Leveling the playing field Business analytics for mid-sized companies

Contents

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Introduction Leveling the playing field Case studies: Casual Male Retail Group, Inc. Cumming Encore Enterprises, Inc. Krueger International, Inc. Lakeside Foods, Inc. Proper Group International TradeCard, inc. TradingPartners

What is your information-based strategy? You have more information at hand about your business environment than ever before, but are you using it to out-think your rivals?
Tom Davenport, Jeanne G. Harris. Competing on Analytics: The New Science of Winning. Harvard Business School Press, March 2007.

Leveling the playing field

Introduction
Decades ago, businesses relied on punched paper tape and big iron mainframes to support their operations. As the technology evolved, rooms filled with mainframes were replaced by streamlined servers that transferred computing power to desktops, then laptops, PDAs, tablets, and a continuing stream of new technology. Along the way, companies have increasingly leveraged technology to streamline business processes collecting and analyzing data with the goal of cutting costs, creating efficiencies, and gaining a competitive edge. Until recently, a companys level of technological sophistication was often pre-determined by how much it could afford to invest. But the advent of cloud technology has leveled the playing field for smaller companies with limited budgets, enabling them to leverage the benefits that cloud computing offers, especially in the area of data analytics. A recent Deloitte survey of mid-market CFOs and other senior executives showed that automation of business processes and data analytics/ business intelligence are their top investment priorities, along with cloud computing and software as a service (SaaS).1 The ability to leverage these technologies can help mid-market companies compete with larger companies in a cost-effective manner by better understanding their customers, operations, and overall business. This report examines how mid-market companies can benefit from analytics, with case studies that illustrate applicability and results.

Mid-market perspectives: 2012 report on Americas engine, Deloitte, May 2012.

Business analytics for mid-sized companies

Leveling the playing field

The worlds largest companies have been harnessing the power of business analytics for years. Now mid-sized companies are starting to get in on the action, using advanced data analysis to make smarter decisions and improve business performance. Business analytics spans a broad range of capabilities, from backward-looking approaches that focus on past performance, to forward-looking approaches such as scenario planning and predictive modeling that help companies prepare for the future. Business analytics also includes related activities such as data management, performance management, and business intelligence. Analytics-as-a-service is a new delivery model that uses cloud computing to provide business insights without requiring significant investments in internal infrastructure and support. The reports, dashboards, and scorecards delivered by analytics-as-a-service are typically preconfigured to reduce deployment time, focused on the needs of business users to drive adoption, and paid for on a subscription basis to reduce capital expenditures. Since the 2007 publication of Tom Davenports book, Competing on Analytics: The New Science of Winning, many leading businesses have recognized the value of using data to derive business insight. According to a recent survey, 97 percent of companies with revenues of more than $100 million are using some form of business analytics, up from 90 percent two years earlier.1 In the past, business analytics was most often used to address domain-specific or functional issues, such as supply chain optimization and financial forecasting. But now, business analytics is increasingly being applied to issues that are enterprise-wide. In fact, a 2011 survey report published in the MIT Sloan Management Review showed that 58 percent of organizations now apply analytics to create a competitive advantage within their markets or industries, up from just 37 percent one year earlier.2

According to Deloitte Analytics, the most common types of data analytics can provide companies with the following benefits: Customer analytics provides companies with actionable insight on their customers past, present, and future. These insights often result from forming a single, expansive view of customer relationships and behaviors across previously siloed products and channels. Armed with the new insights, companies can discover previously hidden up-sell and cross-sell opportunities, flag early signals of customer defection, and obtain better returns from marketing campaigns. Supply chain analytics empower companies with insights on demand patterns, supply and distribution networks, and customer service requirements across transactional and operational systems. In a volatile economic climate, and in the context of increasing globalization, analytics can help companies to cut procurement costs, identify anomalies and potential disruptions, forecast demand more reliably, optimize logistics, and gain a holistic view of their entire supply chain. Finance analytics help companies to manage performance in alignment with their business strategy. By helping them get control of their financial data, finance analytics enable companies to model business processes and gain deeper insight into cost and profitability drivers. Plans, budgets, and forecasts become more accurate, and companies can better understand the significance of KPIs and their true relationship to performance. HR (workforce) analytics help employers improve their workforce management processes by linking their HR strategy to analytical techniques. In an ever more diverse and decentralized workforce environment, insights gained from workforce analytics can help managers find ways to recruit and retain world-class talent, and address other data-driven workforce challenges such as employee safety. Tax analytics has become a crucial component of many advanced tax management approaches. Tax benchmarking, trend and data analysis, and predictive analysis are all approaches being used by tax leaders around the world to gain deeper insights into their tax processes and profiles.

1 2

The Current State of Business Analytics: Where Do We Go From Here?, SAS.com, September 21, 2011 2011 New Intelligent Enterprise Global Executive Study and Research Project, MIT Sloan Management Review, November 7, 2011

Leveling the playing field

The case studies in this report demonstrate how senior financial executives at mid-market companies are using business analytics to improve the management of their businesses and to better serve customers. Specifically, they address how mid-market companies are leveraging analytics to support business decisions in areas including: product management, customer management, service and operations management, enterprise management, and supplier/partner management. Highlights include the following: Real estate investment company Encore Enterprises Inc., uses data analytics for yield management to negotiate new retail leases; buy, sell, and build decisions are based in part on market data. Cumming, an international construction project and cost-management consulting firm, utilizes modeling when considering potential acquisitions to determine synergies, fit, revenue potential, cost efficiencies, profitability growth, and business valuation. For speciality retailer Casual Male, using analytics to monitor inventory, sales, and gross margin, helps focus buying, distribution, and pricing decisions. TradingPartners, a procurement, technology and services company, uses its own platform to create dashboard visibility to enterprise data that enables customers to make better decisions, negotiate more effectively, and manage their businesses more profitably. The practical experiences and insights from these and the other companies included in this report can help midmarket companies consider new ways to drive business value through advanced analytics.

Business analytics survey of mid-sized companies In February 2012, Financial Executives International (FEI) surveyed its member companies with under $1 billion in annual revenue to better understand how mid-sized companies are using business analytics. Among the 53 companies that responded to the survey, 89 percent are currently using analytics, with the greatest focus on financial and operational areas.
Business areas where analytics is being used Financial Operational Customer Strategic HR 42% 52% 67% 90% 98%

For mid-sized companies, most of the value currently being derived from analytics centers around efficiency and cost savings, with less impact in strategic areas, such as creating a competitive edge and enhancing customer relationships.
How data analytics add value Operational efficiencies Cost savings Competitive edge Enhanced CRM 38% 31% 90% 85%

Among the relatively small number of companies that are not using analytics, the main barrier is the perceived cost to implement.
Factors influencing the decision not to adopt data analytics Cost Who would implement Management buy-in Technology 22% 44% 56% 67%

One additional note on an emerging trend: 29 percent of the executives surveyed indicate that their companies are already taking advantage of analytics as a service.

Business analytics for mid-sized companies

CASE STUDY

Casual Male Retail Group, Inc. Taking inventory control to the cloud
With over 400 store locations, Casual Male Retail Group, Inc., is the worlds largest specialty retailer of big and tall mens apparel, with retail operations in the United States and England and direct businesses throughout the United States, Canada, and Europe. We are a multi-channel specialty retailer with four primary retail brands: Destination XL, Casual Male XL, B &T Factory Direct, and Rochester Clothing, says Dennis Hernreich, CFO. Our objective is to appeal to all of our customers, who are defined by their physical characteristic of being either big, or tall, or both, but otherwise represent all demographic and socioeconomic groups, by providing a good, better, and best array of product assortments in all primary lifestyles with multiple and convenient ways to shop. Operational analytics Our challenge is inventory control, explains Hernreich. We sell 2,500 different styles of mens clothing, and 59 different sizes of pants, and we need to know what inventory to buy, where to place it and how to price it. Casual Male originally engaged with a provider of analytics as a service through the cloud to quickly and economically add analytics to its business and monitor inventory and sales and gross margin. [That provider was acquired by Deloitte in May 2011 and now operates as part of Deloitte Analytics.] This provided cloud-based analytics solutions that we were able to deploy quickly to address pressing needs in our business, such as providing visibility into our direct (catalog and online) channel, and consolidating inventory data across six country-based web stores in Europe. As the companys investment in analytics grew to support the totality of the business, it transitioned to QuantiSense, a business intelligence tool. We have a department of 50 employees who use QuantiSense to manage the business with advanced analytics for merchandising. It helps us to decide what men will buy, so that we can optimize our gross margin. We may have spent $500,000 over five years on QuantiSense, but its value is a multiple of that amount. Customer analytics We use the Customer Relations Management module of Epicor, says Hernreich, which provides a repository for business intelligence. He explains, Epicor is an ERP system that helps us understand the behavior of our customers. It stores transactions by address, and uses algorithms to tell us who to contact and when during the year, so that we stay top of mind with our customers. Hernreich also uses Deloitte Analytics cloud-based inventory analytics for task management. This is a communications capability that provides information so that we can tell our stores what they should do each day, helping them to prioritize their activities.

This is a communications capability that provides information so that we can tell our stores what they should do each day, helping them to prioritize their activities.
Dennis Hernreich CFO, Casual Male Retail Group, Inc.

Leveling the playing field

CASE STUDY

Cumming Modeling helps shape business decisions

Cumming is an international construction project and cost-management consulting firm that delivers creative, customized solutions to a worldwide portfolio of clients. We are a professional services firm, says Brian Ruttencutter, CFO. We provide a range of professional services for building construction projects, including commercial and public sector projects. Our services include cost estimation, budget management, scheduling, project management, and program management. We are not a builder or developer. We typically provide our services either directly to the building owners or the owners architect. Financial analytics Ruttencutter explains that Cumming budgets revenues using a bottom-up approach by business unit, based on its hard and soft backlog. Hard backlog is work that is under contract, and soft backlog is work that we believe we will be awarded based on a probability analysis. We also prepare revenue plans by market segment and geographic location, Ruttencutter says. Additionally, we prepare complete detailed revenue, cost and EBITDA budgets for our various business units. We prepare periodic forecasts, using a similar approach. Other key metrics that we watch closely as key profitability measures include operations personnel utilization, available billable hours for operations team members, and average billing rate. Operational analytics Utilization metrics are big, says Ruttencutter. We look at the revenue curve of billable hours and calculate the average bill rate. The company also tracks metrics on new clients, new projects awarded, and new projects to be bid. For project management work, we monitor the schedule and costs of each project. Our expectation is that we can bring projects in early or on time, and below or on budget, Ruttencutter adds. Strategic analytics Some of our most significant strategic issues involve potential acquisitions, Ruttencutter says. For example, in 2008, just before the commercial building downturn, we anticipated that there would be increased construction in the public sector, so we acquired two small businesses in California and South Carolina that were 100 percent in the public school market. We continue to look at other potential acquisitions and this process requires a lot of modeling to determine synergies, fit, revenue potential, cost efficiencies, profitability growth, and business valuation. Ruttencutter says the company used a similar approach when it decided to offer constructability services several years ago. These services are aimed at evaluating how well a building is designed, he explains. Failure to perform a constructability review on a building project can result in change orders, which often help the builder but hurt the owner, since costs are higher when change orders are required. However, if we catch something in the design phase, it will help the client, because it will result in a better or more efficiently constructed building. Human resources analytics Cumming monitors average billable hours and charts FTEs by business unit, tracking both direct and indirect labor, and also keeps statistics on hires and terminations. Team members performance evaluations include both qualitative and quantitative metrics. We have been shopping for benefits lately and have changed carriers and brokers so that we can offer the best programs at the lowest cost to the company, explains Ruttencutter. We subscribe to external sources for salary and benefits surveys to ensure that we are providing competitive compensation programs. Customer analytics We use a rigorous business development planning process to identify new clients and projects, Ruttencutter says. Our business development team is tasked with identifying potential clients and new projects in accordance with an annual business development plan. They work diligently to grow existing relationships and develop new client relationships in an industry that is highly dependent on our reputation and image in the marketplace. In public school district markets, Cumming monitors new public school bond issues to help identify new projects and to determine which potential clients the company should contact.

Business analytics for mid-sized companies

CASE STUDY

Encore Enterprises, Inc. Migrating to the cloud promotes efficiencies

Encore is a privately owned national real estate investment company founded in 1999. The company is vertically integrated with four divisions: Retail (including shopping centers); Multi-family (including apartments); Office Buildings, and Hospitality (including resorts and hotels). Encores operational efficiency has allowed the company to stay ahead of the commercial real estate market curve during the recent recession, says Mahesh Shetty, COO and CFO. This efficiency, combined with disciplined underwriting, enables the company to capitalize on market trends providing returns in line with each investors set of parameters. The company has migrated many of its systems to the cloud, enabling it to reduce its accounting department from 25 people down to six (including Shetty), and its IT department from 15 people down to four (and to two by next year). These reductions save Encore $200,000 annually in IT costs, and $650,000 annually in accounting department costs. Meanwhile, the number of properties owned or managed has increased by 30 percent. Operational analytics According to Shetty, Encore uses data analytics for yield management and other key metrics across its operating divisions. Retail: We get market data on rent/square foot, which we use in negotiating new retail leases, says Shetty. The optimum rent/square foot will vary from market to market. Multi-family: At the corporate level, buy and sell decisions are based on market data, current interest rates and availability of bank financing, explains Shetty. At the property level, managers are permitted to make decisions on leases. For each apartment complex, we tell the manager what minimum revenue is required to break even with loan service costs, maintenance and property taxes. This minimum revenue provides a floor for the manager to consider when he or she is negotiating new apartment leases. We also give managers market data to use when negotiating leases, which allows leasing managers to calibrate lease renewals based on market demand and optimize rents. Yield management in the multifamily sector is a significant tool used to improve occupancy and rents. Breakeven is an internal threshold for measuring the leverage on each property. The managers are measured based on occupancy and rent/square foot and are incented based on overall profitability. Hospitality: The key measure for the hospitality business is Revenue per Available Room, or RevPAR, says Shetty. We get competitive market data from Smith Travel Researchs Online STR Report. This data helps us to do a sophisticated revenue management analysis, based on current occupancy and future bookings, so we can do real-time analysis of reservations. For example, we can lower room rates in markets that are slow, and we can raise room rates in hot markets.

Leveling the playing field

Strategic analytics [In multi-family], the decision to buy or build is based on market intelligence, says Shetty. We choose to develop properties in lieu of acquiring new properties because the spread between development costs and the market capitalization provides better returns for our investors. We do not try to time the market, but we use data to help us predict where the market is headed. For example, back in 2006, we were ready to buy some new hotels. However, our analysis of available data showed that these new hotels would not meet our Internal Rate of Return objectives. We then decided that if the market was not right to buy, maybe we should sell. We then sold a group of hotels, just before the financial crisis. Human resources analytics Our strategic objective in HR is to optimize or reduce headcount, says Shetty. We decided that what we were good at was financial due diligence and the development of new properties. So we decided to outsource everything else, including HR, benefits and risk management.

Our operational strategy is to: consolidate get our arms around our costs [through HR analytics]; automate reduce transactional costs, and outsource reduce costs by transferring work to lower cost locations. Using this process, we are able to [create] an efficient operation and reap cost savings from outsourcing. Customer analytics In hospitality, the hotel chains handle customer satisfaction for us, and we pay for the feedback data, says Shetty. We have been told that we own two of the top Marriott properties nationwide, based on customer satisfaction.

Business analytics elevates the role of the finance organization from record keepers to business partners who are proactively engaged with the business to improve processes and drive profits; finance becomes part of the strategy conversation and not a footnote in the execution.
Mahesh Shetty COO and CFO, Encore Enterprises, Inc.

Business analytics for mid-sized companies

CASE STUDY

Krueger International, Inc. Forecasting furniture solutions and market trends

Krueger International (KI), is in the commercial and contract furniture industry. Since the introduction of its first product in 1941, a steel folding chair, KI has recognized market needs and responded with furniture solutions for customers in higher education, K-12, healthcare, business and government. Financial analytics Each year, we do a five-year financial forecast in late summer, says Nicholas J. Guerrieri, CPA, the corporate controller. We complete next years operating budget by the end of December. Then, in February, we prepare a preliminary 24-month cash forecast. This working capital forecast is important because our segments of the industry are very seasonal. We update this forecast after the annual audit, and then again two more times during the year. Manufacturing operations prepares a monthly billing forecast, and the sales group prepares a monthly sales forecast. Consistent and relevant data is the result of consistent and relevant processes and procedures, Guerrieri adds. It is imperative that all levels of the organization understand how they influence outcomes and how their work products will be used. In the field, sales representatives must capture data that may not be specifically relevant to closing a particular deal. However, it is critical for setting future strategy and success. A key to success is continual reinforcement of expectations, as well as sharing of data and conclusions. Operational analytics KI holds a monthly management meeting, where senior and middle management review key performance indicators, and also evaluate the cost of quality with specific measurements. Strategic analytics Our go-to-market strategy includes two meetings each year to evaluate current market characteristics, says Guerrieri. We use reliable external sources for this market information, and supplement those sources with our own internally generated data. Because we are a leader in educational furniture, which includes furniture for colleges, universities, and K through 12 grade schools, we look at trends in numbers of students by location. We are also a leader in the healthcare market, so we look at trends in numbers of beds and other relevant data points. Human resources analytics We are a closely-held company, partially owned as an ESOP, explains Guerrieri. Because the company is owned by the employees, everyone has skin in the game. So we are open with financial data, and publish financial statements for all employee owners on a monthly basis. Customer analytics KI has a Ph.D. on staff who conducts customer satisfaction surveys, both online and by phone. We belong to the Business and Industry Furniture Manufacturers Association, says Guerrieri, and we benchmark against other members of that association.

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CASE STUDY

Lakeside Foods, Inc. Stocking grocery store shelves with analytics

Lakeside Foods, founded in 1887, is a privately held, international private label food processor. It is headquartered in Manitowoc, WI, and has 15 plants and eight distribution centers throughout Wisconsin, Minnesota, and Ohio. Although the company is best known for vegetables, its expertise extends to shelf-stable meals, canned meats, organic products, health beverage supplements, non-dairy frozen dessert toppings, salsa and other sauces. Lakeside processes food for the private labels of large national retailers. There is a lot of competition in the food processing industry, says Denise Kitzerow, CFO and vice president of administration. It is driven by customer demand, and if there is too much capacity in the industry, it can result in margin pressure. Financial analytics Budgets and forecasts are based on private label customer demand, says Kitzerow, so we use metrics to anticipate customer demand and how customers will take products. Logility helps us determine customer demand. We use software to review our forecast and smooth out unusual ups and downs. Operational analytics Lakeside is connected to its major customers by Electronic Data Interchange (EDI), which enables automatic inventory replenishment. The customers system automatically generates a purchase order when their inventory supplies are low. Other operational analytics include natural gas consumption and plant information. We track our usage of natural gas very closely, because all of our plants run on natural gas, says Kitzerow. We are always looking for energy efficiencies. We use a software system to track what happens on our packaging lines, including downtime, and it keeps a history of repairs and maintenance. Strategic analytics We are always developing new products, says Kitzerow. And we look at market trends to develop new products. For example, a current market trend is convenience. To monitor market trends, we follow Nielsen data. Lakesides future strategy is to better reach the East and West coasts, and they are currently using analytics to evaluate the best means of transportation to deliver product.

We use metrics to anticipate customer demand and how customers will take products.
Denise Kitzerow CFO and vice president of administration, Lakeside Foods, Inc.

Business analytics for mid-sized companies

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CASE STUDY

Proper Group International Driving auto parts production with metrics

Proper Group International is a Tier 2 supplier that provides automotive tooling, plastic injection molds, and injection molding to Tier 1 automakers around the world. The company has locations in Warren, MI; Anderson, SC, and Shenzhen, China. It has more than 500 employees, including 50 full-time engineers, and offers a wide range of services that include product development, prototype and production molds, production injection molding, and secondary equipment. We do things the proper way, says Mark Rusch, CFO. It is this philosophy that drives us to world-class standards of process management, innovation, production and quality. Our competitive challenge is that we have to deliver world-class products at the lowest possible prices to meet or exceed customer expectations. Customers expect the highest quality products and the lowest possible price, delivered on time. If we dont deliver products on time, we would interrupt the customers launch program and supply chain initiatives. As a mid-market company, we need to reinvest any profits back into the business to grow the business, so we dont want to tie up a lot of capital in inventory. Financial analytics For budgeting purposes, we use sales metrics developed by the sales team for our automotive tooling business, our primary business, and our auto parts production business, our secondary business, says Rusch. Our automotive tooling business is a make-to-order discrete manufacturing business. We dont produce extra inventory, we produce to fill specific orders according to exacting specifications. We use direct [actual] costs, and the metric is to compare direct cost to the original quoted cost, which was based on detailed design specifications including both labor and material costs. In our auto parts production business, we make parts based on customer releases. For this business, we use standard costs, and analyze variances. We make 400 different auto parts, and use standard costs for both labor and materials, plus any additional subcontractor costs. We do a variance analysis when we compare actual costs to standard costs. We also include overhead costs, for which we have developed a standard rate based on GAAP and Internal Revenue Code requirements. For forecasting purposes, we have to get information about future vehicle programs from the OEMs [Original Equipment Manufacturers] and other industry sources, and anticipate what parts and tooling will be needed. So we use outside information and analytics, both free and for sale. Operational analytics We track a number of metrics with our ERP system, and we also use Microsoft Excel and Access extensively, says Rusch. For production metrics, we track our daily operations with an in-house report we call QuickStats, which includes parts sales; expendables (anything used to ship parts); raw material balances, in dollars, pounds and locations; finished goods balances; labor costs, and cost of quality. Our system receives customer releases via EDI. For example, a customer release might tell us we need 2,000 of this part at our plant in five days. For operational efficiencies, we monitor scrap levels; press downtime; expedited freight, and Return Material Allowances (RMAs). To be a low-cost manufacturer, we need to maintain inventories of finished goods at a minimum number of days on hand, so we have to be good at production planning, so that we dont have too much capital tied up in inventories.

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Leveling the playing field

Strategic analytics We dont really develop new products, because products are dictated by our customers, explains Rusch. However, we can and do develop new processes to incorporate the newest technologies in our automotive tooling business. Human resources analytics We track both direct and indirect labor, and monitor these numbers daily, says Rusch. We also monitor employee absenteeism. This is important for our automotive tooling business (our primary business), because the biggest component of these costs is labor. We essentially see labor as knowledge, skills and abilities that we sell to our customers through our steel products. For direct labor, we track how much time each associate charges to each job. We also track indirect labor, which are hours charged by supervisors. Customer analytics In its automotive tooling business, the company rates every tool it produces with a Mold Performance Evaluation Report that includes dimensional accuracy of the tool, based on the customer-generated design; functionality; part quality, and delivery characteristics.

We see the use of appropriate Business Analytics as a tangible differentiator between our Companys success and that of our competitors. Data is everywhere. Its how you use that data to drive performance that makes a difference.
Mark Rusch CFO, Proper Group International

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CASE STUDY

TradeCard, Inc. A global network for optimizing supply chains

TradeCard provides hosted technology, online services, and trade experts to help connect buyers, suppliers and service providers. This unique offering gives companies the data and tools they need to automate and optimize transactions and control their extended supply chain. The company manages a global network of more than 40,000 members, providing support in 78 countries and 32 languages. Members collaborate electronically to generate mutual value, while a network of alliance partners including inspection services, consultants, technology providers, and banks contribute expertise and bring innovation to TradeCards members. Our biggest competitor is a companys IT department, says Steve Ford, CFO. We run into competition at companies that use installed legacy software. So a sale to a customer could allow them to replace their old technology, such as their mainframe or server. Our business model is similar to that of Facebook. Financial analytics We use NetSuite software, explains Ford. Everything done by our finance function is done through NetSuite, starting with the sales opportunity. With NetSuite, we can capture time, expense and revenue, and all related analytics. All employees can access financial information with an Internet connection. We use Adaptive Planning to do budgets and forecasts. Everyone has their own budget, and they can do their own analysis and produce their own dashboards. In essence, everyone can become their own CEO or CFO. Because NetSuite is a cloud-based software-as-a-service (SaaS), when it is updated, everyone will use the same updated release, and there will be only one version of the truth. Operational analytics TradeCard provides cloud services associated with the purchase order, explains Ford. We developed and use our own software (the TradeCard System) for operations. The TradeCard System exchanges information with NetSuite. We have approximately 100 customers (with 40,000 users) who do business with more than 8,000 factories. The TradeCard System provides operational analytics, including an activity history for every customer. The TradeCard System is the basis of the supply chain, and all customer and agent systems interact with each other. We send instructions to move payments from the buyers to the factories in the Far East. All of the 40,000 members can interact on the TradeCard multi-tenant, single instance, collaboration software program. Strategic analytics TradeCards product development program is based on a feedback loop with their customers. We capture both hard and soft data from all trades, explains Ford. An analysis of this data provides ideas for new products and services. Although we generate a lot of ideas for new products and services, our offerings are focused on what our customers need the most. The company updates its products and services provided by the TradeCard System on a quarterly basis, and all customers, large and small, get the benefits of the upgrades. TradeCard also gets external business analytics from the greater marketplace. We belong to many industry councils, which are essentially circles of influence, from which we gather external market information, says Ford. Our customers also have their own supply chains, and therefore their own circles of influence, so we can also participate in their supply chains. Approximately 10 percent of our revenue is from doing consulting work for our customers. Human resources analytics NetSuite provides an electronic employee time card for TradeCard, and those timecards are used for all employees. We thus standardize the Human Resources program, which is both a benefit and a challenge, says Ford. The primary challenge is standardizing the work flow, not what employees do. In the future, TradeCard plans to use NetSuite for automating the companys performance evaluation process. Customer analytics All customer and trade data is stored in the TradeCard System, says Ford. We keep all purchase information data in the system separately and securely by customer. In collaboration with a few large customers, we are investigating the potential for deriving Business Analytics which could be used to track seasonal activity, usage, and flow.

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CASE STUDY

TradingPartners Helping clients with spend management

TradingPartners is a procurement, technology and services company that helps clients with their spend. The company provides spend management products and services that create dashboard visibility to enterprise data and enable customers to make better decisions, negotiate more effectively and manage their business more profitably. With category expertise in retail, manufacturing, services, healthcare, public sector and food service, TradingPartners helps customers improve enterprise performance while reducing supply chain risk. We provide spend management, says Ginger Gorden, CFO. And our solution, SpendScience, gives dashboard visibility throughout an entire organization. Different organizations in different industries have different issues to deal with, so SpendScience is very flexible. We provide the technology coupled with consultants who can help organizations derive the most value from the technology. The use of data analytics within our organization has provided us an enhanced ability to gain visibility of our consultants and customer activities. Our operations are enhanced by our SpendScience platform as the analysis provided indicates the categories and markets where spend negotiation opportunities arise in the pipeline. We are then able to position our consultants appropriately ensuring the correct skill set and foreign language capabilities are available. Business analytics has resulted in a favorable impact on productivity of our consultants and forecasting opportunities. SpendScience can analyze market trends to develop optimal buying timelines. It can analyze purchasing data across the enterprise, and can consolidate spend data across multiple ERP systems. For example, one client had 65 distribution centers, all buying from different vendors. We helped them consolidate their purchases so that they could get a better rate on a greater volume purchase. Operational analytics We use our own platform to analyze events and projects for clients, not to analyze our own spend, explains Gorden. For example, we have teams in different parts of the world. The tool can help the client analyze projects being done in different regions of the world, and provide visibility across the world. As CFO, I can monitor the projects that we work on. This helps in the budgeting and forecasting processes, in which I have to forecast revenues based on the number and types of projects that we do for clients. I can then share this information at a macro level with our consultants.

Business analytics has resulted in a favorable impact on productivity of our consultants and forecasting opportunities.
Ginger Gorden CFO, TradingPartners

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Contacts Forrest Danson Principal Deloitte Consulting LLP fdanson@deloitte.com John Lucker Principal Deloitte Consulting LLP jlucker@deloitte.com William M. Sinnett Senior Director, Research Financial Executives Research Foundation, Inc. bsinnett@financialexecutives.org

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