Keeping a finger on the pulse of analytics

beyerdynamic increases sales success and growth using IBM technology

Published on 20-Dec-2012

"The system’s analysis and intelligence capabilities are impressive. Using intelligent algorithms, IBM Cognos Express is able to perform calculations at the touch of a button, showing which quantities of which product groups are being sold by which trading partners." - Wolfram Läpple, assistant manager and project manager for strategic projects, beyerdynamic

Customer:
beyerdynamic

Industry:
Electronics

Deployment country:
Germany

Solution:
BA - Business Analytics, BA - Business Intelligence, Big Data, Big Data & Analytics, Big Data & Analytics: Customers, Data Warehouse

IBM Business Partner:
Infomotion

Overview

Since its foundation in 1924, beyerdynamic has been a leading producer of professional audio electronics products, which it develops and manufactures in Heilbronn, Germany. The company’s products – such as microphones, headphones, headsets for TV commentators and pilots, and conferencing and interpretation systems – have developed a following of loyal customers around the world.

Business need:
The market for audio electronics is booming; new technologies and ever-changing trends create high demand and a dynamic business environment. beyerdynamic saw great opportunities for increasing profitability and driving growth by targeting global sales more precisely.

Solution:
beyerdynamic has introduced a business intelligence platform that gathers, processes and analyses corporate data. The new solution provides management with new insights into sales and marketing strategy based on sound evidence.

Results:
Increases global market share and growth rate – delivering a full return on investment within two years. Accelerates sales analytics processes from several hours to just a few minutes. Ensures data quality and reduces the error rate for analysis to zero.

Benefits:
Provides daily insights on market trends and demand levels, and uses this insight to expand the strategic vision for sales management. beyerdynamic is now able to analyse in real time which kinds of headsets are most popular in Asian markets, or how many microphones are sold in various European countries.

Case Study

To read a German version of this case study, please click here

Since its foundation in 1924, beyerdynamic has been a leading producer of professional audio electronics products, which it develops and manufactures in Heilbronn, Germany. The company’s products – such as microphones, headphones, headsets for TV commentators and pilots, and conferencing and interpretation systems – have developed a following of loyal customers around the world.

With the help of its 300 employees and numerous trading partners, beyerdynamic has seen a steady increase in sales in recent years. To support its growing international operations, the company has now established a presence in strategic locations in the USA, India and Singapore.

Keeping a finger on the pulse of the market
The market for audio electronics is booming. Headphones, for example, are back in fashion for mobile audio devices such as iPods and MP3 players. Technological innovations in TV and the multimedia sector, including a growing gaming market, are also driving demand for high-quality audio equipment. beyerdynamic benefits from these developments, and has reported annual growth rates of approximately ten percent over the past few years.

However, the market is in constant flux, as technological requirements and design trends are changing at ever-shorter intervals. “Anyone who wants to be a player in this global market needs to have their finger on the pulse, and must be able to respond quickly to market developments,” says Wolfram Läpple, Assistant Manager and Project Manager for Strategic Projects at beyerdynamic. “Transparency and vision are vital if your marketing strategy is going to be successful.”

Gaining vital in-depth insights for sales
beyerdynamic requires detailed information on sales by region and by product group, new orders, product combinations, and many other aspects of its sales processes. This information is essential in order to identify growth markets, design trends, promising products and appropriate trading partners.

“The data we needed was generally available,” says Wolfram Läpple. “But it was hidden in our ERP and accounting systems. Where is each sale generated? Which trading partners have purchased which products? It was tough to get at this information.”

If the board asked needed to know the current sales figures for a particular headphone series, it had to be patient. The task of extracting the data from the legacy systems and entering it into a spreadsheet depended on a single person. Sometimes considerable time could pass before sales-oriented analyses could be made available.

“The process was time-consuming and labour-intensive,” says Wolfram Läpple. “Moreover, it was error-prone and did not always yield a comprehensive answer, because the results showed only a limited section of the data. Whenever we discussed a new information system, we promised ourselves that it would be designed to help us sell more products and focus more on our core business,” says Wolfram Läpple.

Assessing the requirements
In November 2011, beyerdynamic decided to invest in a business intelligence system that would help to increase visibility of data throughout the company. The concrete requirements were that the system should extract data from ERP and financial accounting systems into a single, consistent database and prepare them for business-focused analysis. Moreover, it should allow sales managers, financial controllers and senior management to generate analyses flexibly and intuitively. These regular analyses would enable the company to adapt its sales and distribution strategy to market developments and to increase profitability.

In addition, beyerdynamic would now able to react to the demands of the market more quickly. For example, if the demand for conference equipment in Germany were to decrease, the production process could be adjusted in a very short time-frame to avoid over-production and high inventory costs. At the same time, it would be possible to increase the production of gaming headsets ahead of the launch of a new computer game. As a result, beyerdynamic would be able to react to the increased demand and serve its customers in time.

“The goal was not only to maintain our current growth, but to increase it even further in the medium term,” explains Läpple.

The pioneering spirit: the hunt for the right technology
Before this point, beyerdynamic had never implemented a properly defined reporting or analytics solution, which meant that the project had a pioneering feel to it. The first step was to evaluate the market. The requirements were clearly outlined: beyerdynamic was looking for a financially solid and reliable technology company that would be capable of supporting a long-term partnership.

A presentation from Infomotion – an IBM Business Partner – in February 2012 helped beyerdynamic make a confident decision: the company selected IBM InfoSphere Warehouse in combination with IBM Cognos Express. Wolfram Läpple explains: “Infomotion quickly recognized our economic and technological requirements, and demonstrated the possibilities of the IBM technology in a proof of concept.”

On the technological level, the IBM solutions met all requirements. “IBM InfoSphere Warehouse provides us with a data warehouse solution that can easily extract data from disparate systems and load it into a data structure that is ready for analysis,” says Wolfram Läpple. IBM Cognos Express also makes a valuable contribution to meeting the requirements: “The solution features flexible web access, intuitive controls and a wide range of capabilities for different types of analysis.”

High data quality as a knowledge base
Working with Infomotion, beyerdynamic began to build a data warehouse based on IBM InfoSphere Warehouse. Product data, sales data and financial data form the basis for the sales analytics solution. “We use IBM InfoSphere Warehouse to sort out our new data sets and structures, and provide standardised labels for product groups, target groups and country codes,” explains Wolfram Läpple. “The solution makes a real difference to our ability to analyse data.”

Next, the company deployed IBM Cognos Express. The web-based solution provides direct access to the pre-structured information held in the data warehouse, and ensures appropriate levels of access for different users. IBM Cognos Express Reporter makes it possible for users to serve themselves with the data they need – selecting, editing and generating ad-hoc reports and analyses.

Sharper analytical vision
For the past four months, the new information system has formed the basis for beyerdynamic’s daily reporting and analysis processes. Around ten users – including senior managers, financial controllers and area sales managers – log into the new system and gain the information they need in the form of standardised reports and ad-hoc analyses. The solution provides detailed insights into the sales figures and thus presents a comprehensive picture of current sales performance. “After just a short period of time, it is already clear that the solution will sharpen beyerdynamic’s analytical vision,” says Wolfram Läpple.

Analyses that had previously taken several hours can now be completed in minutes, as query parameters such as product group, sales region, period, or trading partner can be set flexibly, with just a few mouse-clicks.

For example, managers in the controlling department can easily find out how often the company sold its T1 model headphones with the new Tesla-sound technology in May 2012 in the southern sales region. They can also compare the numbers for different months with a click of the mouse. This gives the controlling department an entirely new factual basis for strategic planning.

“We can visualise market trends based on actual, current sales figures,” explains Wolfram Läpple. “The management can now identify and determine which products are performing well in which regions, and which are not.

“For example, the solution revealed that we had been selling a large number of our MMX 300 gaming headsets in Japan over a period of several months. Such insights make it possible to make real-world business decisions – such as promoting our gaming business in Japan by launching additional products and promotions. Specifically, we were able to intensify the marketing of the MMX 300 headset by launching a special marketing promotion, placing advertisements in various gaming magazines for its MMX 300 headset and introducing a ‘special product bundle’ (including the headset, the game and a special extension cable) just for the Japanese market.”

Putting the knowledge advantage into practice
The solution gives beyerdynamic an easy way to translate its strategic objectives into concrete actions – and monitor their success. Sales managers can supervise their sales regions in a targeted fashion by comparing actual performance against business plans.

“The system’s analysis and intelligence capabilities are impressive,” says Wolfram Läpple. “Using intelligent algorithms, IBM Cognos Express is able to perform calculations at the touch of a button, showing which quantities of which product groups are being sold by which trading partners. This also reveals the areas where cross-selling potential exists – for example, selling headphones together with accessories such as bags and cables.”

One major advantage – and guarantee of user acceptance – is the intuitive way in which the solution allows users to obtain information for themselves. “A sales manager needs concrete results and policy recommendations, instantly and without any programming knowledge,” comments Wolfram Läpple.

Overall, the solution makes the company’s sales teams more productive, and the enables them to measure their success. Was a sales target achieved in a particular region? Has a promotion in a retail chain produced the desired profits? For example, the company is now able to measure whether the increased marketing activity for its MMX 300 headset in Japan paid off: analysis revealed that sales rose by 30 percent over a six-month period for the headset bundle. In the future, the answers to such questions and the knowledge gained will be immediately integrated into the company’s sales strategy. As a result, beyerdynamic will be able to respond rapidly to developments and market trends, meeting customer demand and increasing business growth.

Outlook for the future: increasing intelligence
The concrete benefits of beyerdynamic’s investment in the IBM solution is already clear.

“We expect that the investment will pay for itself over the next two years,” comments Wolfram Läpple. As a result of the value that the solution is delivering, further extensions have already been scheduled: “Our future vision for analytics will really raise the stakes. Specifically, we want to introduce corporate financial planning that includes forecasting. This will help us continue to foster and promote international expansion and growth.”

About IBM Business Analytics
IBM Business Analytics software delivers data-driven insights that help organisations work smarter and outperform their peers. This comprehensive portfolio includes solutions for business intelligence, predictive analytics and decision management, performance management, and risk management.

Business Analytics solutions enable companies to identify and visualise trends and patterns in areas, such as customer analytics, that can have a profound effect on business performance. They can compare scenarios, anticipate potential threats and opportunities, better plan, budget and forecast resources, balance risks against expected returns and work to meet regulatory requirements. By making analytics widely available, organisations can align tactical and strategic decision-making to achieve business goals.

For more information
For further information please visit ibm.com/business-analytics

Request a call
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Products and services used

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

Software:
InfoSphere Warehouse, Cognos Express

Legal Information

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