rapid development and planning
Challenge
As one of the world’s largest direct marketers of books and music with operations in North America, Europe and the South Pacific, the client employed a complex marketing planning process to drive sales. In order to create a fully integrated sales, marketing and operations system, the client endeavored to predict, at the individual unit level, sales on a rolling four years for over 1,000 concurrent marketing campaigns. Moreover, it desired that the entire plan be updated and then accurately reforecast weekly based on actual sales. The process in use required several weeks to recalculate total profitability and thus could not calculate profitability over time. The project was further complicated as it began at the onset of the digital distribution of music which fundamentally altered its core business model and placed tremendous pressure on its business model.
Engagement
We were engaged to propose, develop and implement a solution that enabled the desired prediction capabilities through a streamlined, flexible and real-time forecasting process. This process would be designed to meet the following objectives:
Solution
The planning process was completely redesigned to maximize efficiencies. An IBM Cognos Contributor application was developed in alignment with the new process to achieve the objectives outlined above. The system incorporated these key features:
The project was initially launched with only the client’s U.S. division. The prototype was demonstrated to management and end users, and met with resounding approval. The solution was redesigned for and implemented in the European and South Pacific divisions, resolving the many problems arising from multiple currencies, tax codes, postal systems and languages.
Results
The system fundamentally altered the planning processes and achieved cost savings in excess of 90%. Moreover, by integrating the planning and forecasting application with the existing reporting solutions, it offered the client fresh insight into its business. This new information and knowledge empowered the client to react to changes in its performance on a weekly basis. Most importantly, the solution predicted the impact of said changes in sales forecasting and real financial terms for the individual promotion and the entire company, allowing the client to make decisions with confidence.
As one of the world’s largest direct marketers of books and music with operations in North America, Europe and the South Pacific, the client employed a complex marketing planning process to drive sales. In order to create a fully integrated sales, marketing and operations system, the client endeavored to predict, at the individual unit level, sales on a rolling four years for over 1,000 concurrent marketing campaigns. Moreover, it desired that the entire plan be updated and then accurately reforecast weekly based on actual sales. The process in use required several weeks to recalculate total profitability and thus could not calculate profitability over time. The project was further complicated as it began at the onset of the digital distribution of music which fundamentally altered its core business model and placed tremendous pressure on its business model.
Engagement
We were engaged to propose, develop and implement a solution that enabled the desired prediction capabilities through a streamlined, flexible and real-time forecasting process. This process would be designed to meet the following objectives:
- Include interactive features allowing product marketers to change any of the 100 variables and recalculate the profit and loss statement instantaneously
- Ensure that actual sales data could be loaded weekly and would generate a new sales and product forecast automatically so that it could be distributed to other departments including shipping and manufacturing
- Allow the multiple sales channels to have customized models while ensuring a consistent view of financial and operational data across the enterprise
- Incorporate a robust multi-dimensional reporting solution to consolidate the data while enabling analysis on all of the 15 dimensions
Solution
The planning process was completely redesigned to maximize efficiencies. An IBM Cognos Contributor application was developed in alignment with the new process to achieve the objectives outlined above. The system incorporated these key features:
- A solution that decreased the 1-3 week manual process to a 1 minute automated calculation
- End users were afforded the ability to modify any variable and instantaneously see the impact on the bottom line
- Multi-dimensional reports were created on a weekly basis from data published by the Contributor application
The project was initially launched with only the client’s U.S. division. The prototype was demonstrated to management and end users, and met with resounding approval. The solution was redesigned for and implemented in the European and South Pacific divisions, resolving the many problems arising from multiple currencies, tax codes, postal systems and languages.
Results
The system fundamentally altered the planning processes and achieved cost savings in excess of 90%. Moreover, by integrating the planning and forecasting application with the existing reporting solutions, it offered the client fresh insight into its business. This new information and knowledge empowered the client to react to changes in its performance on a weekly basis. Most importantly, the solution predicted the impact of said changes in sales forecasting and real financial terms for the individual promotion and the entire company, allowing the client to make decisions with confidence.