Published on 06-Jun-2011
"The visibility that we now have during the month as opposed to at the end of the month is like night and day. We know where the issues are sooner and highlight them to the right executives so they can react accordingly." - Ian Farthing, Vice-President, Corporate Services at Dorel
Dorel Industries is a global manufacturer and distributor of juvenile, recreational and home furnishings consumer products. It is the world’s largest juvenile products company in its categories, and is the leading marketer of bicycles in North America. Headquartered in Montreal with a small executive management team, the Company has major operations in the US, Europe, Australia and Brazil. Dorel employs 4,700 people in 19 countries and its annual sales are US$2.3 billion in almost 100 countries worldwide.
Dorel Industries knew that effective financial and operational management depends on consistent, accessible analysis of business data – but the use of spreadsheets and independent solutions across different divisions made this difficult to achieve.
The company deployed a suite of IBM Cognos solutions, including Cognos Business Intelligence and Controller. In a second phase, IBM Cognos Mobile was implemented to provide senior executives with mobile access to analytics via their BlackBerry devices.
Delivers simpler, faster access to clear, reliable and timely information. Provides automated alerts, helping managers react quickly and keep operations on track. Mobile support gives executives all the facts at their fingertips – even while they’re travelling. Enhances business insight and efficiency while reducing manual effort. Has enabled a successful transition to International Financial Reporting Standards (IFRS).
Dorel Industries is a global manufacturer and distributor of juvenile, recreational and home furnishings consumer products. The company owns a powerful suite of brands, including Safety 1st, Cosco, Quinny, Maxi-Cosi, Cannondale, Schwinn, Mongoose and In-Step. It is the world’s largest juvenile products company in its categories, and is the leading marketer of bicycles in North America.
Headquartered in Montreal with a small executive management team, the Company has major operations in the US, Europe, Australia and Brazil. Dorel employs 4,700 people in 19 countries and its annual sales are US$2.3 billion in almost 100 countries worldwide.
Dorel operates a number of diverse and strong brands. The Company has three reporting segments which in turn consist of several divisions and subsidiaries. Beyond executive management, each segment has its own Group President and CEO, as well as a Chief Operating Officer. While separate management teams operate each business group independently, the organization strives to maximize cross-selling, cross-marketing, procurement and other complimentary opportunities. The Company had struggled with a common problem: too much data and not enough timely or consistent access to it. Spreadsheets and localized solutions helped to rein in some of the information, but it was far from ideal.
“Our issue was just getting consistent financial and non-financial data,” says Ian Farthing, Vice-President, Corporate Services at Dorel. “The problem was not knowing if information was coming in on a consistent basis across divisions; there were too many ad-hoc requests going on by different people in different formats. The mass of spreadsheets made our processes inefficient. We just knew that there was a better way to work.”
Beyond the benefits for corporate, certain subsidiaries also came to realize the benefits of a better business intelligence solution. According to one manager in IT: “Our divisional focus was on trying to sort through the tons and tons of data that we collect from our transactional system to help people get better reporting and analytics.
“Our drivers were taking the 300 or so reports that would go out to everybody at the end of the month. They were essentially three reports, but with all the different permutations it drove a lot of paper, a lot of things that could go wrong in the reporting cycle.”
The challenge was to find a platform that would allow senior management to better access and share information that was critical for timely operations planning. Also required was a unified solution that would streamline planning and forecasting processes and facilitate regulatory compliance. A performance management solution offered the answer.
Selecting the right vendor was an eight-month process. It began with an extensive needs survey.
“The journey began with us visiting the majority of our US and European subsidiaries to ask them their opinion about what they needed to accomplish in terms of reporting,” says Farthing. “It was the first time we initiated something like this from head office. What we were trying to accomplish was to satisfy needs throughout the corporation at all levels.”
Several vendors were in the running at the outset. Following a lengthy process of review, analysis and proof of concept, the company selected a suite of IBM Cognos performance management solutions – specifically, IBM Cognos Business Intelligence, Controller for financial consolidation, Cognos Planning and Mobile. Since then a Dorel subsidiary has also acquired IBM Cognos TM1 for planning.
Some of the key reasons for selecting IBM:
- A global as well as local presence, including a close-by implementation team.
- Strong worldwide support.
- A full suite of products that is well integrated, with flexible capabilities.
- Worldwide recognition that IBM Cognos solutions are a BI leader.
The implementation itself was executed as a two-phase process. The first phase was to deploy IBM Cognos Controller and IBM Cognos Business Intelligence in several business areas. With this platform, the organization can truly consolidate and deliver timely data to management in all locations. Most notably, providing access to the same information across geographies is improving decision-making across the company.
The second phase involved the roll-out of IBM Cognos Mobile, the use of Event Studio which provides management with alerts of deviations from expectations, as well as the integration of data from Cognos Controller into the BI interface for improved data delivery.
On the Cognos Business Intelligence side, Dorel has focused its efforts on reporting, dashboards and scorecarding. In this case, the company uses the solution for head office reporting. Financial and non-financial reports and dashboards can be accessed through a common portal.
Comments Farthing: “The visibility that we now have during the month as opposed to at the end of the month is like night and day. We know where the issues are sooner and highlight them to the right executives so they can react accordingly. Now it seems like second nature, but I have to say when we first rolled it out and they saw that it gave them an up-to-date report versus prior year by country, by customer and by SKU, etc., they were practically doing cartwheels.”
He notes that timely access to critical information is now available from the warehouse right up to the board room. Certain of the company’s divisions have developed their own dashboards, initiating even more data collection than required at corporate that they deem essential to run their businesses.
“What’s great is their dashboard is my dashboard. With the Cognos portal we have multiple tabs to toggle back and forth between high level corporate data and local divisional data. I think getting the data right is one battle, but being able to deliver it in the right way, on a timely basis is just as important. Having the data is great, but if you don’t get it in front of people, it’s really all for nought,” comments Farthing.
“I’ve been to board meetings, and I see the CFO with access to real-time information that is fully up-to-date. He can talk about this division and that division and this customer and that customer in a way that’s a lot more confident, backed up by data. And I think that’s very powerful. He has a report from Cognos that beforehand he would have had to ask for, and someone would have had to put together, and it was an ad hoc-type situation. Whereas now, he can access it himself, on demand.”
The ultimate goal is to get more people across the company to spend less time collecting information and more time analyzing and getting value from it.
“One thing we’re really happy with is the Event Studio in Cognos,” says Farthing. “It sends automated alerts whenever one of our key performance indicators shows more than a five percent variance from the forecast – which allows our senior executives to manage by exception. They don’t need to constantly monitor every aspect of every business unit, because the alerts tell them which areas need most attention. It also keeps the operational managers on their toes, because they know that when they make a change in their forecast, senior management is going to know about it!”
On the finance front, Dorel is using IBM Cognos Controller to automate and structure the financial consolidation process. The software is helping to improve efficiencies in preparing financial statements, and has strengthened the company’s internal control environment to meet compliance and regulatory requirements worldwide.
Controller’s global and localized reporting capabilities also open a world of information to executives and management. Users are based in Canada, the USA, Europe, Australia, Japan and Brazil, and the system is fully supported by one in-house finance resource.
“The information is now standardized and on demand, and it’s aggregated, it’s converted, it’s in local currency and it’s in our reporting currency,” says Farthing. “As an example, we have three big units in Europe: the UK, Dutch and French groups, but below that we’ve got Ireland, Germany, Portugal, Spain and more. These subsidiary companies were a lot less visible to the executives, but now that’s much improved.
“So now we don’t need to call local management in France and ask what’s going on. They already know what’s going on. If there’s a problem in a particular country they can see it immediately, where they didn’t have that visibility as easily before.”
In a major recent project, Dorel has successfully transitioned to International Financial Reporting Standards (IFRS). One of the challenges of this project was the need to have dual reporting for the transition year. That is, reporting under both Canadian GAAP and IFRS.
“Without Cognos Controller, we just wouldn’t have had the comprehensive, reliable processes we needed to support the IFRS project,” explains Farthing. “Since we already had the solution in place, converting to the new accounting standards was actually relatively straightforward as the software is built to handle multiple GAAP scenarios. I can’t imagine trying to do what we did with a spreadsheet-based solution.”
Once the management team had become accustomed to the ability to generate reports for themselves, Dorel decided to take the next step: introducing mobile access.
“Most of the executive team at head office travel a lot, but they have their BlackBerries with them 24/7,” comments Farthing. “We realized what an advantage it would be for them to be able to access their key reports while they were on the move, so IBM Cognos Mobile was an attractive option.
“Now it’s up and running, the users really love it. They are using analytics on a daily – or even hourly – basis, and IBM Cognos Mobile means that they always have the facts at their fingertips. If a question comes up while they are travelling or during a meeting, they can get the answer straight away. And personally, I’m a huge fan – I love creating custom analyses in Query Studio and then running them live on my BlackBerry.”
The ability to build queries and reports once and then run them on PC, laptop, BlackBerry, or whatever device is most convenient (known as the ‘author once, consume anywhere’ principle) helps executives get maximum value from Dorel’s investment in Cognos software.
“Another advantage of IBM Cognos Mobile is its support for different platforms,” says Farthing. “Although BlackBerry is currently our corporate standard, we’re starting to see iPhones and Android devices too, and it’s great that the Cognos solution supports them all. We’re also intrigued by the possibility of using iPads, so the news that the latest version of Cognos supports these too could be a big factor on when we decide it’s time to upgrade.”
Every deployment is unique and has its own set of challenges. What are the right steps to making it a success? Starting small and learning as you grow is a key factor. In the case of Dorel, gaining buy-in from the executive level and the wider organization were also crucial in making such a large project happen.
“We did a good job of engaging a lot of people early on in the process, and making them aware of what we were trying to accomplish and why we were doing it, and how it would benefit them and Dorel,” Farthing observes.
In terms of executive support, the company’s former Chief Operating Officer initially flagged the need for performance management, which proved to be a strong catalyst for change and improvement across the company. Though he has since left the Company, the strides made with his initial push have been picked up by other executives and today they are the ones driving the various initiatives currently on-going.
As an example, one of the company’s segment Chief Operating Officers has initiated the collection of detailed sales forecast data. This will then allow for reporting on forecast accuracy, a critical element of satisfying customers and controlling inventories. “We are just in the infancy stage, but I know the results will have an impact because they will be measurable and available to all stakeholders involved,” says Farthing. “Something like this has to be driven from the top. It can’t be driven from a lower-level individual. The fact that the executives are the ones putting their weight behind Cognos makes all of this feasible.”
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