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SAS is the market leader in providing a new generation of business intelligence software and services that create true enterprise intelligence. SAS solutions are used at about 40,000 sites -- including 96 of the top 100 companies on the FORTUNE Global 500® -- to develop more profitable relationships with customers and suppliers; to enable better, more accurate and informed decisions; and to drive organizations forward. SAS is the only vendor that completely integrates leading data warehousing, analytics and traditional BI applications to create intelligence from massive amounts of data. For nearly three decades, SAS has been giving customers around the world The Power to Know®. Visit us at www.sas.com.
Success Stories by Industry
Oil Giant INA Clarifies Supplier Relationships With SAS INA is Croatia's leading oil and gas company with an annual turnover in 2002 of $2.4 billion (€2.1 billion). The most important issue for INA at present is the move to privatization, which the company is currently undertaking. The idea behind the privatization process is that growth and development through strategic partnerships will strengthen INA's competitive position in the industry. INA starts from the advantageous position of having a strong national presence, good knowledge of its market, strong logistics, experience in selling many different types of goods, excellent retail locations and a high average fuel turnover. One of the steps the company has taken to attract investors is to increase the transparency of its various business practices. To this end, INA has chosen SAS to provide business clarity, specifically in regard to its relationships with its suppliers. This is highly significant because INA's retail division oversees the distribution of more than 1,500 consumer products. "The SAS system provides a great benefit to both INA and its suppliers in that it gives fast, transparent and easy access to important retail data via a Web browser," says Darko Hertarić, director of INA's Commercial Department. "We can now monitor and control retail inventories and also define the optimum type and amount of specific goods to be stocked at targeted gas stations." Instant Access to Timely Data INA's domestic retail segment is responsible for the procurement, transportation, storage, and bulk and retail sale of oil and gas products and consumer goods. The retail network is organized in five business centers made up of 16 regional units. The role of the business centers is to provide business and operational support, oversee the retail network, and manage commercial transactions, pricing and marketing. The business centers and regional units offer assistance to the network of 397 gas stations and 30 special retail points owned and operated by INA. INA's Commercial Department first worked together with SAS in 1999 and, encouraged by the good relationship they enjoyed, decided to develop a new, robust data warehousing system and client server application to furnish its suppliers, and their own managers, with useful and timely information. INA chose SAS/Warehouse Administrator, SAS OLAP Serverand AppDev Studioto extend access to data and analysis results to a wider range of users at business units all over Croatia at minimal cost. INA's SAS data warehouse contains more than 50 million observations, with approximately 10 million added to that per year. Five years of history are contained within 9 gigabytes of storage. "The company has worked intensively on the introduction, development and improvement of our SAS business intelligence system," says Hertarić. "We used to give our suppliers information by mail or by fax, but now we can give it to them online. It is so much easier now. All they need is a password, and they have instant access to current information via an extranet developed by SAS. Reports are presently updated on a weekly basis, but will soon be refreshed on a daily basis." INA is initially offering use of the system to its top suppliers at no cost during a trial period and is looking into charging for its use in the future. Suppliers now have quick access to information on precise sales of stock, which helps them to decrease their own distribution costs, including labor and transport costs and inventory management. Response from the suppliers using the system has been enthusiastic. Says Hertarić, "The biggest suppliers, such as Coca-Cola, are the ones benefiting the most from the system so far, and they have had a very good reaction and provided positive feedback." Enhanced Reporting and Improved Decision Making In addition to providing important information to their suppliers, the system also puts data required for general, as well as strategic, decision making at every manager's disposal within the company. "The SAS system analyzes the relevant information for the regional managers, who get reports over our intranet on all our different business units and their contributions to INA's business activities," says Hertarić. "The regional managers then have the ability to report on business activities directly applicable to them and to share the information throughout the enterprise," he continues. "The result is that business units can be more flexible, and they can focus on developing business activities that will contribute to the company's bottom line. Further, sales can be analyzed both during and after marketing campaigns in order to make decisions about short-term and long-term promotional activities, depending on turnover results. We can also define the exact brands and products that are most popular and those that are the least popular in particular regions, and this knowledge will help us determine which consumer goods should be stocked at specific retail sites." This project has successfully enabled INA to identify its main suppliers – those companies whose business activities and consumer goods generate the best margin. Using this knowledge, INA hopes to establish long-term business relationships with the most profitable suppliers, while lowering site-operating costs. A Very Good Return on Investment According to Hertarić, the system took only six months to put into place from the idea stage to project completion. "We have had a very positive experience working with SAS. The company is very professional, their analytics are very powerful and they helped us achieve what we wanted. SAS gives us different methods to see our data, providing us with a new perspective on our suppliers, customers and sales." Asked to quantify the results of their SAS system, Hertarić says, "We have achieved a very good ROI, I believe. We are currently developing a piece of software that will monitor the activity of the suppliers with the system, and that will give us a definite way of measuring the system's effectiveness. Concludes Hertarić: "The most significant benefit is bolstering decision making regarding the stocking of consumer goods at the gas stations – decisions that will be enhanced by detailed knowledge of sales issues throughout the years, and that makes all the difference." About INA INA, founded in 1964, is Croatia's leading oil and gas company. INA has approximately 15,000 employees and an annual turnover of $2.4 billion (€2.1 billion). Principal group activities include exploration and production, refining and wholesale, marketing and retail services. Headquartered in Zagreb, INA has begun privatizing and has recently sold a 25+1 percent stake in the company to Hungarian oil company, MOL plc. --------------------------------------------------------------------------------------
Copenhagen Energy holds the balance Accuracy in forecasting amounts to cost savings in delivery Fortunately, it is extremely rare for there to be a major power failure in Denmark. However, when it does happen, as it did in September 2003, when the whole of Eastern Denmark went black together with Southern Sweden, there are repercussions. On that occasion the fault consisted of a fall-out in a Swedish power station in Oscarshamn which, together with a breakdown at a switching station, caused a power failure of major proportions because the production was less than the consumption. Electricity is traded in a free market as a commodity, but electricity cannot be kept in storage. It must be used at the same moment it is produced, otherwise the surplus product effectively goes up in smoke. On a daily basis, Denmark must maintain the balance. In Eastern Denmark, it is the Elkraft System that has the overall responsibility for the electricity supply. Elkraft has 16 partners responsible for balance. Every day of the year, the partners must report planned consumption and production of electricity – including wind turbine power – to Elkraft. This forms the plan for anticipating power consumption and producing the right amount of electricity, hour by hour over a 24-hour period. As of 1 March 2004, Copenhagen Energy (Københavns Energi) was approved by Elkraft as a balance partner. From now on the Copenhagen-based energy company will predict the next day’s consumption of electricity hour by hour. The balance between consumption and the purchase of electricity reflects directly in the baseline because any imbalance will be expensive and, in the worst case, the supply reliability is threatened. Financial incentives for accuracy "There is always equilibrium in the plan that is drawn up, for no balance partner is permitted to report anything other than precisely the consumption that matches their buying of electricity," explains Market Manager, Lene Sonne of Elkraft System. In practice, however, Elkraft has a safety margin available in case consumption and production do not match the predictions. Elkraft is responsible for keeping the current stable and monitors the consumption round the clock. Because those responsible for the balance as a whole have consumed less power than notified, if imbalances do occur, then Elkraft buys the surplus power and sells it on to other buyers. Or, if necessary, Elkraft ensures that a power station with which Elkraft has a prior agreement, reduces the production. Alternatively, the power station can increase the production of electricity if the consumption is greater than anticipated. Control of the variations "We are highly dependent upon the predictions of those who are responsible for maintaining target levels. Therefore, being responsible for balance is quite a demanding position. We use financial incentives to encourage them to predict as accurately as possible. In principle, it costs the balance partners more when they deviate – positively or negatively – from what they predicted," Sonne points out. When the accounts are settled, the balance partner finds out the financial implications, as Elkraft checks and measures on an hourly basis to see whether the predictions for the day have been correct. Any departure impacts on the account in one way or another. When Copenhagen Energy became a balance partner on 1 March 2004, they did so with a brand new, advanced SAS system for forecasting electricity demand on the part of all their customers in Zealand. "We conducted a wide range of tests on historical data and tried out parallel forecasts before we implemented the SAS solution, and each time the outcome was impressively close to the actual figures," explains Energy Market Manager Mikael Gynther, of Copenhagen Energy. But even before that there was time allocated to developing a flexible model that is able to take almost all factors into consideration. The basic model is based on historical data pertaining to electricity consumption, but new input is constantly being added regarding movements in the customer population and the weather. In the same way, new and one-time events can easily be added to the calculation model when, for example, there are moveable public holidays, national sporting fixtures, cultural evenings, crown-prince weddings and countless other parameters that affect energy consumption. Quickly recouping costs "It is of great advantage for us to handle forecasting internally. We expect the costs in connection with the precise predictions to be able to be reduced by up to 50 percent. So it is a matter of considerable savings," says Gynther. Annually, Copenhagen Energy handles up to three terawatt hours, corresponding to three billion kWh, or approximately 10 percent of Denmark’s annual electricity consumption. However, he is especially satisfied with the fact that the investment costs of the solution amounted to only about a quarter of what the energy company had originally expected when it decided to go in for a state of the art solution. "This is a ‘ray of sunshine story’ on top of an especially successful project. It was finished in time. It is flexible and has a great commercial potential, and has also afforded us strategic opportunities that we have not had before. At the same time it strengthens the supply security. In a nutshell, it is everything we had hoped for," says Gynther.
The world's largest rail system uses SAS® to stay on track Business intelligence helps Russian Railways increase efficiency and lower costs The National Russian Railway Company (Russian Railways), the country's third-largest national corporation, carries more than 80 percent of Russia's freight and over 45 percent of passenger service, employs 1.2 million people and has an annual income of US$20 billion (€15 billion). "It's a huge system," says Anna Belova, Vice President, Russian Railways. "We're not only the largest Russian transportation company, but also the world's largest – and we play a pivotal role in the national economy." Following three years of reform, the former ministry (which combined regulation and business activity) incorporated and became a 100 percent state-owned shareholding company. The reform process has also seen an increasing use of SAS in the business to support traffic management, sales volume growth, geographical expansion and performance improvements. "The objective of the reform program was to separate business activity from the government regulator function, while also increasing efficiency," says Belova. Lowering transportation costs to reduce the final cost of products produced by businesses is considered critical for the development and competitiveness of the national economy. "A key issue is productivity, an area in which technology plays a central role. This means using resources in a more competitive way and creating value in the company. To this end, we have strategies aimed at improving sales, purchasing, core business activities, accountability and so on. Our goal is to retain leadership in our existing markets and move into new ones – for example, optimizing routes between Russia, the Commonwealth of Independent States (CIS) and Baltic States." She says that innovative solutions like SAS, together with the unification of systems across the enterprise, are the catalyst that enables such strategies to be implemented: "This technology is having a dramatic impact on Russian Railways." Business intelligence – for a huge business SAS is helping Russian Railways to ensure better freight forecasting and planning that meet the demands of stakeholders, investors and industry regulators. "We've been using SAS for around eight years and have a number of systems we consider essential for our business," Belova continues. "These include a core data warehouse and business intelligence system, now used by 1,000 people. The analytical reports it provides help employees to forecast the various scenarios involved in working with different clients, in terms of freight movements, to forecast freight turnover." Economists, analysts and decision makers use these insights to both scrutinize and better manage the business. In this way and others, says Belova, "SAS is having a direct input into the financial and economical characteristics of our company." "We're also using SAS to develop a corporate system to support analytical decision making as we implement our strategy," adds Belova. This involves providing a set of aggregated key performance indicators (KPIs) in subsystems that cover both strategy and operations. "We've had very good results," she says. "This whole approach is designed to simplify decision making: from strategy development through risk management, financial management and marketing policy to the transport process itself." She says a major reason for choosing SAS was the scale of Russian Railways' business and its requirements. "We have an enormous amount of data – in the asset register alone, we have a billion items. And each day we have 30,000 requests from customers to move goods across the network. So we need to hold huge amounts of information as well as provide consistent and accurate analytics on all the characteristics required. SAS suits our demands." Monitoring performance Another example of how SAS works in practice is by providing a system that monitors the movement of freight railcars. Through improved management of empty railcars, the company can increase productivity and efficiency throughout the cargo delivery chain: a key performance indicator is "how long an empty car is moving without freight." Reducing the time a railcar is empty has clear implications for the business, not least in minimizing delivery delays, improving customer service and reducing railcar reserves and storage costs; for example, reducing the railcar pool by 400 cars is equal to a US$7 million (€5.4 million) savings. "This involves a number of inter-related tasks," explains Belova. "It's extremely important to know where to locate the parks for empty railcars because you have to accurately forecast the freight load into the railcars for the following day, the following months, and so on – bearing in mind that each day we're loading over three-and-a-half million tons of freight across Russia. That's a tough challenge. With SAS, we can simulate and forecast relocation of railcar parks, bringing in data on, say, the volume and nature of requests for freight loading. Of course, we want to increase the productivity of our rolling stock compared to our competitors." Empty railcar distribution analyses provide insights into how operational costs can be reduced and how to optimize distribution to meet current and future demand. Faster, more efficient information delivery Belova believes SAS is helping Russian Railways to make better decisions on how to run its business, which in turn is helping reduce costs and increase efficiency during a period of continued change. The net result is "added value." "Instead of looking through vast amounts of data in our various systems, we have a unified data warehouse from which people extract their data and it's analyzed automatically. This is an extremely efficient resource – you can provide reports based on real needs generated by the current demands of the market. And everyone has access to the same information." Other benefits include a reduction in the number of people required for certain tasks, the availability of higher quality information, and speed. "Sometimes we need to provide analytical models and forecasting analysis in a very short time period," explains Belova. "Given the scale of our business, it's difficult to imagine how this would be done any other way. "The economy is growing fast, and it's extremely important for Russian Railways to soothe the demands of our developing economy. We need to explore areas such as how we reallocate investment resources, whether we'll develop the network infrastructure and offer new services, whether we should buy new freight or passenger railcars, and so on. Business intelligence is critically important in identifying and qualifying the right strategic priorities for us to pursue as we move forward. Bearing in mind these challenges, business intelligence is clearly very important to Russian Railways – so we will continue investing in information technologies." The future looks bright The outlook for the business is good: "Experts have said that further improvements in our corporate management rules and procedures, starting from 2007, will ensure an aggregate annual growth of our capital value of between 5 and 8 percent above inflation," says Belova. In terms of the national economy, Russian Railways is also predicting a reduction in transport costs for Russian producers of 17.4 billion rubles (€480 million) in 2007 and 81.6 billion rubles (€2.3 billion) in 2010 – all thanks to improved systems and processes aimed at more effective management. "Corporate performance management, based on our extensive use of technology like SAS, will provide Russian Railways with an extra competitive advantage: increased profitability and a higher rate of mobilization for equity capital for promising projects," concludes Belova. "We'll have wider access to the global loan capital market to support stable economic growth together with a reduction in the cost of outside investment resources used."
--------------------------------------------------------- Paving the Way to Efficiency It's no mystery--at the State of Illinois Department of Transportation, a SAS Data Warehouse called MISTIC is helping pave the way to better business decisions and an improved highway system. The Department's test information group, responsible for maintaining labs and facilities for testing road building materials and developing new product specifications, is playing a crucial role in the process. The group collects data from various types of tests, analyzes it, and then uses it to make decisions about specification development, problem solving, determining whether materials are acceptable for incorporation into a project, and quality control. According to Dave Wheat, manager of the test information group, there was a wealth of data, but it was not easily accessible before the development of the data warehouse. "Our large IMS (MISTIC system) databases have been very efficient and reliable," explains Wheat, "but they do not provide the ability to look at data and view it from different perspectives." "We recognized the need for some way of analyzing data to address our quality control specifications," he continues. "It became obvious that we needed a data warehouse to accomplish this and to enable individuals to use that data to help them in their decision making processes." Using SAS software, the group developed a MISTIC (Materials Integrated System for Testing Information and Communication) data warehouse. The warehouse uses online views, reports, and graphs to provide easy access to departmental test data via user menus defined by major material categories such as aggregate, cement, and concrete. Menus of producers and products, test records, mixture designs, contracts, and assignments are also available through the application. According to Wheat, SAS software was chosen for the warehouse because of its analytical power and portability. "SAS is able to respond to real-world questions. No matter how many twists and turns there are, the SAS data warehouse enables our users to access the data they need to make decisions," says Wheat. "SAS answers all of our questions and it never lets us down." Wheat has also been impressed by the way it handles data integrity. "From time to time an engineer has challenged the results of SAS software, but when the dust settles and the follow-up analysis is done, SAS is always right. "The impact of data warehousing on our group has been very positive, and we no longer have a backlog of user requests," adds Wheat. "We can now spend our time enhancing the warehouse and developing new tools so users can obtain their own answers when they need them. "With SAS software, we are literally able to do hundreds and hundreds of queries for less money. As opposed to the past, users now have the capability to generate queries, graphs, and statistics and perform their own analyses--the difference is like night and day."
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