Case study

Edcon`s Buyers and Planners count on ProClarity to deliver the goods: the right assortment, at the right time and at the best terms Buyers at this leading South African retailer need to determine just the right merchandise mix the market demands and then negotiate the best terms; while it`s Planners concern themselves with healthy margins, good stock-turnover and on-time delivery. Both these key players rely heavily on ProClarity`s business intelligence platform to track and analyze vital indicators-sieving through 1.5 terabytes of business data-online and in real-time. What`s more, this success has encouraged Edcon to seek new application areas for ProClarity. Established in 1929, Edgars Consolidated Stores Limited (Edcon) has grown into the leading retailer of specialty clothing, footwear, household textiles and fashion accessories in southern Africa. It now boasts four retail chains comprising some 580 outlets-under such familiar names as Edgars, Sales House, Jet, Cuthberts, ABC, Smiley`s, Supermart, CNA and the Manufacturing Division-located throughout South Africa and neighboring territories.

Its customers are at the forefront of Edcon`s corporate values as it strives to become the `stores of choice` in its key market segments. In order to meet and maintain this business strategy, however, Edcon needs to monitor the market, its own retail brands and fashion and service requirements of its customers on the one hand, and its financial stability and growth on the other. At the heart of the retail process are Merchandise Buying and Planning, so focusing on them for improvement was therefore a logical first move.

Now, with ProClarity, Buyers are provided with knowledge of the market and customer. Not only does this prepare them to make just the right choice of merchandise for the retail chain they represent, but also strike the best deal with suppliers, importers, and wholesalers. Working alongside Buyers, well-informed Planners manage quantitative issues like margins, inventory, stock turns and delivery times more proficiently.

There were several practical reasons why Edcon`s incumbent analytic and reporting solution was found wanting when Edcon reviewed its operational and BI strategies in 2002, according to Calvin Low, Supply Chain Development Executive in Edcon`s IT department.

There were questions of disparate tools, unacceptable report lead-times, as well as performance issues and concerns of data integrity and duplication. In addition, its then-current solution was inflexible, costly to run and maintain, and limited in the maximum number of users. Most importantly, Edcon`s incumbent BI strategy was out of step with its new operational one, and there was a call for change.

"In selecting a new BI solution, Edcon stipulated a mixture of business, financial and technological requirements. The solution had to be capable of integration with MS Office-especially Excel (a company standard)-and generating standard reports," says Mr. Low.

Other requirements were derived from Edcon`s strategic BI principles. Firstly, the choice of data warehouse, the heart of its BI solution, is seen by Edcon as critical to its business operation and its business information strategy.

Traditional product information needs to be combined with market and customer information and made freely available to business users, and reports should drive further analysis. And, the solution had to be cost-effective with an acceptable total cost-of-ownership (TCO).

Following a selection process, ProClarity was chosen above the competition (which included Edcon`s incumbent BI suppliers), and for good reasons. "We were not interested in yet another tool for extracting data and producing static reports. We have a saying at Edcon: `Reports should not be the endpoint of information, but rather the starting point of dynamic analysis`. In short, we needed a friendly, centrally accessible, easy-to-use, flexible and fast tool that provided us with near real-time analytic capabilities, and a quick report-turnaround; one that allowed us to drill-down into our merchandise and location hierarchies, and across into other dimensions; and one that was based on Microsoft standards (SQL Server and Analysis Services), and which could easily be integrated with Excel. And that`s exactly what ProClarity has delivered," explains Mr. Low.

Implementation began in 2002. "Our ProClarity implementation team had a balanced and complementary mix of project skills and experience: Microsoft provided expertise in SQL, cube design and MS product expertise; Accenture in project management and back-end integration; and IS Partners provided the ProClarity BI and product expertise, and designed, developed and tested many of the reports. I was project owner, and was able to bring some of my retail-business knowledge and experience to the project," says Mr. Low.

"The implementation methodology we adopted was a combination of a traditional development methodology and Microsoft Solutions Framework (MSF). MSF provided an iterative methodology, while the standard approach formalized elements such as solution testing (integration, UAT, stress)."

"We decided on a design around a data model where we create separate cubes (30 base and 10 virtual ones), instead of a single, enormous one, for example. With cubes specializing in one or more analytic functions, like stock and sales, gross profit, assortment analysis or promotion evaluation, we can achieve significant performance improvements," reports Mr. Low.

In addition, the solution`s architecture caters for the diversity of input-data by introducing an Extract Transform and Load (ETL) software layer. Data from Edcon`s retail transactional systems (like Retek and Arthur) is first fed into this layer, where it is `cleansed` and converted into a standard relational format before being fed into the Microsoft Analysis Services cubes. This is done every night (the process takes several hours) and the re-populated cubes are then ready for the following day`s queries, analysis and reporting.

The ProClarity implementation went live in October 2002 within Buying and Planning departments. The BI configuration deployed consists of the ProClarity Analytics Platform with Business Reporter for Excel, Microsoft SQL Server 2000 Analysis Services and MS Excel.

There is a feeling of accomplishment at Edcon`s IT department. "ProClarity has delivered the flexibility, functionality, user friendliness and performance it promised, making the project a success. What is more, costs are down as well. Let me explain.

We looked at the previous BI solution we had-the license, operational and support costs related to the data warehouse product, together with the Unix hardware and software, and all the disparate BI tools we were using-and calculated TCO. Then we performed a similar calculation on the ProClarity/Microsoft solution and discovered that we had achieved a reduction in TCO-of at least 20 percent!"

ProClarity is also popular with users: "Historically, Buyers and Planners couldn`t analyze, for example, how a specific SKU (stock keeping unit) was performing, even though we did have the relevant data available. ProClarity now provides them with this `new` information in a very simple and intuitive way. Users are so impressed; they refer to the whole data warehousing solution as `ProClarity` which is quite a compliment when you consider that it is only one part-even though the most visible component-of this complex BI and data warehouse system we have implemented. And there is also a financial executive who personally requested recently that we convert one of his legacy applications to ProClarity," reports Mr. Low.

"Phase one has seen ProClarity implemented in three of Edcon`s four retail chains. Based on this success, Edcon has already embarked on two other phases where ProClarity techniques and technology will be deployed in monitoring and analyzing the entire Purchase Order Supply Chain and Customer Buying Behavior Patterns," says Mr. Low.

"As you see, ProClarity forms an increasingly important component of our new IT and Microsoft strategy in support of our ongoing business strategy. We currently have 200 users and we have just bought another 100 licenses to extend ProClarity usage to our top store-managers and executives as well (already one CEO is using it). Furthermore, deployment will also cross into other areas, such as Distribution, Marketing, and Accounts Receivable, as we move into the next phases."

"We are very proud of what we have achieved. Microsoft has described our installation as its largest data warehouse-currently 1.5 terabytes in size-in the Southern Hemisphere. But this is only a technological achievement. On the business side, the jawdropping response when users see ProClarity in action for the first time is a clear indication that we have now raised the bar for BI functionality and data warehousing for retail. Even better, we have a head-start on our competitors," concludes Calvin Low.