IHD, the leading distributor of pharmaceuticals, has gained access to more detailed and accurate reporting, business modelling and forecasting information since implementing a range of Cognos products. By using the solutions, it has also managed to postpone the upgrade of its Sun hardware infrastructure for four years and has achieved its aims at a fraction of the price originally anticipated.
Launched in 1993, IHD distributes product for a number of major multinational manufacturers including Abbott Laboratories, sanofi-aventis, Bayer, Boehringer Ingelheim, Bristol-Myers Squibb, Eli Lilly, MSD, Novartis, Pharmaco, Roche, Schering, Schering-Plough and Wyeth, directly to end dispensers such as doctors, clinics and pharmacists. Recently ownership of IHD changed to a consortium lead by US-based global supply chain specialist, UTi Worldwide.
UTi Worldwide and the local South African operation had already chosen Cognos as the basis for extending the functionality of its offering and adding value for its customers. The key benefits brought about by the adoption of this platform are already being enjoyed by a number of South African organisations, and will soon be rolled out to the international market. UTi already has the majority of the major players in this industry vertical as customers, and the extended features will be available to these organisations too.
At the end of October 1999, IHD experienced an "unbelievable growth period", according to Marius Claassens, IHD Information Systems Executive. This placed a lot of pressure on its mission-critical systems, warehousing and stock management distribution.
It was using a solution that had been developed in-house, but could no longer keep up with the increased volumes. In addition, the Sun boxes on which the solution was housed, bought at very high cost, were suffering under the increased load, primarily from the number of reports the business required.
There was no data warehouse, nor any data mining capabilities. All data was live and if a report was required, it was sourced from the in-house system on the operational boxes. If a number of users drew reports at any one time, performance was impacted.
Another disadvantage was although there was data, there was no information or knowledge base from which to draw. Thirdly, data was available only through reports, and not online to "slice and dice".
Graham Chapman, account manager at Cognos, says IHD requirements were to be able to report and analyse information relating primarily to warehousing and financials, to make the business more effective and efficient.
To achieve this, the operational system was divided into three layers. One was transactional, with the live operational mission-critical software. The second was the operational data store, fed by the transactional layer. That in turn fed the business intelligence (BI) layer. The aim was to run these on separate hardware infrastructures.
IHD chose Cognos because it already had PowerPlay licences, Cognos` online analytical processing (OLAP) product and a number of its clients also used Cognos software. It did a technical evaluation and consulted research from IDC and Gartner. Cognos was at the time the market leader and innovative quarters of the Gartner Magic Quadrant. "From a technological perspective, Cognos was the best fit to achieve the goals we had set," says Claassens.
It divided the reports it generated into business domains and specified the cubes in its enterprise data warehouse per domain, for example, finance, debtors, call centre and inventory.
Claassens says: "Through layering the system we managed to postpone the upgrade of our Sun hardware infrastructure for four years and have achieved our aims at a fraction of the price originally anticipated.
"We also created a management information centre outside of the IT department which assists management with business intelligence."
Data from 1999 to current is stored in a variety of data marts, such as sales information, debtors, inventory and call centre. Any information that is not available in cubes can be sourced from Cognos Impromptu, which delivers managed reporting, enabling report authors to create reports drawn from any data source.
Claassens says the information centre handles any requests for data and draws reports for the querying party. "If it can`t find the required information online, a request is logged via the call centre and the information is then forwarded to the person who requested it.
"Previously the operational infrastructure was overloaded whenever anyone wanted a report. Now, since defining the layering and moving onto a different hardware platform, that problem has been solved. We saved a lot of money on the operational system, which performs much better since the unnecessary load has been removed. It also now delivers not data, but information and business intelligence to managers and the company in general."
In the past, when IHD ran monthly reports, the live system was slowed down considerably. Using Cognos has alleviated that problem. In addition, IHD has found that extracting ad hoc reports is now quicker to accomplish.
Before switching to Cognos Finance, IHD budgets were done on Excel spreadsheets. "These were time-consuming to generate and when people made changes during the consolidation process, it took hours to get the balances correct.
"With Cognos Finance the consolidation process is much easier and shorter and everyone has the same view of the information," says Claassens.
IHD upgraded from Cognos Finance to its replacement product, Cognos Enterprise Planning. Claassens says: "Our users are thrilled with it, as it is so user-friendly. Many of them are used to working in Excel and some of the functionality there is found in Cognos Enterprise Planning, so it makes sense to them and they picked it up very quickly. It is used for budgeting and monthly variance reporting - users can view expenses versus the budget for the month and also insert comments where necessary."
IHD has two types of users, says Claassens. "Our client users are power users. They pull ad hoc reports and conduct investigations into those. The end-users can see information relating to the previous day, such as sales and expenses that have been incurred in the cost centre."
In addition, people in the branches can see what has been distributed and what expenses there were in their areas. The admin section has access to information relating to executive, procurement and information system expenses, as well as other non-corporate functions.
Chapman says IHD now has more efficient warehousing and stock control, and its financial information is more accurate, resulting in reports to management and executives being of more benefit.
In addition, the Cognos Planning tool integrates into the ERP system, allowing for more detailed and accurate modelling and forecasting.
Claassens says: "The Cognos implementation was very successful - all the goals we defined were achieved in such a way that information and business intelligence that was not previously available to the business is now being used on a day-to-day basis."
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