BI Helps Allergan Monitor Sales Data
A case study on Busienss Intelligence & Analytics in Network ManagementReader ROI
Executive Summary
Without accurate sales data, it was getting hard for Allergan. They wanted analysis, more dimensions from sales data, like sales according to time, zone, by area sales officer and by manager. That's when they decided to introduce a business warehouse so that the data could be studied from various viewpoints, and generate as many reports as they wanted.
The 12-year-old Allergan India is a pharmaceutical that specializes in ophthalmic products. A joint venture between Allergan and Nicholas Piramal, the Rs 100-crore company offers medication for conjunctivitis, dry eyes and glaucoma and has about 17 percent of the Rs 430-crore Indian ophthalmic pharmaceutical market. Like other pharmaceutical business, Allergan knows the importance of an extensive downstream strategy. It prides itself on having the largest reach in the Indian ophthalmic industry with its network of 10,000 ophthalmologists. The company's primary point of sale are 18 clearing and forwarding agents (CFAs). From there products go to the distributor, and the chain goes down a couple of tiers, to the wholesaler, retailer and chemist outlets. Between 900 and 1,200 distributors and about 1.2 lakh small distributors and stockists constitute secondary sales.
Case Study Highlights
- While the rest of the pharmaceutical industry grew between 5 and 6 percent in the last fiscal, Allergan India registered 20 percent growth
- Post-RUBIC, DSO levels dropped by 10 percent and Allergan maintains an inventory of less than 20 days
- During 2008, he adds, productivity among Allergan’s sales people increased by 16 percent
- Allergan’s products have witnessed a 28 percent growth in promoted brandsand secondary sales grew by 23 percent
This vast network creates plenty of scope for data inaccuracies. As the company grew, it became increasingly crucial to monitor parameters like DSO (Day Sales Outstanding), which is used to gauge the performance of every division and DOH (the Day's On Hand), which is a measure of inventory. It was then that they realized there was a fair amount of inefficiency in the system. That's when we decided to introduce BI tracing the need for RUBIC (Re-usable Business Intelligent Components). The association with Rubik's cube is no accident. The cube represented the two things Allergan wanted from its IT team: a single version or block of truth and multiple sides to look at it.
Which is why like most companies, Allergan, chose to implement BI: to give the business more actionable information. But, Allergan also needed BI to create a platform that its executives could collectively work off. The year 2006 saw a decision to implement a BI solution that could throw up solutions to this problem. In 14 months, with Mindtree (who had helped build Empower) as their technology partner,
Rajan set up RUBIC. The tool had an SQL 2005 server at the backend and an extraction transformation loading (ETL) tool in the middle. The ETL extracts and cleans data then coverts it into a standard format. It then puts the data into a local ERP that feeds the data warehouse. The warehouse is fed from various transactional level systems. A number of analytics, static and dynamic query capabilities were built on this. Reports are available through a presentation layer (on Windows Share Point), and allowed a comprehensive representation of various key business performance indicators.
His solution paid off in a big way. While the rest of the pharmaceutical industry grew between 5 and 6 percent in the last fiscal, Allergan India registered 20 percent growth. Rajan modestly acknowledged that some of that lead is thanks to RUBIC. It also improved the company's day sales outstanding (DSO) and its inventory levels. Post-RUBIC, DSO levels dropped by 10 percent and Allergan achieved what few of its pharma peers have managed: it maintains an inventory of less than 20 days. The industry average, says Rajan, is about 45 days.
Figures aside, the biggest advantage RUBIC offers Allergan is the power of informed decision-making. "Earlier, a little bit of guesstimate and a little bit of gut feeling would have seen a decision through. Today, all decisions are data driven," Rajan says.
The Person Behind It
Earlier, guesswork and gut feeling would have seen a decision through. Today, all decisions are data driven.
It is refreshing to see that we were able to get data fast enough for us to take decisions. That’s a big change.
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