Subaru gets smart with PerformancePoint Server 2007

Like many businesses, in order to stay competitive, Subaru Canada needs to select and gather data, turn it into actionable information, and pass it on to a range of stakeholders. For Subaru, these stakeholders include the 125 employees at head office in Mississauga, ON, the 89 full-scale and four service-only dealers across Canada,and the parent company in Japan.

George Hamin, director of e-business and information systems at Subaru Canada, knew that his legacy IT environment couldn’t deliver on the desired level of analysis and reporting. The company’s “home-grown” ERP system was purchased in 1999 to address Y2K concerns; running on an AS400, it has served the company well, but the BI portion of it was not sufficiently evaluated against competing BI products; it was accepted as part of the bundled package.

Subaru’s top priority, says Hamin, was continuing to ship parts and vehicles, process warranty claims and invoice dealers following Y2K. “Once we got around to wanting to analyze our data, we realized that we could not answer the questions we had with the solution in hand.”

Subaru did find a way to extract the data to Excel with pivot tables, but it was an arduous and time-consuming process. Integration with customer segmentation or third party data meant that the company had to start over from scratch. As well, Subaru wanted to be able to pull data specific to areas such as service, pricing, warranty analysis, vehicle sales and part sales — areas that can touch different parts of the company. Subaru wanted to determine trends, too, and to send that information back to Japan, thus aiding in longer-term strategic planning.

Though Hamin and his team became convinced they needed a specific BI solution, they took their time assessing the offerings of leading vendors. After a year kicking the tires, they chose PerformancePoint Server 2007, a central piece of Microsoft’s BI offering.

“We needed to do more than look at historical data of who sold what,” says Hamin. “It’s important to know contributing factors, such as financing, trim-level, colour and incentives. Microsoft BI allows us to assess and inform, to make better decisions for our product mix next year.”

As a result, BI capabilities are now seen as key components of Subaru’s business strategy, with the PerformancePoint system addressing key analytics. Vehicles come to Canada from Japan and the Subaru factory in Indiana; parts can come from many different locations: from Japan, from Indiana, from third parties.

“We have to move a lot of cars,” Hamin explains. “It’s very expensive. You need the right models, the right colour packages for different parts of the country. It has always been difficult to analyze that data. We are going live first with sales and marketing; then parts, warranty, finance,and last will be warehousing.”

In order to get the job done, Subaru went with Microsoft Gold Partner T4G, a professional services firm with 225 employees and strong BI capabilities.

Steve Walintschek, director of analytics at T4G, explains the process: “We sub-contracted to another company, Data Mirror, to get the data out of the ERP system. The back-end data sources are DB2.” T4G gave Data Mirror the format, and Data Mirror then captured the changes and pulled them into the data mart for analysis. Part of the advantage for Subaru is that T4G, which is on the Microsoft BI advisory council, runs PerformancePoint internally and has significant integration expertise. This can make a big difference in terms of project management and knowledge transfer.

“When we went with T4G we told them that they have to do everything from AS400, to SQL server, to SharePoint,” says Subaru’s Hamin. “We didn’t want to be in a finger-pointing situation with any third parties.”

Having this kind of ownership simplifies things greatly. At present there are four T4G employees on site working on different stages of the project. On Subaru’s side, for Windows-related technology there are four developers, and another four devoted to the AS400.

“Part of the T4G handover process involves some training,” says Hamin. “But with them in the building, if our developers have a problem, they can just walk over.”

As well, Hamin points out that it’s easier to find people who can work in a Microsoft environment. “You put an advertisement in the newspaper for a Microsoft programmer,” he says, “and you get 300 people looking for those jobs.”

According to Dan Vesset, program vice-president, business analytics at research firm IDC, the prevalence of the Microsoft Office Suite of desktop applications is also a factor, as is SharePoint Server, which allows for content and workflow management to integrate with the Office Suite. “The guy on the shop floor may not use Excel, but operational managers do, and these are the people on the front line. How do you expand the use of fact-based decision-making from a few analysts or executives to the employee base? One way is through Excel, other Office-based applications, or a browser. Employees then don’t have to learn a new tool.”

Visualize a pyramid: in the past, BI was only accessible to the mid and upper echelons of an organization. With PerformancePoint, however, the base of the pyramid can benefit from quick and meaningful reporting tools, including dashboards.

“We approach the BI market in a fundamentally different way than a lot of our competitors,” says Ryan Dochuk, Marketing Manager for BI at Microsoft Canada. “We see BI as something that everyone in the organization can use to make better, faster and more relevant decisions.”

Microsoft’s plan to deliver BI to a broad employee base, however, raises an obvious red flag. This is, after all, business intelligence, and organizations are rightly concerned about security and privacy. These issues are not only of importance in order to protect the bottom line, there can also be serious legal ramifications if sensitive data goes astray.

IDC’s Vesset thinks Microsoft has it covered. “It can be a challenge to enforce enterprise-wide security with any stand-alone application, including Excel,” he says. “Excel is not just a simple tool — it can be powerful and flexible. But with PerformancePoint, it is tied to the server, and security can be deployed centrally from an IT manager.”

George Goodall, senior research analyst with Info-Tech Research Group, believes that by leveraging off of Excel, PerformancePoint has relevance as a broad, “horizontal” mid-market solution. And just as important, it is designed to offer the requisite security. “For BI, the Excel spreadsheet has a role, and with PerformancePoint, users can get access without altering the underlying data,” says Goodall. “In an era of compliance and litigation, offering these broad capabilities becomes more important.”

Features include setting audit trails for various transaction targets, SOX compliance and establishing internal rights.

In fact, Hamin from Subaru believes that his skills are best put to use if the IT department focuses on getting the right information to the right people. This is something that’s fairly straightforward with PerformancePoint, allowing Subaru to use a roles-based ID system based on user groups.

“We want to get the IT department out of the middle,” says Hamin. “We don’t want to complicate things; we want to be a security layer, not an obfuscation layer.” With authentication on SQL server, this means data can be liberated to the right users, who can then analyse it on their own.

“People can slice and dice the data, ask different questions,” says Hamin. “And, of great value to me, they can do it without the assistance of the IT department.”

Ease of use, then, is a major factor. It encourages broad adoption and drives value across the organization. From a platform perspective, underlying BI functionality is being commodified, with niche industry tools being brought in from the partner community. This is transforming business. Many enterprises have silos and poor datasharing practices, making IT’s job more difficult. It’s here that a platform-based BI solution can unleash the potential of a broader workforce.

“There is a hand-off process to users,” says Hamin. “I find it extremely easy. I took the two-hour demo and I was up and running. This might have been easier for me as an IT person — I’ve been doing this all my life — but at the end of the day PerformancePoint is easy and doable.”

This is a significant plus for Subaru, because supporting users in a BI environment can get very expensive. CEOs often talk about goals such as universal access to information; however, with some solutions, meeting that goal can get expensive from a licensing perspective.

It is also relevant that the news from Hamin at Subaru, as well as from the analyst community, is that Microsoft’s go-to-market strategy simplifies the decision-making process. This is a significant differentiator. Subaru looked at all the major vendors and found that, though price was not a major factor, pricing structure was.

“One of the appeals of Microsoft is that you pay the published book price,” says Hamin. “There is no ‘10 per cent discount if you sign today’. What this means is that when I meet my equivalent at a competitor, I’m confident that we’ve got the same deal.”

And there are likely more deals to come. According to IDC, the BI market is growing at about 10 per cent in North America. The latest sizing for 2006 has the worldwide market at US$9.5 billion and the Canadian opportunity at CAN$240 million. Obviously, Subaru Canada isn’t the only outfit that sees the common sense in BI.

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