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Sichuan Tobacco

Sichuan Tobacco

"Leaders at different levels and business managers need to have the intuitive information of company's performances and industry's economic operations in real-time to support their decision-making, not just the basic business operational data. The business intelligence of Business Objects is a good fit for this issue."

Data Center project
Sichuan Tobacco Administration

Challenge

Known as the "Land of Abundance" in history, Sichuan is not only an important production base of tobacco, but also a major tobacco-consuming province. One of the most prominent taxpayers in Sichuan for many consecutive years, the Sichuan Tobacco Administration Bureau (Sichuan Tobacco) faces the challenge of transforming from a large tobacco province to the nation's leading province in marketing and selling tobacco products. Undoubtedly, sophisticated information technology (IT) will be a critical tool to enhance Sichuan's strength and competitive advantage.

Through many years of IT development, driven by the general strategy of building a "Digital Sichuan Tobacco," the company's software and hardware as well as the networking facilities have taken a good shape, laying down a solid foundation for further progress of IT initiatives. However, with the continuous operation of business systems and the amount of data increasing tremendously, the inability of decision-making analysis supported by the original business systems began to emerge. Yao Yuhong, director of the information center of Sichuan Tobacco, says, "We established multiple application systems, including marketing, authorized selling, tobacco leaf, office automation, customer relationship management, finance, and human resources. These systems play a critical role in improving our industry's management, enhancing routine operations and administration, and driving the industry to transition from traditional business towards a modern logistics mechanism. However, the large amounts of data generated by these systems are not fully utilized to become the useful tools in supporting management's decision-making analysis."

Obtaining insightful reports in a timely manner was also a challenge. Yuhong explains, "For example, what is the sale of 'Tianxiaxiu' and 'Jiaozi' brands in 22 cities last month? How about their margins? What is the current status of this quarter's sale target achievement? The management and marketing teams often need to acquire such reports urgently. Unfortunately, the individual systems developed by different vendors have generated a huge amount of data from application systems, which run across different software and hardware platforms and are presented in disparate formats. Hence, it is very difficult to get the right reports in time."

Such a tremendous volume of unrefined data cannot be used for decision-making analysis. Without being categorized, consolidated, summarized and polished, the data is still limited to business operations and is far from becoming the analytical information decision-makers require. Static and inflexible reporting hinders insightful and intuitive analysis. Yao explains, "The tobacco industry in China has long been controlled directly by central leadership and sold authorized and exclusively. To this end, it is important for the management at provincial and city levels and in planning departments to obtain real-time data on operations for decision-making. They need various types of information, such as sales date, sales ratios of different brands, the stock of various cigarettes of varied prices and levels, and especially the data on the achievement of sales plans. Such information helps map next-step policies. Obviously, if a report is not intuitive and lacks summarized analysis, it cannot serve as the proof for decision-making."

Sichuan Tobacco realized it needed to establish a data center for the tobacco industry. Moreover, the National Tobacco Administration put forward the goal to build data centers in each province; the campaign to construct the data center for the tobacco business starts with the purpose of exploring the value from the data.

Approach

In accordance with the National Administration's requirement on IT development, the sector decided to construct data centers at national and provincial levels, including basic systems like information protocols, data exchange services, data processing and storage, data analysis, and information security. The national administration, provincial-level corporations, and industrial and commercial companies will access the industry data centers. Its overall structure is as shown in Figure 1.

In constructing data center initiatives, Sichuan Tobacco advanced ahead of its peers, who lack experience and are still at the beginning stage of building a tobacco industry database. As an early adopter of business intelligence (BI), Sichuan Tobacco decided to work with the supplier who possesses top-notch products and diversified implementation expertise in BI.

When Sichuan Tobacco looked for a partner with strong BI expertise, Business Objects, an SAP company, came to the attention of the National Administration, because of its advanced products, professional services, and leadership in the world's BI market. Jia Honglong, the chief in charge of the data center project at Sichuan Tobacco, observes that Business Objects is the world's advocator and leader in BI solutions, and it not only provides complete and powerful BI products, but also integrates BI solutions.

Business Objects demonstrated great attention to and strong support of the Sichuan Tobacco project. With an in-depth survey and analysis of the National Administration's application systems and data situation, Business Objects came up with an overall BI solution consisting of BusinessObjects™ XI, Crystal Reports®, BusinessObjects Web Intelligence®, Xcelsius®, BusinessObjects Dashboard Builder, BusinessObjects Performance Manager, and BusinessObjects Data Integrator.

Business Objects decided to build the BI tools (the core of the database program) over the database of the data center, which incorporates all the business data of Sichuan Tobacco. The BI applications established include reporting, online analytical processing (OLAP), analysis, dashboard, and specific analysis. The overall system structure is shown in the diagram on the right, including:

All the above products will be of great help in creating a complete database and decision-making analytical system for Sichuan Tobacco, and will significantly increase the efficiency and accuracy of customer analysis for decision-making.

The key target of the BI implementation is to let Sichuan Tobacco's BI system serve marketing needs. Considering that the end users of the data centers will be the leaders at provincial and city levels as well as major business departments that wish to create their analysis reports easily and timely checking the business operations, especially the performances of each key performance indicator (KPI), Business Objects provided a leadership dashboard to help create fixed reporting, analysis reporting, dashboard and specific analysis over the BusinessObjects Enterprise platform, aiming to let management obtain all the required info through Web Intelligence. In addition, management can also access the right reports and data whenever and wherever through the Internet Explorer browser.

To ensure smooth progress, Business Objects Global Services provided BI deployment expertise. The administration also received strong support from the technical center of Business Objects in the course of upgrading; developing, and implementing its BI project. Business Objects technical support responds immediately to help diagnose, position, and solve any problems that may occur, offering a reliable guarantee for the success of data center project in Sichuan Tobacco.

Results

The system integration project of Sichuan Tobacco's data center is divided into two phases. The first phase is to make an overall plan, establish a management system of data standards, integrate all the existing application systems, construct a two-tier data exchange center at provincial and city levels, and build a provincial-level data warehouse, to realize the centralized deployment at provincial administrations and utilization of each specific decision-making BI systems by companies at prefecture and township levels. The second phase will expand the breadth and depth of the project, to improve the management of the decision-making process. The first phase of the project has been completed.

The total BI solution effectively integrates the data of each business systems in 22 cities of the Sichuan province, and eliminates the information silos represented by scattered data and the inability to share information. The new system provide modular and intelligent analysis and management, more intuitive, visualized reports, and an analytical platform, enabling management and staff of different levels to access the analytic results required to support decision-making. Data is no longer inconsistent.

Jia Honglong adds that the biggest highlight in the project was the adoption of the intelligent platform BusinessObjects Enterprise, making it easier for information retrieval and analysis.

Xcelsius provides highly interactive and intuitive dashboards for top management incorporates all the data they need. Besides, Sichuan Tobacco also looks at KPIs in sale analysis, such as the accomplishment ratio of sales against target, branding convergence, the percentage of the top 100 brands in total sales, and so on. This capability was highly remarked by the management leaders.

For example, due to the large number of migrating workers returning home during the Spring Festival holidays, the sale of branded cigarettes in Chengdu and Deyang cities soared rapidly while there was not much fluctuation in other cities. Such changes now can be instantly reflected in Business Objects reports; for example, by looking at the "Specific Analysis of Cigarette Sales" report and the "Dashboard for Management Decision-Making." Thus, the leaders at provincial and city levels can allocate resources immediately to guarantee the supply, realizing a balance between sale and inventory, and making it easier for consumers to buy and facilitate the enhancement of the company's profitability. These are all the effects of business intelligence.

Users of the system indicate that the BI solutions satisfy their business needs by remarkably boosting productivity and enabling them to access statistics data whenever they want. Moreover, as Sichuan Tobacco has pioneered the establishment of data centers in the national tobacco industry, the successful implementation of data warehousing and BI sets up a very good example for the whole segment.

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