, because we have a prebuilt model that we can just deploy – we don’t have to start from scratch. Corporate acquisitions and international expansion are a major part of SABMiller’s business strategy, so it is important that we can take a solution into a new company or country and deploy it easily.”

“Finally, the fact that the processes are standardised in all countries will enable significant gains in business efficiencies. For example, when an executive or manager moves from one business to another, they will already know how the software and processes work, so they won't need additional training to learn a new system.”

The future of business intelligence
SABMiller has now completed the initial rollout of the IBM Cognos TM1 software, and is reviewing the solution to discover ways to simplify and enhance it.

Iain Stockill explains, “We're at the start of our management information journey, and IBM Cognos TM1 is helping us ensure that we’ve got a firm foundation for accurate data collection and analysis. Now that we've completed these first steps, we have embarked upon an installation of the IBM Cognos 10 Business Intelligence suite, which will enable us to slice and dice the information sets more effectively.

“That will drive a whole new process for us to start creating web dashboards to deliver information, and developing slick solutions on mobile technology – making life easier for users and IT staff alike.”

He concludes: “IBM Cognos offers us a world of possibilities. Our current solution is both sustainable and scalable – and as we extend it, it will improve our business processes even further. We're absolutely confident we've made the right decision with Cognos.”

About IBM Business Analytics
IBM Business Analytics software delivers complete, consistent and accurate information that decision-makers trust to improve business performance. A comprehensive portfolio of business intelligence, predictive analytics, financial performance and strategy management, and analytic applications provides clear, immediate and actionable insights into current performance and the ability to predict future outcomes.

Combined with rich industry solutions, proven practices and professional services, organisations of every size can drive the highest productivity, confidently automate decisions and deliver better results.

Products and services used

IBM products and services that were used in this case study.

Software:
Cognos TM1

Legal Information

© Copyright IBM Corporation 2011. IBM Southern & Central Africa, Private Bag x9907, Sandton, South Africa, 2146. Produced in South Africa, April 2011. All Rights Reserved. IBM, the IBM logo, ibm.com, and Cognos are trademarks of International Business Machines Corporation, registered in many jurisdictions worldwide. A current list of other IBM trademarks is available on the Web at “Copyright and trademark information” at http://www.ibm.com/legal/copytrade.shtml. Microsoft is a trademark of Microsoft Corporation in the United States, other countries, or both. Other company, product or service names may be trademarks, or service marks of others. References in this publication to IBM products, programs or services do not imply that IBM intends to make these available in all countries in which IBM operates. Any reference to an IBM product, program or service is not intended to imply that only IBM’s product, program or service may be used. Any functionally equivalent product, program or service may be used instead. All customer examples cited represent how some customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics will vary depending on individual customer configurations and conditions. IBM hardware products are manufactured from new parts, or new and used parts. In some cases, the hardware product may not be new and may have been previously installed. Regardless, IBM warranty terms apply. This publication is for general guidance only. Photographs may show design models.