Large Clothing Retailer Broadens Use of Business Intelligence Enterprise-Wide, Reduces Costs, and Gains 7,699,330 in Benefits with WebFOCUS

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1 HIGHLIGHTS Goal: Reduce costs, improve decision-making, and enhance overall business performance by deploying business intelligence enterprise-wide. Solution: Information Builders WebFOCUS Results: With WebFOCUS, the retailer has extended the benefits of business intelligence enterprisewide to thousands of users, while significantly reducing costs, lowering total cost of ownership, improving productivity, and increasing sales in its retail stores. As a result, it will see a projected, cumulative, five-year net benefit of 7,699,330, with a return on investment of 609 percent and a payback period of five months. Large Clothing Retailer Broadens Use of Business Intelligence Enterprise-Wide, Reduces Costs, and Gains 7,699,330 in Benefits with WebFOCUS In an increasingly competitive retail environment, one of Europe s largest clothing retailers believed that expanding its use of business intelligence (BI) would give it a solid edge. It was looking for a BI solution that would reduce costs, improve productivity, boost sales, and make BI available to decision-makers at all levels from the boardroom to its 2,500 retail stores. The company embarked on a comprehensive analysis of the solutions provided by the leading business intelligence vendors, including its existing supplier, MicroStrategy. It determined that WebFOCUS was clearly superior to the competition because of its flexibility, report-creation capabilities, cost effectiveness, and ease of deployment. It was also impressed by the simplicity of the interface for end users. With WebFOCUS, the retailer has extended the benefits of business intelligence enterprise-wide to thousands of users, while significantly reducing costs, lowering total cost of ownership, improving productivity, and increasing sales in its retail stores. As a result, it will see a projected, cumulative, five-year net benefit of 7,699,330, with a return on investment of 609 percent and a payback period of five months. Benefits Objective Benefits Achieved Deploy a business intelligence Because of the ease of WebFOCUS deployment and the simplicity platform enterprise-wide of its reports, business intelligence can now be used by 5,000 employees enterprise-wide. Eliminate server maintenance expenses Reduce report development costs WebFOCUS facilitated the elimination of the company s nine-server Wintel server farm, leading to a projected, cumulative savings of 1,856,912 over five years. By using WebFOCUS, the number of IT-maintained reports has been reduced from more than 500 to approximately 120. As a result of this and similar report-related savings, the company will see a cumulative, projected savings of 840,000 over five years.

2 Leveraging Business Intelligence Across the Enterprise to Minimize Costs The Organization A large European clothing retailer, with more than 2,500 branches and eight brands, as well as a growing number of international stores. The Strategy The retail industry, and in particular the clothing retail sector, has become extremely competitive in recent years, with consumers having far less brand loyalty than in the past. A large retailer with multiple brands and several thousand stores internationally took note of this trend, and recognized the increasing importance of gathering, storing, and analyzing a wide variety of accurate and timely information about customer behavior and the overall business. The company knew that in the increasingly competitive retail environment, a key to success was expanding the use of business intelligence. To address this need, the company built a sizable, robust, well-structured data warehouse for its central operations, supplemented by a BI tool. The BI tool was initially accessed by approximately 50 users. The BI tool on its own did not meet the retailer s needs, so the company deployed the WebFOCUS business intelligence platform across its enterprise. Overall Plan The retailer wanted to find a BI solution that would enable it to: Extend BI throughout the enterprise and to retail stores. The company recognized that its success could hinge on the quality and timeliness of the data available to executives and staff, including buyers, sellers, marketers, and employees in its retail stores. It was looking for a solution that would easily disseminate that information widely throughout the company and its many store locations. Work with JD Edwards. The accounting department needed a financial reporting and analysis solution that could seamlessly access JD Edwards GL modules. Overall, we were looking for a more powerful, flexible business intelligence solution that would help us improve the business, says the company s Business Systems Director. Ideally, it would reduce costs as well. 2

3 Key Benefits Reduced costs. Maintaining the number of servers required by the existing BI solution was expensive. In addition, experienced programmers were needed to create and maintain reports, also a costly proposition. WebFOCUS has minimized report maintenance, helping reduce costs and lower the total cost of BI ownership. Improved productivity. IT staff was spending unnecessary time maintaining reports more than 500 of them. WebFOCUS significantly reduced the time IT staff members spend on report administration, so they can focus on higher-value work. Increased sales. The bottom line was based on retail sales in its several thousand stores. With WebFOCUS, the company is boosting sales by arming those employed in its retail locations with information that helps them make timely, informed decisions. Retailer Reduces Costs, Increases Sales WebFOCUS is transforming the way we access and deliver information across the organization. We are empowering users with timely, accurate, and consistent information to help every employee make faster and better decisions. By doing so we are ensuring that every user s contribution can have a positive influence on the business. Business Systems Director The retailer performed a comprehensive analysis of solutions provided by the leading business intelligence vendors, including its existing supplier, MicroStrategy. The company determined that WebFOCUS was clearly superior to competitive offerings because of its flexibility, report-creation capabilities, cost effectiveness, and ease of deployment. The retailer was also impressed by the simplicity of the interface for end users. It planned to use the IBM iseries platform for its BI environment, and the tight integration between that platform and WebFOCUS was also an important consideration in its choice. In addition, WebFOCUS can easily access JD Edwards GL modules, and has a proven ability to scale to any size, making it easy for the retailer to roll out the solution across the enterprise and throughout its thousands of retail stores. By using WebFOCUS, it would not need to invest time or money in updating its existing data warehouse infrastructure. Other vendors did not support the IBM-based architecture, but because WebFOCUS works in any environment, it could be easily and cost-effectively deployed on top of the IBM data warehouse. We were moving from providing business intelligence to a relatively small number of users, to providing it for thousands of people, the Business Systems Director remembers. We needed a solution that could scale easily, that would be easy to use, and that would lower our total cost of ownership. WebFOCUS did all that for us, and proved to be the ideal choice. With its previous solution, reports were only available to approximately 50 users. It now can make reports available to several thousand people across the company. As a result, information can be strategically leveraged by employees across the company and all its brands, leading to better and faster decision-making, and improved overall business performance. Additionally, because of the flexibility of WebFOCUS, end users can create their own reports based on parameters set by the IT team, increasing the usefulness 3

4 and timeliness of reports. Those reports help them make more informed decisions about every aspect of the company s business, including marketing, purchasing, merchandising, and retail. WebFOCUS now brings the benefits of business intelligence to every level of the organization, instead of just a relatively small number of people, says the company s Business Intelligence Manager. This makes us a much more informed organization. Information Builders has proven to be an excellent partner for us. They don t just sell technology they understand our core business and help us build solutions customized for our needs. Business Systems Director WebFOCUS has very clear financial benefits for us, adds the Business Systems Director. It has also given us benefits not quite as easy to quantify. With WebFOCUS, we now have an operational business intelligence solution that puts information at the fingertips of users and helps shape the business and drive it forward. Bottom-Line Results The retailer was able to achieve a significant return on its investment in Information Builders technologies due to reduced costs, a lower total cost of ownership, improved productivity, and increased sales in its retail stores a projected, cumulative, five-year net benefit of 7,699,330, with a return on investment of 609 percent and a payback period of five months. (For more details, see the sections Project Costs and Calculating the Return on Investment.) The following chart provides a detailed, five-year analysis: Project Summary ROI 609% Payback Period (in months) 5 Cumulative Net Value 7,699,330 Net Present Value 6,245,057 Project Costs Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL Investment 397,500 27,200 84, ,615 Additional Support 74,241 74,241 74,241 86, , ,841 Integration Costs 168, , ,000 Total Project Costs 639, ,241 74, , ,203 1,264,456 Benefits Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL Cost Avoidance 278, , , , ,090 1,856,912 Report Development & Support Savings 56, , , , , ,000 Increase in Operating Profit 1,204,233 1,228,317 1,252,884 1,277,941 1,303,500 6,266,874 Total Benefits 1,538,769 1,711,700 1,792,266 1,910,462 2,010,590 8,963,786 Financial Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Net Value 899,028 1,469,458 1,718,025 1,796,433 1,816,387 Cumulative Net Value 899,028 2,368,486 4,086,511 5,882,943 7,699,330 4

5 Project Costs The project will cost the retailer 1,264,456 over five years: 509,615 in technology investments, 418,841 in additional support costs, and 336,000 in integration costs. Calculating the Return on Investment WebFOCUS is deployed on the IBM iseries/websphere platform, allowing the company to decommission its nine-server Wintel server farm, eliminating the costs associated with running and maintaining those servers. In addition, WebFOCUS licenses represent a 50 percent lower total cost of ownership than the previous solution. As a result of both of these savings, the retailer will avoid a projected, cumulative 1,856,912 in costs over five years. 7,699,330 5,882,943 4,086,511 2,368, ,028 Year 1 Year 2 Year 3 Year 4 Year 5 Cumulative 5-Year Net Benefit IT staff spends less time creating reports than with the previous solution. The number of IT-maintained reports has been reduced from more than 500 to approximately 120 guided ad hoc-templates. WebFOCUS also requires less support. As a result of this reduced IT dependence, the retailer will see a projected, cumulative benefit of 840,000 over five years. The retailer has also significantly increased Cost revenue as a result of its use of WebFOCUS. Staff Avoidance Increase members in have access to reports to help them maximize Operating Profit 21% each brand s profit potential, by providing important, up-to-the-minute sales 70% Report and analytical information. Staff can now do sophisticated market basket Development & analysis, analyzing how shop window displays drive Support sales Savings of clothing, and to find the best mix of clothes to sell. Armed with that information, 9% the retailer can mix and match clothing styles based on customer behavior, to drive additional purchases. Cumulative 5-Year Net Benefit = 7,699,330 In addition, weekly reports are now sent out to retail stores, showing store managers what their best-selling items are, and comparing them to brand-wide best-sellers. Armed with this insight, store managers can determine whether 5

6 4,086,511 C a s e S t u d i e s 899,028 2,368,486 Year 1 Year 2 Year 3 Year 4 Year 5 they should better promote brand-wide best-sellers in their stores. Store managers also get mid-week sales snapshots, Cumulative which 5-Year allow Net them Benefit to make better decisions about stocking and merchandising for the second half of the week. As a result, they have seen significant additional revenue and a projected, estimated five-year increase in operating profits of 6,266,874. Increase in Operating Profit 70% Cost Avoidance 21% Report Development & Support Savings 9% Cumulative 5-Year Net Benefit = 7,699,330 Defining the Numbers Return on Investment (ROI) is the percentage return expected over a period of time. In this instance, we are measuring ROI over a five-year period. ROI is the total benefit divided by the total costs. The retailer achieved a five-year ROI of 609 percent. Payback Period is the time it took for the project to yield a positive cumulative cash flow. Expressed simply, it is the time it takes for the financial benefits to exceed the cost of the project. In this instance, the Payback Period was five months. Cumulative Net Value shows the total benefits achieved by the project the total benefit minus the project costs. For this project, the Cumulative Net Value will be 7,699,330. Net Present Value is an easy way to determine if a project has generated a profit, and if so, how much. It shows the ongoing benefit of a project in terms of today s money. It is calculated by taking the cumulative present value of the expected return of a project over a specified period of time minus the initial costs of the project. The Net Present Value for this project will be 6,245,057. Average Annual Benefit is the annual benefit divided by the number of years, regardless of costs. In this instance, it will be 1,792,757. Average Annual Total Cost of Ownership is the total costs divided by the number of years in the project. For this project, it will be 252,891. 6

7 About Information Builders Information Builders award-winning combination of business intelligence and enterprise integration software has been providing innovative solutions to more than 12,000 customers for the past 35 years. WebFOCUS is the world s most widely utilized business intelligence platform. It provides the security, scalability, and flexibility needed at every level of global extended enterprises. Its simplicity helps create executive, analytical, and operational applications that reach dozens to millions of users. Information Builders iway Software suite provides state-of-the-art, multi-purpose, pre-built integration components that address all SOA, application, data and information management requirements. Its integration adapters have been adopted by the leading software platform providers. Information Builders also offers solutions in the performance management, business activity monitoring, and enterprise search markets. The company s comprehensive enterprise product offerings give Information Builders customers the ability to grow and innovate according to their needs. Information Builders customers include most of the Fortune 100 and U.S. federal government agencies. Headquartered in New York City with 90 offices worldwide, the company employs 1,450 people and has more than 350 business partners. About Case Study Forum Case Study Forum is the leader in the writing and production of ROI-focused Case Studies. In addition to a customer success story, each ROI Case Study provides insight into the business impact the revenue, productivity and cost savings the customer achieved as a result of the investment made in the solution or service. For more information, please contact Case Study Forum at , or visit The information contained herein is subject to change without notice. The only warranties for products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. Case Study Forum and Information Builders shall not be liable for technical or editorial errors or omissions contained herein. 7

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