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Hardware company melds ERP and BI

Simon Sharwood

Hardware retailer Dahlsens needed to get more information to its store managers, realised business intelligence (BI) was the tool it needed and then went down an unusual path to implement the tool.

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The odd path came about for two reasons, the first of which is the company’s reliance on a niche ERP product called Prostix. Developed by Australian developer Sterland, Prostix is designed for building materials suppliers and timber merchants.

The product is a good fit for Dahlsens – the company is, in the words of Chief Financial Officer Mark Griffin, “Like Bunnings, but we cater to larger builders” – but was also struggling to deliver the kind of reporting it needed in the wake of growth by acquisition. That growth meant it needed to be able to understand the businesses of its newly-acquired stores, while the larger scale of the business made better visibility of increasingly far-flung operations important.

“To be brutally honest we were outgrowing the reporting functionality I was getting in Prostix,” Griffin told SearchCIO Australia New Zealand. BI tools the company had created in Excel were not scaling either, and new ERP was not an option: Griffin had seen ERP projects go off the rails and had no desire to become a case study for ERP failure. The alternative was therefore to bolt on business intelligence to Prostix.

Dahlsens’ preferred business intelligence provider, ComOps, had a pre-existing relationship with Sterland and was therefore able to graft its BI tools to the ERP quite easily.

“We are now measuring daily sales, daily margins and weekly wages,” Griffin says. Integration with CRM means “Account managers might meet a customer and can go in and see what that customer has bought from us, by product, or product group. We know how many houses he is building, what the cost of material is, therefore we know he must be spending a certain amount on plaster in the future. That ripples out into our supply chain,” and allows the company to order products safe in the knowledge its customers will soon be ready to buy.

That in turn helps the company to forecast stock levels more accurately, which makes it possible to make better allocations of working capital.

Overall, Griffin feels adopting BI sets his company up for the future.

“We’re doing as much as anyone in the hardware industry other than Woolworths,” he said. “What Woolworths will bring is going to move the industry quite significantly forward and those smaller businesses without a strong supply chain will struggle.”

But Griffin feels Dahlsens is now well-positioned.

“We can focus on margins,” he said. “We can see data and ask ourselves why we are selling at a particular price, analyse stock values by branch or by product.”

Griffin and his team can also segment the BI solution’s output so that users in different locations see different data.

“I am a big believer that the branches need to know information, but only what is totally relevant for their day-to-day operations. I don’t want them to sit in front of it all day.”

Dahlsens therefore uses BI to set benchmarks for its store managers, or to monitor performance so it can advise of potential problems and help to plan and initiate interventions. “Whether it be sales mix, margins, cost of running the business is too high, we can see it and help the branches,” Griffin said.