IBM Software Consumer Products Business Analytics

TEAC Corporation Using IBM Cognos TM1 to enable speedy planning and decision-making

Since its establishment in 1953, TEAC has aimed to enrich the lives of consumers by providing high-quality products. Overview The need Masayuki Yamanaka, Section Manager at TEAC Corporate Planning TEAC Corporation wanted to build a Office, says: “We have been working on global group expansion in recent business intelligence platform to help drive years by creating capital and business alliances with partners such as improvements to its planning, sales and marketing processes. Corporation, Brands (our parent company) and its family companies. The solution TEAC replaced its previous analytics tools with IBM® Cognos® TM1®, IBM “We are pursuing strategic alliances designed to enhance our group Cognos Business Intelligence and IBM strengths, seeking to selectively focus our business areas, expand sales and SPSS® Modeler software, enabling rapid improve operational efficiency.” reporting. The benefit IT systems are an indispensable component of TEAC’s strategy. In Monthly reports that previously took up to 2001, TEAC built an ERP environment and deployed Oracle Hyperion 12 hours now run in three minutes, enabling software to report on its operational data. Initially, TEAC used the Oracle analysts to dig deeper into business data and uncover efficiency-driving insights. software to publish BI reports on sales bulletins, expense checking and product inventory figures. The company also used Essbase to create PSI cubes for its production, sales and inventory planning, and consolidated accounting cubes called MFRs (monthly financial reports).

The previous business intelligence (BI) tools posed some key challenges for TEAC. Masayuki Yamanaka explains: “Our version of Hyperion became outdated, making it difficult to develop new BI reports. We also received a lot of different requests from users who wanted the ability to create reports using different categories, and to save the reports. Since Hyperion’s basic function was a portal to view our pre-built reports, we were unable to meet these needs.

“We also had performance problems with Essbase. The system used for PSI operations required the user to access Essbase from Excel, and then enter the sales projections. Response times were poor, and the tool required a time-consuming process for data entry.

“Since we were using different versions of Hyperion and Essbase, we had to transfer data between the two systems manually. In fact, it took our information systems departments between five and 12 hours to enter performance data into Essbase each month.” IBM Software Consumer Products Business Analytics

64-bit in-memory architecture enables high-speed processing with a user-friendly form-based interface. “Having an environment in which management staff can use Cognos Business IBM Cognos Business Intelligence software provides functions Intelligence to rapidly create their own ad hoc such as reports, dashboards and ad hoc analysis, and makes it easy to create reports and dashboards without a knowledge of reports will be a key feature.” programming.

— Koichi Fukuda, Section Head—Corporate Planning Office, TEAC Yasushi Inaba, Management Information Section Head at TEAC Corporate Planning Office, says the company was impressed by both the functionality of the Cognos product line Solution Components and the support provided by IBM during the proposal period. Software “As well as conducting a PSI test, IBM brought in PCs to train • IBM® Cognos® Business Intelligence our staff on,” says Yasushi Inaba. “It gave us a good idea of what • IBM Cognos TM1® • IBM SPSS® Modeler we’d need to do after introducing the system, and later made the installation work go smoothly.”

Koichi Fukuda, Management Planning Section Head at TEAC tried to improve Essbase’s performance, but ultimately TEAC Corporate Planning Office, adds: “TEAC’s business decided it had reached the limit of how successful that approach environment is changing quickly, and the needs of management could be, and started looking for a fresh solution. are diversifying. As a result, information system departments can’t keep up with the business’s increasingly diverse needs by Solving the challenges with IBM Cognos creating reports individually. I think having an environment in TEAC evaluated several products to refresh its BI environment. which management staff can use Cognos Business Intelligence The company wanted solutions that were built on a modern to rapidly create their own ad hoc reports will be a key feature.” architecture, and performance was a top priority. With assistance from IBM, construction of the new BI The company narrowed the candidates down to IBM Cognos environment has been underway since mid-October 2013. software and products from two other vendors. IBM proposed Creation of PSI cubes and MFRs, and the use of BI reports to a new system driven by IBM Cognos TM1 and IBM Cognos create sales reports, were scheduled for completion by March Business Intelligence. The system would support more advanced 2014. and precise predictive management by using Cognos Business Intelligence for reports, and Cognos TM1 for PSI cubes and “We first started working on creating the MFRs. We wanted MFRs. to keep the same features that we had previously, and make no major revisions,” says Masayuki Yamanaka. “We tested the proposed IBM solution by having IBM create PSI cubes using Cognos TM1,” says Masayuki Yamanaka. “The “Next, we started creating the PSI cubes. We were unfamiliar test let us verify the system’s outstanding performance, and with some of the work, such as how to write the rule formulas. proved that we could use Cognos TM1 to achieve significant But we received support from IBM, and were able to complete performance improvements. the task. We created new sales reports, which meant there was a lot of trial-and-error, but we managed to finish on schedule.” “We expected these improvements to help when creating both PSI cubes and BI reports, reducing the time needed to Using the standard Cognos interface as the user interface create reports and submit them to management, and enabling during creation of the new environment enabled the company speedy decision-making as a result. Co-ordination between BI to simplify the process. Masayuki Yamanaka recalls: “The user reports and PSI cubes was also vital, so the ability to flawlessly interface for Essbase is Excel, so implementing user requests co-ordinate the two areas was a major selling point for us. We during development results in a large amount of VBA [Visual were also happy with the system’s price, and so after considering BASIC for Applications] code being added, creating very large all the factors, we decided on the IBM proposal.” Excel files. Version management was also complicated, putting a large burden on the information system departments. Today, IBM Cognos TM1 is an enterprise planning software platform using the Cognos interface makes development and daily that covers everything from target and budget setting to report reporting tasks run much more smoothly.” creation, scorecard processing, analysis and forecasting. Its

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“We’re now able to look far ahead and gauge the strengths and weaknesses of our inventory levels. This insight should lead to “We’re now able to look far ahead and improvements to our cash flow, which is a major benefit.” gauge the strengths and weaknesses of our inventory levels. This insight should lead to A sales report known as “The Daily Flash” is also being put to good use in management decision-making. Koichi Fukuda improvements to our cash flow, which is a continues: “The Daily Flash is issued as a daily sales progress major benefit.” report for each business unit, region and sales company. We’ve created a system that automatically sends the report out by email

— Koichi Fukuda, Section Head—Corporate Planning Office, TEAC every day, so now our management staff can stay abreast of sales conditions on a daily basis.”

The creation of this environment has changed how staff work, Processing in minutes, not hours particularly in collaboration overseas. The performance improvements from Cognos Business Intelligence have quickly become apparent. TEAC had “Before, making changes in our systems across time-zones completed its PSI cubes, MFRs and sales reports by March used to be difficult,” says Yasushi Inaba. “Today, we can share 2014. It started using PSI cubes and sales reports the following a Cognos screen over a teleconference with the head office in month, and started using MFRs in May to match the timing of and our office in the US, and both sides can find and its financial reporting period. correct errors in real time during the meeting.”

“Entering performance data in PSI cubes used to take several Enhancing marketing processes hours, but the new environment lets us finish it in about three Now that TEAC has organized the basic elements of its new minutes,” says Masayuki Yamanaka. “At this speed, we can verify BI environment, it is planning to implement several more BI the data as soon as it’s been entered, and any mistakes can be initiatives. corrected right away.” “We plan to progressively transfer our BI reports to the Cognos The reduction in processing time for PSI cubes has also been environment,” says Yasushi Inaba. “We’ve started making efforts well received by end users. “Since PSI data can now be analyzed on a trial-and-error basis to create an environment that will right away, users can run simulations based on the data to create enable users to freely create ad hoc reports. Cognos Business and revise plans immediately,” says Yasushi Inaba. Intelligence has such an abundant array of features, and we’re examining how they should be managed by the information “Updating our BI environment has benefited more than just system departments.” our information system departments—we’ve seen the benefits extending out to our end users also,” says Masayuki Yamanaka. TEAC is also looking into using different types of analytics data “The PSI improvements have greatly increased the efficiency for marketing purposes. of the company’s production, sales and inventory planning processes. Inventory can now be calculated automatically by “We’re interested in analysing web data and information checking PSI data on a monthly basis and using it to enter the from social media for use in marketing,” comments Masayuki plans for the following month. Yamanaka. “It’s an area we’re planning on examining and putting into effect in future. Our new BI environment includes “This lets us create stocking plans based on production IBM SPSS® Modeler, so we are planning on looking into how forecasts. Our production, sales and inventory data can be we can use it for forecasting in future. checked globally, and can be filtered to display only particular models. The Cognos TM1 web screens let users check data “Onkyo Corporation is also working on creating MFRs and according to the criteria they specify, greatly improving several other reports, and we expect that the compatibility with convenience.” TEAC’s new BI environment will help lower costs. We want to use these group-wide analytics initiatives to help future business Koichi Fukuda, Section Head at TEAC Corporate Planning growth.” Office, says: “TEAC is considering business expansion opportunities for ourselves and our alliance, so inventory adjustments and other elements linked directly to cash are very important.

3 About TEAC Corporation TEAC Corporation was established in 1953. Its mission is to enrich the lives of consumers by providing high-quality products that meet their needs. Motivated by a desire to push back the frontiers of recording and playback technology, TEAC works on creating attractive products. It is active in the audio device market including areas such as AV equipment © Copyright IBM Corporation 2015 and audio equipment used for music production. It also works in the IBM Japan Ltd market for information devices used in fields such as air travel and 19-21 Nihonbashi Hakozaki-cho Chuo-ku medicine. 103-8510 Japan

About IBM Business Analytics Produced in Japan IBM Business Analytics software delivers data-driven insights that March 2015 help organizations work smarter and outperform their peers. This IBM, the IBM logo, ibm.com, and Cognos, TM1 and SPSS comprehensive portfolio includes solutions for business intelligence, are trademarks of International Business Machines Corp., predictive analytics and decision management, performance management, registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other and risk management. companies. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at Business Analytics solutions enable companies to identify and visualize www.ibm.com/legal/copytrade.shtml. trends and patterns in areas, such as customer analytics, that can have a This document is current as of the initial date of publication profound effect on business performance. They can compare scenarios, and may be changed by IBM at any time. Not all offerings are anticipate potential threats and opportunities, better plan, budget and available in every country in which IBM operates. forecast resources, balance risks against expected returns and work to The client examples cited are presented for illustrative purposes meet regulatory requirements. By making analytics widely available, only. Actual performance results may vary depending on specific configurations and operating conditions. organizations can align tactical and strategic decision-making to achieve business goals. It is the user’s responsibility to evaluate and verify the operation of any other products or programs with IBM products and programs. THE INFORMATION IN THIS DOCUMENT For more information IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, For further information please visit ibm.com/business-analytics EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.

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