Development Of Price Management System

Background

Founded in 1833, The Lafarge Group today is the world's leading producer of building materials.  With sales in excess of €16.6 billion for 2002, a workforce of over 77,000 and a presence in 75 countries, the Group holds top-ranking positions in each of its four divisions: cement, aggregates & concrete, roofing and gypsum.  Lafarge Group offers a comprehensive range of products and solutions for each stage of the building process and for all areas of the construction industry - from architect to tradesman, from distributor to end user.

Lafarge Plasterboard Limited, a subsidiary of the Group, is a major supplier of innovative drywall solutions for the building industry.  As specialists with in-depth knowledge of all aspects of the gypsum industry, Lafarge are widely recognised as leaders in the field with a reputation that is second to none.  With the backing, resources and expertise of an international organisation, the company continues to lead the industry with innovative solutions and a quality of product that sets them apart from the competition.  The continuous drive for excellence and market leadership is underpinned by a sustained investment in the best technology and materials.

Business Drivers

Lafarge Plasterboard operates within an extremely price sensitive market, placing considerable pressure on the organisation's need to manage costs and to develop pricing models that help the business to maintain a competitive price positioning.   Increasingly, these pricing structures are becoming highly complex in nature, often negotiated on a case-by-case basis by the sales teams and tailored to match specific customer arrangements.

The move towards increasingly tailored pricing structures has resulted in the need for an effective Price Management System to ensure that the business can easily and accurately determine the impact of individual pricing models.  Access to a wide range of timely, pertinent data from a number of different sources and the analysis of this data is vital to the development of sound commercial propositions and to the organisation's ability to meet customer profitability objectives.

Solution

In recognition of the need to implement greater efficiencies and tighter controls within the business, Lafarge Plasterboard chose to implement an Enterprise Resource Planning (ERP) system.  The new ERP system has ensured that all of the data required for an effective price management solution is captured. In itself, however, the new system would not provide the functionality necessary to manipulate the data and present it in a form that would allow it to be utilised effectively for price management purposes.

The challenge therefore was to implement a solution which would enable Lafarge Plasterboard to pull together all of the data available from multiple data sources, analyse it and provide reports to the sales teams with the relevant information required to make informed customer pricing decisions.

Having worked with the end users to establish a clearly defined set of requirements, Sopra Group technicians developed a dimensional data mart that is populated automatically on a daily basis.  The data mart pulls together relevant pricing and discount information from a number of disparate sources across the business.

Taking this source data and applying a complex set of business rules, end user sales teams are presented with a series of easy to use reports that deliver a common graphical view of individual clients.  The combination of Lafarge Plasterboard's detailed business knowledge and Sopra Group's technical expertise, ensured the delivery of a fast and easy to use reporting infrastructure which provides the ability to monitor and manage pricing and discounts.

Benefits

The benefits delivered through the successful implementation of the Price Management System can be summarised as follows:

• Improved effectiveness of sales process and improved profitability.  The net result overall has been a marked improvement in the ability of the sales function to provide commercially viable and competitive pricing structures to their customers
• Improved decision-making processes through the availability of timely, accurate and pertinent pricing and profitability information
• The system provides the ability to cover future business requirements through an architecture that will grow with the business
• Easy to use reporting mechanism.  Pulling together data from multiple sources into one 'simple' user front end
• Zero performance impact on current live business systems.

Why Sopra Group?

Having worked closely with Lafarge Plasterboard for over ten years, delivering solutions that support the long-term requirements of the business, Sopra Group was selected as a partner for the development of the new Price Management System.  Chosen because of their detailed knowledge of the business and IT systems, together with a proven track record of delivering business intelligence solutions across a number of industries on time and to budget, Sopra Group worked in close collaboration with Lafarge Plasterboard throughout the project.

"We have worked closely with Sopra Group for a number of years now and have always been delighted with the results.  The Price Management Project was no exception.  With their understanding of our business, Sopra Group provided the expertise and skills that allowed us to hit the ground running and to deliver significant benefits within an aggressive time frame," said Richard Buxton, IT manager, Lafarge Plasterboard.

The Future

As user requirements evolve and more data sources become available over time, the Price Management System will continue to be developed, providing the most relevant and useful information to the sales teams.  Similarly, Lafarge Plasterboard has recognised the wider benefits that strategic business intelligence solutions can deliver and is looking at the opportunity to exploit the disparate data sources within the business.