Avnet Kopp turns to BI to secure competitive advantage

Johannesburg-based electronics components distributor, Avnet Kopp, a wholly owned subsidiary of the $9 billion, Phoenix, US-based, Avnet Corporation, has implemented a new business intelligence system to hone its competitive-edge and improve sales in what is described as one of SA's most cut-throat and price-sensitive sectors.

The company, a global and local leader in the supply of an extensive range of electronic components, commissioned BI specialist, Synergy Computing, to implement a Cognos-based solution to give it better insight into customer buying patterns to be better able to recoup lost business.

"Component distribution is a complex and highly competitive business with customers continually involved in new developments and new projects running parallel with old systems. We want to find out where we are losing on price and missing existing business. This is where we see Cognos giving us the competitive advantage," says Richard Sidney, Director, Avnet Kopp.

"Business can be lost on a few cents price differential, so it is vital we keep on top of buying trends - what our customers were buying a year ago, what they are buying now and what they are not buying that they once used to."

Avnet, which has branches in Durban, Cape Town and Stellenbosch, uses Microsoft Great Plains as its core computing system, but found that its previous reporting system was too basic to deliver business information that managers could 'slice and dice' to analyse the business.

Synergy designed the new solution around Cognos PowerPlay and Impromptu reporting tools, generating statistical and graphical reports. Access is currently limited to directors and financial and sales managers via dedicated terminals, but Sidney envisages it being rolled out to other departments as needs are identified and cost justified. Data from Great Plains and a front-end sales system are integrated into a SQL data warehouse running on a 1gigabit network.

"There was a lot of information locked into Great Plains and not being able to access and analyse it quickly and easily was making our business more difficult," says Sidney.

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Rather than adopt a 'big-bang' approach to BI implementation, Avnet has decided to address pain points initially on a trial basis with sales identified as a key area that needed to be addressed. The first data analysis cube to be developed by Synergy was a sales cube that married supplier and sales information.

"Our primary goal with the sales cube is to regain old sales and business that has decreased at certain customers. If we realise these objectives, then the system will have more than paid for itself. This is where we see the return on investment," he says.

Avnet considered various options before choosing to go the Cognos route via Synergy Computing, which, according to Sidney, was selected because of its extensive BI experience.

"Synergy are very professional and it has been a good implementation with Synergy being very responsive in supporting us whenever we hit a brick wall," he says.

With the sales cube fully implemented and proven, the company is considering the development of a purchasing cube to address inventory and supply chain management issues. This will facilitate the just-in-time distribution model it operates under and ensure its quoted prices are not impacted by the vagaries of exchange rates.

The system is also enabling Avnet to close the information feedback loop between itself, its customers and suppliers, and plans to distribute performance reports to all parties to improve communication and enhance service levels, which, in a price-sensitive industry are crucial to ongoing sales success.

Future plans include using the system for forecasting and delivering key performance indicators directly to executive management PCs using dashboard technology.