Jabil builds momentum for business analytics

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1 Jabil builds momentum for business analytics Transforming financial analysis with help from IBM and AlignAlytics Overview Business challenge As a global electronics manufacturer and supply chain specialist, Jabil wanted to transform its finance data into a catalyst for problem-solving, using analytics to translate the data into business insight and action. Spreadsheet-based reporting processes were no longer providing the degree of insight that the business needed to maintain a rapid rate of growth. Solution Jabil built a comprehensive suite of analytical tools based on IBM Business Analytics software, and worked with AlignAlytics to drive adoption among financial analysts, senior executives and plant-based employees. Jabil is a supply chain management and electronic manufacturing partner providing customers with intelligently designed global supply chains and product manufacture and development in the healthcare, aerospace, industrial, clean tech, storage, telecommunications and consumer industries. With over 130,000 employees at more than 60 facilities across the globe, the company generated revenues of $17.1 billion in We have established ourselves as one of the leading companies in our field, and over the past six years our revenues have grown by more than 50 percent, comments Steve Thomson, Senior Director of Finance Transformation at Jabil. Our success is built on our efficient management of an incredibly complex supply chain and delivery of exceptional quality in our manufacturing services across a diverse customer set. We need to fulfill thousands of orders for our customers in a very dynamic environment. Our ability to react to change in our customers requirements and quickly manage and flex capacity, manufacturing resources and material supply is critical. Timely insight into the financial impact of these changes is a necessity to deliver a superior value offering to our customers. To gain that timely insight you need to gather, manage and most importantly analyze data effectively. Dealing with mountains of data Jabil generates a huge amount of data in a host of different systems at its production facilities. Collecting and analyzing this data was a huge challenge, and mostly relied on manual, spreadsheet-based processes. We wanted to build a consistent, centralized approach to the management and analysis of business information, comments Steve Thomson. This would help us shift the emphasis away from low-level activities like data gathering and report-writing, and increase our focus on gaining insight and taking action. We saw finance as an area of the business where a new approach to analytics would deliver immediate value; and we believed that if we could demonstrate the value of analytics in finance, it would serve as a beach-head for wider adoption in the operational areas of the business.

2 Business Benefits Provides insight that the finance department can use to guide action enabling a more proactive response to business problems. Improves service delivery to internal customers, raising the profile of the finance department within the organization. Reduces the monthly financial close from 12 days to just eight a 33 percent improvement. Enables self-service analytics, reducing the reporting requirements of the finance teams by 70 to 80 percent. Identifying areas for improvement The finance team mapped out all the places within their organization where people were creating reports, and identified a number of opportunities for improvement. In many cases, several people were spending time creating very similar analyses, which meant that work was being duplicated. More importantly, the lack of common data sources and methodologies for reporting meant that the results were often inconsistent. We knew that we could transform the way finance operated and the way it was viewed within the business if we could build a better set of tools for analytics, comments Patrick Patterson, Manager of Jabil s Financial Systems Group. We realized that first we needed to create some space to enable this transformation, and we looked to leverage the new tools to automate the reporting in our processes wherever possible. The first major area we identified for this improvement was external financial reporting the financial statements that we provide to the US Securities and Exchange Commission. Faster financial consolidations At that time, the creation of external financial reports relied on a complicated process, which involved finance teams at all Jabil manufacturing plants extracting data from their ERP systems, compiling spreadsheet workbook reports, and sending them to headquarters. The figures were then consolidated manually, which took several days each quarter. The finance team realized that IBM Cognos Controller could offer a much simpler, more automated consolidation process, and eliminate the need for spreadsheets. Working with IBM, the team implemented the solution and began rolling it out to 350 users first to the core team who handle the consolidation work, and subsequently to other departments such as tax and treasury. IBM Cognos Controller has enabled us to cut two to three full working days from the closing process for our SEC reports, comments Steve Thomson. It has also reduced reporting requests for data by 70 to 80 percent, because the end-users have a greater ability to obtain information for themselves. The tax department loves it too; consolidating and validating their tax cash forecasts used to take three business days, but now they can do it in a single day. Jabil has also made several acquisitions since the implementation of Controller. The new process for consolidations has made it significantly easier to bring the acquired companies on-board and integrate them into Jabil s external financial reporting processes. Ensuring that the solutions deployed are scalable as the company grows was a critical consideration, comments Steve Thomson. 2

3 Solution Components Software IBM Cognos Business Intelligence v10 IBM Cognos Business Viewpoint IBM Cognos Controller IBM Cognos TM1 v10 IBM Business Partner AlignAlytics With TM1, we have cut four days out of our internal monthly financial close, so the figures are available on day eight, instead of day 12. Steve Thomson, Senior Director of Finance Transformation, Jabil Building momentum for business analytics The success of the Controller project provided momentum that helped the finance team make a strong business case for a larger-scale analytics initiative, based on IBM Cognos TM1 and IBM Cognos Business Intelligence. The initial plan was to implement both solutions in tandem, but to reduce complexity and risk, the company decided to deploy Cognos TM1 first. We knew that the full value of the analytics solution would only be revealed once we had both Cognos Business Intelligence and TM1 up and running, but nevertheless, the phased approach delivered value at each step, comments Patrick Patterson. We now have 2,500 users of TM1 spread across 22 countries, accessing the server on a 24/7 basis. This level of adoption demonstrates how rapidly the solution became a vital tool for financial analysts and other stakeholders across the business. Jabil worked closely with IBM to optimize the quality of the data-feeds into TM1, and the solution provides a single repository of information with one version of the truth. The IBM Cognos TM1 solution is now the platform used for all elements of the internal financial management cycle, management reporting of forecasts, actuals, weekly indicators and cash management. With TM1, we have cut four days out of our internal monthly financial close, so the figures are available on day eight, instead of day 12, says Steve Thomson. We can also now see month-to-date information from our SAP ERP system on a daily basis, so we can identify any issues in real time, instead of waiting until a problem has already occurred. Our finance analysts find TM1 a very powerful resource for all kinds of analyses, and it s gaining traction in other areas of the business as the data repository of choice. In the near future, Jabil will begin using TM1 as a quoting and pricing engine, which will enable users to analyze why deals are won or lost, and what impact each potential deal has on the business as a whole. Our current system is an inefficient legacy tool, it really doesn t give us the level of insight we need, says Patrick Patterson. We asked one of IBM s competitors about their pricing analytics solution, and they proposed a one-year, $1.5 million project. Instead, we used TM1 to build a solution in two months, which should be going live very soon. Better business intelligence In the meantime, Jabil has also completed its implementation of IBM Cognos Business Intelligence, which uses TM1 as a data source and delivers highly intuitive and insightful analysis to users across the business. 3

4 We ve created an Analytics Library a set of tools that can answer 70 to 80 percent of the questions that most executives and managers need to answer. This means that self-service analytics has become a reality for the whole business. Patrick Patterson, Manager, Jabil Financial Systems Group The value of the work we ve done with TM1 is now really being brought home to the business through the adoption of Cognos Business Intelligence, says Steve Thomson. If you can present data in a way that people can understand at a glance, it empowers them to recognize trends, gain insight and make quicker and more informed decisions. The days of executives discussing the accuracy of the numbers are coming to an end; with Cognos, they know they ve got the right numbers, and they have more time to discuss what those numbers actually mean for the business. Patrick Patterson adds: The flexibility of Cognos Business Intelligence is great, because it allows each user to build their own dashboards that show them the information they need most. We ve created an Analytics Library a set of tools that can answer 70 to 80 percent of the questions that most executives and managers need to answer. This means that self-service analytics has become a reality for the whole business. Gaining new insights By providing new ways to slice-and-dice the data, Cognos Business Intelligence is providing new kinds of insight for Jabil, both financially and operationally. Before Cognos, it was difficult to see trends across both customers and plants. says Steve Thomson. With our new analytics solutions we are identifying patterns specific to plants and customers. This means we can see which types of orders are delivered most profitably by which plants, which helps us to identify areas of best practice. We can drill down into the data to understand the exact situation, which helps us find ways to copy the most successful working practices at other plants. It is also much easier to identify periodic patterns in forecasts and results, and take action to correct adverse trends. For example, Jabil has noticed that in some businesses, activity tends to peak in the final weeks of each quarter, as teams work feverishly to achieve their customer targets. If the company can smooth out these peaks and achieve a more consistent level of performance throughout each quarter, it may be possible to reduce logistics and overtime costs while continuing to meet delivery dates and financial targets. Increasing adoption Jabil is also investing time and effort in driving adoption of analytics beyond the finance team. Working with AlignAlytics, an IBM Business Partner that specializes in business alignment strategies, road map services and technology-enabled business analysis, has helped to demonstrate the value of an analytics-led approach to business management. 4

5 The development and deployment of our systems is allowing us to unlock the potential in our data assets to drive business insight, with the goal of creating an information competitive advantage. Forbes Alexander, Chief Financial Officer, Jabil In terms of executive buy-in, the workshops that we ve held with AlignAlytics have been invaluable, comments Steve Thomson. The AlignAlytics consultants walked our executives through an exercise where they used a sophisticated statistical model to simulate a business problem and the outcomes of various solutions showing how analytics-led decision-making leads to the best results. This went a long way in convincing even the most skeptical executives that analytics really matters. For four years, we ve been talking about changing the emphasis from data gathering and reporting to insight and action; now we re beginning to see it happen. Instead of spending all our time establishing the facts, we re now actually responding to them. As a result, the profile of the finance department within the business has been raised significantly, and we re able to provide a much better service to our internal customers. Forbes Alexander, Chief Financial Officer at Jabil, concludes: The development and deployment of our systems is allowing us to unlock the potential in our data assets to drive business insight, with the goal of creating an information competitive advantage. About AlignAlytics AlignAlytics helps businesses improve performance by enabling enterprise-wide execution. Through the use of a dynamic alignment framework, AlignAlytics connects every functional area of an organization and manages the people, processes, technology, and information necessary to execute in a complex environment. Since 1995, AlignAlytics has been engaged by a global clientele across a variety of industries in developing analytic solutions, skills and capabilities to master insights and decisions that drive key outcomes. Its technology-enabled advisors are recognized thought-leaders, whose solutions are employed worldwide by Fortune 1,000 firms and business partners such as IBM. To learn more about AlignAlytics, please visit 5

6 About IBM IBM 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. 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. For more information For further information please visit ibm.com/business-analytics Request a call To request a call or to ask a question, go to ibm.com/business-analytics/contactus. An IBM representative will respond to your inquiry within two business days. Copyright IBM Corporation 2012 IBM Corporation Software Group Route 100 Somers, NY Produced in the United States of America November 2012 IBM, the IBM logo, ibm.com, Cognos and TM1 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. Statements regarding IBM s future direction and intent are subject to change or withdrawal without notice, and represent goals and objectives only. Please Recycle YTC03542-USEN-00