British American Tobacco Better Manages Market Share

Formed in 1902, British American Tobacco (BAT) is the second largest listed tobacco company in the world measured by market share. With brands that include Kent, Dunhill, Lucky Strike and Pall Mall, among others, BAT derived its name from the headquarter locations of its two founding companies. It then grew from its roots in the UK and United States to more than 180 international markets, including Africa, Asia, Latin America and continental Europe.

In 2005, BAT's Belgian division and sister company STC merged in order to increase revenue and shareholder value. The merger resulted in a quick review of consolidated reports to make strategic and operational decisions, causing the management team to realize that business agility, and the ability to act upon international and market change would be crucial to maintain status.

In effect, a team of business and technical managers instigated a major project to improve business information across the supply chain, drive increased sales and ultimately increase market share.

BAT's Data Landscape
According to Koen Dehaen, IT project manager for BAT Belgium, "Our sales and marketing teams needed to analyze a wide range of data from a range of different sources - SAP systems, sales databases, competitor information and spreadsheets. We had a huge amount of information available in theory, but it wasn't at
our fingertips."

Previously, all the data powering market reports were fed into two custom-built data warehouses: Sales Information Management (SIM) covered information from manufacturing to the wholesalers, while Wholesaler Information Management (WIM) featured sales data from wholesalers to retail outlets such as gas stations and convenience stores.

However, as market conditions changed and BAT Belgium adapted to keep ahead, it became difficult to keep outdated data warehouses synchronized with the business. Any changes made on the business end could take weeks, or even months, to incorporate into the warehouses, resulting in out-of-date, incomplete or inaccurate reports.

The merger with STC presented another challenge to an already complex data structure. Although STC sold different products, it had many of the same customers and concepts. As a result, BAT Belgium had to merge the two companies' outdated data warehousing platforms on a very short timescale, while managers and executives were still in the midst of implementing a new working environment, structure and plan after the merger.

A New Data Warehouse
Based on internal analysis, it was determined that a new information management strategy would have to include the following:
>    Dedicated team involved in business intelligence/information management
>    Centrally managed and integrated corporate data warehouse
>    Quick responses to an ever-changing business model
>    Easy access to one center of valid information reflecting the current business model

Kalido's Information Engine offered the opportunity to reduce the need for technical resources and could reflect business change rapidly. By eliminating the need for external experts, BAT Belgium could possibly cut its costs by 50 percent.

Another key selling point was Kalido's ability to track and maintain history in the data warehouse - complete with the ability to reconstruct views of the business as it existed at any point in time. Kalido was asked to create a Proof of Value (POV), and conduct a mini-project to reduce risk, while proving its worth.

"We were skeptical of Kalido's claims," says Dehaen.  "...but by the end of the POV, we were convinced."

Following the successful POV, the executives set a tight deadline for completion of the project. Kalido's business model-driven approach, and the fact the POV was integrated with other Kalido implementation planning and education activities, ensured a smooth transition from POV to project implementation during challenging timescales.

On time and on budget, a fully operational data warehouse, that included both SIM and WIM capabilities, plus further SAP feeds, were all combined into the Kalido warehouse - without requiring re-engineering.

Clear for All to See
The business benefits of the new solution were immediately apparent, driven by the additional insight the solution gave BAT Belgium into its supply chain and sales operations. The flexibility to change the data across BAT Belgium's diverse source systems means that business executives get consistent, accurate and up-to-date information, allowing them to track sales performance and monitor market share on a daily basis.

Kalido's Information Engine helps business users to set up and amend business model changes in the warehouse, reducing both cost and time. The new implementation has also had a major impact on planning operational and marketing strategy in both the long and short term.

Ten years' worth of sales, marketing and channel spend has been loaded into the data warehouse, and, by using a history tracking capability, BAT Belgium can now recreate historical views of business performance and view data in relation to any business change (actual or potential).

According to Dehaen, "We can make changes or incorporate new information on the fly. We can catch and correct errors much faster and easier. Maintenance is both easier and less time-consuming. Finally, our information management infrastructure can keep pace with the rapid change the market demands." 

Head of IT at BAT Belgium, Marten Karlsson, says, "For us, Kalido isn't a one-off tactical implementation; rather we see it as a strategic solution we can extend, adapt and roll out across different divisions for years to come. Should we ever merge in the future, I now have no concerns we'd be able to deliver consolidated reports in time."

Project Expansion
Following the success of the business intelligence project, the executive management team at BAT Belgium extended its scope to incorporate the management of sales contracts with retailers. By monitoring contracts tied to market share, the company could determine strategies that would help it achieve its primary goal - increasing sales through competitive market share attrition.

Unfortunately, problems arose while collecting data from the initial contract in attaining clear visibility of contract performance and tracking the final contract payment.

As a result, implementation of a contract management system project began. A Kalido data warehouse was created to take contract data from the  WIM data warehouse and additional retailer data from another system, without the need to re-engineer any of the source systems.

"We now have a completely robust, scalable and very low maintenance solution that we can amend for any future business model," says Annelies Geysen, channel development manager at BAT Belgium. "We have the capacity to handle far greater volumes and complexity data."

Today, BAT Belgium can produce automated monthly reports and payments, while monitoring and projecting the likely payoff to the retailer based on current trends.

In effect, the area sales manager no longer has to manually monitor contracts and can focus instead on the task of improving sales throughout the region.