"We used to spend more than 18,000 hours every year creating reports. That task has simply been eliminated, and it's a repetitive saving. I expect these gains to accelerate as we grow in expertise, with as much as 50% improvement in the productivity of our information users." (Bill Bruttaniti, Director of Information Technology at the Ertl Company)
Thousands of companies around the world are embarking on data warehousing efforts with only faint understanding of their economic justification, but without measurable value, their data warehouses can lose their momentum and even be terminated. The Ertl Company of Dyersville, Iowa, found a solution to this problem. Ertl is a $220 million, 50 year old manufacturer of replica toys. One of its best-known products, the Bumble Ball, is a classic favorite of youngsters and their parents. Ertl's enormously successful data warehousing experience provides a beacon for other data warehousing managers to use to guide them through some of the tougher problems justifying, planning, and implementing their data warehouses.
This case study describes the characteristics of Ertl's situation, the method it used for planning and justification, the tools that allowed it to gain significant savings and the lessons it learned along the way.
A Typical Problem and a Far-Reaching Goal
"Ertl was a typical mainframe legacy site, suffering from performance problems and backlogs on a machine that couldn't cope with increasing information demands. The only way we saw out of this situation was a radical overhaul of our information strategy. But we had a big investment in mainframe-based technology and legacy information. We wanted a way to progress without writing off that investment," says Bill Bruttaniti, Director of Information Technology at the Ertl Company.
"Ertl's overall goal", according to Bruttaniti, "is to develop a global network and a corporate application suite that runs on any platform. With such a network, all departments can share information so we can deliver the quality products our customers expect."
Despite the constant roar of promises from some software vendors, reinforced by articles in major trade publications, radical shifts to open systems are not generally feasible. Less than one-half of one percent of major organizations have found they can afford to throw out their legacy applications and move wholesale to client/server systems. All the rest must find a coexistence strategy that allows legacy systems to continue to run while new applications are developed. At Ertl, the data warehouse provides the means to implement that strategy.
Ertl did not create its warehouse in a vacuum. It saw the warehouse as a step along the migration path to its goal. So in choosing tools for data warehousing, Ertl recognized the critical role that conversion would play. So Ertl used application conversion costs as an important criterion in selecting the database and tools that it would use for its data warehouse. In fact, as you will see later, that became the determining factor.
Justification and Planning
Ertl's justification for data warehousing was direct and measurable. Users needed information and were already spending large amounts to get it. Ertl's planners found all the places where extensive manual efforts were being invested in generating that information. Identifying the current investments gave the planners two key benefits. First, it gave them a dollar value for their project - 18,000 hours per year translated into hundreds of thousands of dollars per year in savings. Second, it showed them targets of opportunity for the data warehouse - subjects and formats for information that were clearly needed by the organization.
Once the inventory of current reporting efforts was complete, Ertl did the hard work that it takes to re-engineer information access. "We divided the company into three core competencies, and then we mapped out the functional workflow across all the processes and identified areas where we could improve productivity by adding new applications that would act as enablers," related Bruttaniti. One of the easiest places to see the value of this cross-process in formation modeling effort is in the ability of Ertl's users to track information from forecasts to orders to shipments to production status. "The information is available easily and instantly for a range of decision support applications," said Bruttaniti.
Tools that Make the Transition Easier
"You hear promises from vendors that you can just buy your data warehouse," says Bruttaniti, "but that's not true. You have to build it, and it is hard work, and it takes good tools." To build its warehouse while establishing the framework for its future application suite, Ertl decided on a set of criteria and then tested tools to see how well they met those criteria. Among the most important criteria were:
But lowering the cost of conversion was not enough. To gain Ertl's business, SOFTWARE AG had to prove that its ADABAS data management software could outperform other database management systems and offer subsecond response time. Software AG also had to prove that the data could be easily accessed from all the popular query and reporting tools, including its own Esperant. Finally, SOFTWARE AG had to prove that its NATURAL fourth-generation language could improve application development productivity four or five-to-one over COBOL, and that both ADABAS and NATURAL ran well on the mainframe and could run on all other popular operating system platforms.
SOFTWARE AG's products ran through Ertl's tests with flying colors. According to Bruttaniti, the lower migration costs, the mainframe support along with real portability, and the performance all combined to make the decision easy. And now, several years later, the success of Ertl's data warehouse project has led to Ertl's selection of SOFTWARE AG's financial and manufacturing software. This integrated suite of tools "will allow all departments to share information so we can deliver the quality products our customers expect."
Bruttaniti, B., "Maximizing Profitability, Gaining Share, and Minimizing Overhead: The Ertl Story", Commentary of the Director of Information Technology at the Ertl Company, originally from URL http://www.dw-institute.com/cases/ertl.htm, 1994.