Mestek breathes new life into legacy systems with analytics

Extending the value of existing ERP investments with help from IBM Business Analytics Software Services

Published on 14-Nov-2012

"If we’re able to deliver the dashboards that we’ve planned, we will extend the value of our existing systems very significantly. This will help us avoid an ERP/MRP replacement that would probably have cost several hundred thousand dollars." - Stephen M. Shea, Executive Vice President and Chief Financial Officer, Mestek


Industrial Products

Deployment country:
United States

BA - Business Analytics, Business Integration, BA - Business Intelligence, Enterprise Resource Planning


Mestek is an industrial company that specializes in heating, ventilation and air-conditioning, metal-forming machines, and architectural components. This privately owned company employs 1,800 people and generates annual revenues of approximately $300 million. Its head office is in Westfield, Massachusetts, and it operates from 25 locations across the United States, China, and several European countries.

Business need:
Spreadsheet-based reporting processes made it difficult for Mestek’s finance team to meet the needs of internal stakeholders and adapt to organizational changes such as corporate acquisitions. The company’s ERP system was heavily customized to meet its specific day-to-day operational needs, but lacked certain easy-to-use analytical capabilities. However, replacing it would be a complex, hugely expensive project.

Mestek decided to integrate its ERP system with IBM® Cognos® Express and create a range of analytical tools for financial reporting and planning. IBM provided Guardian Services: assessing the existing environment, advising on solution design, providing assistance for the implementation, and delivering training and education for users and technical teams.

Extends the life of Mestek’s existing ERP solution, avoiding potentially hundreds of thousands of dollars in replacement costs.

Will provide deeper insight into financial data without the potential errors and manual maintenance of a spreadsheet-based approach. Skills transfer from IBM will help the Mestek team become more self-sufficient and develop their own analytical tools in future.

Case Study

Mestek is an industrial company that specializes in heating, ventilation and air-conditioning, metal-forming machines, and architectural components. This privately owned company employs 1,800 people and generates annual revenues of approximately $300 million. Its head office is in Westfield, Massachusetts, and it operates from 25 locations across the United States, China, and several European countries.

Mestek has grown both organically and by acquisition, and sells a multitude of products under a wide range of brands. Each brand is treated as a separate division within the corporate structure, and understanding the financial performance of each brand – and each location – is a complex business.

“Like many manufacturing companies, our financial reporting, both external and internal, as well as most of our production processes, are managed by a legacy ERP/MRP solution that runs on the IBM i platform,” says Stephen M. Shea, Executive Vice President and Chief Financial Officer at Mestek. “It’s a reliable system, and over the years it has been heavily customized to the needs of our specific business. The down-side is that it lacks some of the easy accessible reporting and analytical capabilities of modern ERP systems.”

The smart option
To produce its monthly and annual financial reports, Mestek relied on a complex process that involved extracting general ledger data from the ERP system into numerous linked spreadsheets. With financial figures coming in from 25 different locations, and a corporate structure that grew increasingly sophisticated as new acquisitions were integrated into the company, it was becoming increasingly difficult to maintain the spreadsheets and produce reports that satisfied customers within the business.

“We had two choices,” comments Steve Shea. “We could either replace our whole ERP/MRP infrastructure with a more modern platform – a project that would have represented a significant risk to our business and cost hundreds of thousands of dollars – or we could extend the life of our existing systems by integrating them with a new business analytics toolset. The second option was much more attractive to us – provided we could implement the right tools to meet our needs, and build the expertise internally to maintain the new reporting and analytical system.”

Mestek evaluated a number of leading products, and ultimately chose to implement IBM Cognos Express.

“IBM Cognos Express was a new offering that IBM was aiming at mid-sized businesses, and the more we looked at it, the more it seemed like the right option,” says Steve Shea. “In a single, cost-effective package, it offered both the sophisticated analysis tools that our business unit managers and controllership teams need, and the ability to present data in an intuitive, graphical way for business users who aren’t necessarily trained accountants.”

Gaining self-sufficiency
Mestek’s financial department has a small in-house IT department, with limited experience in implementing business analytics software. The company quickly realized that it would need external support to design and deploy the new solution successfully, and decided to call on IBM Business Analytics.

The IBM consultants provided a set of Guardian Services that focused on four key areas. First, they performed an assessment of the existing environment to understand the system in detail. Second, they provided advisory services to help design a new architecture that would better serve Mestek’s objectives. Third, they assisted with the implementation and configuration of a new IBM Cognos Express environment – designing a general ledger cube that handles the company’s complex allocation drivers and completely replaces the old spreadsheet-based reporting process. Finally, they provided education, in the form of user training and skills transfer.

“The Guardian Services from IBM were really valuable, giving us a structured approach to deploying the new solution that ensured it would meet our business requirements,” says Steve Shea. “IBM’s lead consultant on the project was absolutely excellent. He had a very analytical mind, and was able to listen to our business problems and translate them almost instantly into the underlying technical issues. He helped us totally redesign the general ledger cube from the ground up, and it now works very well. Best of all, he made a lot of effort to involve our own technical team in the project, and by learning from him, they have become more or less self-sufficient in terms of building cubes, writing allocation drivers, and handling the day-to-day management of the solution.”

Creating a data-driven business culture
Several Mestek employees have also taken part in formal training courses provided by IBM Business Analytics Software Services. A two-day course on report writing with Cognos Express Reporter helped introduce key members of the finance team to key concepts such as slices and snapshots, while the IT team have benefited from courses on a number of key technical areas.

“We’re impressed with everyone we’ve dealt with at IBM,” says Steve Shea. “The next phase of the project, which is critical, will be to introduce dashboards for executive users, sales and marketing teams and various others, and although there’s still a long way to go, IBM has been helpful in this area too. They not only provide technical help about how to build the cubes, but they are also teaching us a lot about how to present the data and create dashboards that are genuinely compelling and intuitive.

“The key to unlocking the real benefits of our investment in Cognos will be in putting all the metrics in a single dashboard, in a graphical format so that business users at all levels will be able to understand them. This will help us create a culture where business decisions are based on timely data presented in an easily accessible format.”

Even though Mestek is still only part-way through its business analytics journey, the IBM Cognos Express solution is already delivering benefits for the organization. By eliminating the old spreadsheet-based processes and providing a more secure foundation for financial data, there is much less scope for human error. As a result, data quality has improved and business users feel more confident in the reports they receive from the finance team.

Steve Shea adds: “Above all, we’ve already shown that IBM Cognos Express is able to give our ERP/MRP platform a new lease on life. If phase two of the project is successful, which we certainly anticipate, and we’re able to deliver the dashboards that we’ve planned, we will extend the value of our existing systems very significantly. This will help us avoid an ERP/MRP replacement that would probably have cost several hundred thousand dollars – not to mention the disruption and the business risk of the implementation process, which we’ve seen at first hand can be considerable.”

He concludes: “Without IBM’s help, none of this would have been possible. The excellent support from IBM Business Analytics Software Services and the breadth and depth of their product knowledge have been critical to the success of our analytics initiative so far. We’re sure the IBM consultants will continue to play a valuable role in helping us deliver phase two and continue to build up our own in-house skills.”

About IBM Business Analytics Software Services
As an integral part of the Business Analytics software division within IBM Software Group, the Business Analytics Software Services organization provides education and expert services exclusively focused on the Business Analytics product portfolio. Our depth of experience and extensive proven practices help customers maximize their software investment, mitigate risks, raise the quality of their implementations, and build valuable skills. We have provided training, guidance, advice, reviews, assessments, and assistance to thousands of clients around the world helping to ensure their business analytics implementations are optimized to take full advantage of our product capabilities.

About IBM Business Analytics
IBM Business Analytics software delivers data-driven insights that help organizations 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 visualize 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, organizations can align tactical and strategic decision-making to achieve business goals.

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Products and services used

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

Cognos Express

Operating system:

Software Services for Business Analytics

Legal Information

© Copyright IBM Corporation 2012. IBM Corporation, Software Group, Route 100, Somers, NY 10589. Produced in the United States of America. November 2012. IBM, the IBM logo, and Cognos are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. It is the user’s responsibility to evaluate and verify the operation of any other products or programs with IBM products and programs. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. The client is responsible for ensuring compliance with laws and regulations applicable to it. IBM does not provide legal advice or represent or warrant that its services or products will ensure that the client is in compliance with any law or regulation.