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Case Study

 

Eby-Brown Speeds SAP NetWeaver BW and Financial Reporting

by Ken Murphy, Editorial Director | insiderPROFILES

April 1, 2013

With a non-integrated mainframe system housing disparate financial data across its seven distribution centers, Eby-Brown Co. knew that integrating this data across the enterprise was a key first step to gaining better insight into financial dealings. However, the lack of an end-to-end solution made reporting and analytics a challenge. To solve this issue, the company implemented SAP NetWeaver Business Warehouse 7.3 powered by SAP HANA.
 

Eby-Brown Co. is the third-largest convenience store distributor in the US, servicing nearly 14,000 stores. Numerous chargebacks to suppliers and rebates to customers make up a large part of the company’s financial dealings. In addition, roughly 800,000 sales order line items each day make general ledger (GL) accounting and profitability analysis core business processes.

With a non-integrated mainframe system housing disparate financial data across its seven distribution centers, the company knew that integrating this data across the enterprise was a key first step to gaining better insight into financial dealings. Having each warehouse manage its own processes worked well for ensuring next-day delivery to convenience stores across 20 states, but the lack of an end-to-end solution made enterprise reporting and analytics a challenge for Eby-Brown.

“Our systems had very little integration or analytic capability,” says Kevin Reilly, Eby-Brown’s Chief Information Officer, in reference to the company’s siloed approach to several financial processes, such as processing rebates, handling promotions, or buying and forecasting inventory. “The mainframe was surrounded by other systems that did their best to keep up on some related processes, but they were certainly elementary tools we were using.”

Eby-Brown took the first steps toward centralizing company processes with an implementation of SAP ERP 6.0, first rolling out HR functionality in the fall of 2009. In March of 2010, the business began to integrate SAP ERP Financials across the enterprise, going live with the first of its seven distribution centers. The final warehouse went online at the end of 2011.

Nick Lagen, Eby-Brown’s Chief Process Officer, joined in the summer of 2011 shortly before the company completed its SAP ERP 6.0 implementation. As the primary liaison between IT and the business, Lagen’s role is to help the business articulate requirements, work with IT staffers in developing solutions, spearhead the field testing and adoption phase, and guide change management processes. One of the first things Lagen realized after joining the company was that the integration of financials across the enterprise created new reporting challenges. Users could run reports and pull data out of the ERP system, but these tasks were difficult to perform.

“The ability for financials users to analyze what was going on in the business was severely curtailed,” Lagen says. “Pulling up a GL query at the line-item level would cause a system to crash. It was that fundamental of an issue.”

A New Approach to Financial Reporting

To address this problem, Lagen led an initiative asking each business area to define its reporting requirements. With input from across the enterprise, Eby-Brown then partnered with an SAP-focused business intelligence consultant to create an analytic assessment. Eby-Brown also worked with SAP to lead a value-engineering project. After reviewing a total cost of ownership (TCO) analysis for a variety of options on a three-year roadmap, Eby-Brown decided to implement SAP NetWeaver Business Warehouse (SAP NetWeaver BW) 7.3 powered by SAP HANA.

“We attacked this assessment methodically from a return on investment perspective — looking at benefits as well as TCO for each option — and we took a three-year view so we wouldn’t end up making a decision in the short term that could hurt us in the long term,” says Lagen, shedding light on why the team chose SAP NetWeaver BW rather than standalone SAP HANA Enterprise. “Our team had never seen an (enterprise-wide) analytics tool before. We wanted to take a ‘crawl, walk, run’ approach. And it was attractive to us to be able to show the organization that we were looking to implement a standard system quickly, while also reducing our risk.”

The “crawl” pilot phase, according to Lagen, entailed loading finance, GL, and profitability analysis data into SAP NetWeaver BW, and letting end users familiarize themselves with the system by running financial reports using reporting tools from the SAP BusinessObjects suite, including SAP BusinessObjects Analysis, SAP BusinessObjects Dashboards, and SAP BusinessObjects Web Intelligence.

Initial reporting statistics were encouraging. Reports that had previously taken five days to run were extracted from SAP NetWeaver BW into SAP HANA in roughly half a second, and presented to end users in about two minutes. The dramatic reduction in time spent on queries was a welcome change, more so because the previous five-day standard was often a best-case scenario. According to Reilly, it wasn’t uncommon for a query request to run for several days before timing out, necessitating a restart with no guarantee of success, let alone within a set time.

“We would have been satisfied with faster reporting, never mind the lightning fast speed that we got from SAP NetWeaver BW on SAP HANA,” Reilly says. “The ability to run these reports at all was a big deal to us.”

After two weeks, Eby-Brown ran an analysis of its per-query execution and discovered that the time spent at the database level was just 0.58 seconds, despite generating 1,906 data transfers after reading an average of 10.8 million records.

“Before SAP NetWeaver BW on SAP HANA, many decisions were based on intuition and gut,” Lagen says. “Many times, we’d have to make a decision before we had the time we needed to pull and analyze the data, so we didn’t have the data to help inform our decision. We’re now in the position from a finance perspective to always get the information we need.”

Throwing Users into the Deep End

If the beginnings with financials users is any indication, Eby-Brown sees SAP NetWeaver BW powered by SAP HANA well on its way to leading to organizational change, but Lagen and Reilly point out that the company always will adhere to its crawl, walk, run philosophy — even though it can now envision a not-so-distant time when even a sprint is possible.

“We recognize that for a group that typically has been more of a scorekeeper organization, for them to migrate over and become disciplined operators or value-integrators is indeed a challenge, but one that our organization is up to,” Lagen says. “We are striving to empower these users to do much more valuable things for Eby-Brown, and I think we’re seeing some of the benefits of that already.”

For the finance department, adapting to process change was more than simply adjusting to faster queries and greater data visibility; it was recalibrating users’ understanding of what was even possible, particularly for those familiar with mainframe batch processing where data had to be in summary. It had been common to look at a daily finance report with 10 pieces of data in summary from all seven distribution centers, but SAP ERP reports could now easily include half a million lines of data, yet allow users to analyze GL entries and break down each line item of each sales order.

“It’s like being thrown in the deep end of the pool,” Reilly says. “At first, we weren’t sure users were getting it. But now, it’s wonderful at meetings to see users provide intricate data that’s coming directly from SAP NetWeaver BW. So even if we had initial worries about the adoption, now, we can’t pull that tool out of their hands.”

Reaching the Finish Line

Other phases of Eby-Brown’s data migration roadmap plan for the addition of sales, procurement, and merchandising data to SAP NetWeaver BW, followed by warehouse data. Having experienced the power behind SAP HANA, Reilly and Lagen foresee tackling predictive analytics concerning all facets of the business. “We’ve gained enough confidence in SAP HANA that it has allowed us to broaden our strategic vision from a technology standpoint,” Lagen says. “The technology is performing so well that we’re starting to think about ways we can use it from a transaction perspective.”

Again, the plan is to align the future roadmap with the company’s initial crawl, walk, run philosophy. “Even for us, that still fits the crawl, walk, run outlook because, in working with SAP NetWeaver BW on SAP HANA, we’re still using SAP HANA 95% of the time   purely as a database,” says Reilly. “The idea is that to run SAP ERP on SAP HANA — to get pricing to work faster, for example — there’s the wonderful option to use SAP HANA as a calculation engine and not just as a database. I think that’s our next foray into the great beyond. We’re comfortable with it as a database, but it can do so much more.”

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