Burlington, Mass. and London, UK - June 20, 2005 - Kalido, the leading adaptive enterprise data warehouse provider, announced that HBOS plc, the UKâs largest mortgage and savings provider, has completed a major supplier risk management phase of its supplier relationship management (SRM) implementation. The cutting-edge initiative gives early warning indications of key suppliers at risk so that proactive business decisions can be taken accordingly to protect the groupâs interests.
All previous stages of the SRM project had involved the aggregation of data from HBOS operational systems, using KALIDO software to build an enterprise data warehouse with master data management functionality, Ascential data transformation tools and Business Objects reporting tools. However, in order to give an even more complete picture of supplier relationships, the procurement team extended the system to include external data feeds. Risk management specialists Dunn & Bradstreet provide HBOS with due diligence insight into its 20,000 or so suppliers, and now supply a comprehensive data file every quarter detailing risk information.
The Business Objects reporting tools in the HBOS SRM system send a file to Dunn & Bradstreet which is returned populated with supplier ratings. The KALIDO enterprise data warehouse consolidates the risk data with existing supplier information in the HBOS SRM system, enabling the team to determine the risk associated with suppliers.
The supplier risk management phase is the latest addition to the HBOS SRM system launched in 2002 to help achieve the major projected cost savings from the merger of Halifax and Bank of Scotland. The award-winning HBOS SRM system provides purchasing and supplier information from across the HBOS subsidiaries, reaching right back to 2001, for analysis by the HBOS Procurement team.
Subsequent phases since the launch of the HBOS SRM include the addition of e-procurement data to obtain for the first time a clear view of all 10,000 line items bought across the entire organization, with detailed spending and usage patterns. The next phase involved the change of the accounts payable system to Oracle with no business disruption as the SRM system was also being extended to include information from HBOS subsidiary Birmingham Midshires. This was followed by extending the reach of the HBOS SRM system to two further subsidiaries, Halifax Life and Pensions, and Clerical Medical, again with no disruption.
The information continuously provided throughout all phases since the inception of the SRM system has allowed HBOS to nimbly drive efficiencies, assist purchasing compliance and better manage supplier relationships across a complex organizational structure. All of this has been achieved in a fraction of the time it would have taken to build the SRM system using traditional methods, which unlike KALIDO software, would have required extensive and costly re-development to reflect the business changes.
Sharon Reason, procurement specialist - systems, HBOS plc, will detail the benefits of the overall HBOS SRM project in a web seminar hosted by Kalido and its strategic partner Business Objects on June 22, 2005 at 11:30 AM EST / 4:30 PM BST.
Sharon Reason said: "The SRM project continues to empower our procurement decision makers, and has been invaluable in delivering the cost savings we required. Our business users needed access to superior quality management information across the group, regardless of any changes in the underlying IT infrastructure or organizational change. KALIDO has tackled everything weâve thrown at it - its flexibility in reacting to business change has been extremely impressive. SRM has quite a reputation within HBOS Procurement, and we have many requests lined up for other data to be put into the system."
"The HBOS implementation has seen enterprise data warehousing come into its own," said Andy Hayler, founder and chief strategist, Kalido. "We thrive on projects of this scale. Our solutions are built on the premise that large organizations have to manage a wide variety of data from completely disparate systems throughout ongoing business change. Through the agility of our unique software KALIDO, weâve been able to deliver significant tangible benefits to HBOS."
The HBOS SRM project, originally implemented by Acuma, the UKâs leading provider of information management solutions, has continued to evolve against a back-drop of continual reorganization of the HBOS group structure and IT systems which support it. At the heart of the solution is KALIDO, enterprise data warehousing software from Kalido, which has enabled the procurement team to seamlessly integrate a diverse range of data from disparate IT systems of subsidiaries brought into the organization since Halifax and Bank of Scotland merged. KALIDO also enables the team to manage procurement master data, such as common descriptions about commodities and categories.
HBOS has now achieved a single view of procurement information while maintaining the local reporting structures, and without the need for operational system standardization. The recently completed risk management phase has added further innovation to the groundbreaking project, by incorporating supplier credit ratings into the system.
After the wide success of the initial phase (May 2002), HBOS extended the reach of the SRM system across the organization, rolling out the project in four further phases, each increasing in scale and sophistication. In conjunction with KALIDO software, data extract, transfer and load tools from Ascential (now an IBM company) are deployed to handle initial data preparation, and Business Objects business intelligence software is used for reporting and analysis.
The HBOS SRM solution has consistently been flexible enough to incorporate both internal and external data feeds, handle dual versions of the same data to allow retrospective reporting, and maintain consistent reporting without disruption even throughout a major business reorganization. KALIDO is designed to accept change as a constant, enabling HBOS business users to rapidly adapt to the continuing integration needs of a large post-merger organization.
The phases following the initial launch are outlined below:
Adding e-procurement data - March 2003
In order to maximize the economies of scale made possible by the merger, and drive significant savings, HBOS needed to gain a clear view of all 10,000 line-items bought across the organization, including pens, paper and personalized goods such as headed paper and business cards which were ordered via the companyâs e-procurment system. E-procurement data was fed into a single KALIDO enterprise data warehouse, allowing HBOS to track overall usage and address previously unanswered questions on spending patterns of purchasers.
This had never been done before, and allowed the procurement team to better manage suppliers and support the finance department responsible for recharging and allocating costs. The availability of this accurate, consistent management information has also assisted in enabling the e-procurement system to subsequently be extended to subsidiaries which run entirely different ordering processes and are located away from the main centers of Halifax and Edinburgh. KALIDO allows the local units - Birmingham Midshires, Clerical Medical and Halifax Life and Pensions - to continue with their normal reporting methods, allowing them to remain agile. However the clear view across all the areas permits consistent reporting to enable the HBOS procurement team to better manage group-wide spending per supplier.
Embracing accounts payables change - January 2003 - June 2003
Business users had begun to use KALIDO to collect and aggregate accounts payable data from Birmingham Midshires, an HBOS subsisidiary whose data warehouse was located in Birmingham. Completely independently of the SRM initiative, HBOS had changed its account payable systems and moved over to Oracle since the project began. The inherent flexibility of the KALIDO solution allowed the purchasing team to rapidly replace all the original feeds with absolutely no interruption to the business users, who remained unaware of the switch throughout. Previously, such a major IT implementation would have resulted in serious disruption to day-to-day operations.
As KALIDO was able to handle dual versions of the same data, the procurement department could compare management information generated by the new accounts payable with that generated by the old. This was a huge benefit as typically it is very difficult to compare data sets that span the lifetimes of two accounting systems.
Extending the reach - December 2003
This phase was designed to extend the reach of the SRM system to give the procurement team a complete view of supplier spending habits and relationships right back to 2001, irrespective of which reporting system was used at the time. Procurement systems from two further subsidiaries - Halifax Life and Pensions and Clerical Medical - were brought into KALIDO at the end of 2003. Purchasing information dating back to Jan 2001 was loaded in, and, despite major differences in the way the data was coded and structured, KALIDO enabled analysis alongside much newer data.
Both subsidiaries have since closed their accounts payable systems and they too are now fed into a central Oracle system. Again, this was achieved seamlessly with no disruption in reporting.
Present: Adding external data
The current phase has involved the assimilation of a vendor-ratings system into HBOS SRM to help safeguard the bankâs interests, using risk data supplied by Dunn & Bradstreet.