Best of BI: Celestica uses BI to open a lucrative revenue source

When CIO Mary Gendron joined Celestica in October 2008, she says the Toronto-based electronics manufacturing services provider had nothing in the way of analytics. But its CEO saw information as transformative and wanted to build up its BI capabilities.

With a BI system now in place, Gendron says Celestica is proving that information has dollar-and-cents value.

Her team selected and deployed a core analytics platform based on SAP BusinessObjects and SPSS Clementine in 2009. Celestica also created a business analytics center of excellence to deliver business benefits across all core functions.

From the start, Tianbing Qian, the company's vice president of IT, says Celestica figured it could take stored data and turn it into insightful information that would help its clients.

Qian points to the use of its BI program to analyze repeat returns, whereby a consumer returns the same item for repair work multiple times, cutting into the profits of Celestica's clients and hurting brand loyalty. Working with one customer in a proof-of-concept case, Celestica's Preventive Return Analytics Project combined 80 million records of product life-cycle data from the customer, competitors and Celestica to help the client identify and remedy the problem. The result was a $10 million cost savings for that client.

Qian says that Celestica soon found that other customers wanted similar analysis of data -- and that they were willing to pay for it. "Our IT department is building up its forecast analytics service, and it is becoming a new revenue source," Qian says. Working with senior business leaders, the analytics team is developing additional revenue-generating services in other areas, including demand forecasting, inventory management, component pricing, sales data analysis and performance management.

John Hagerty, an analyst at Gartner, says only a small percentage of companies are mature enough in the use of BI tools to harness data, analyze it and make their findings available to others for a profit.

"You're starting to see companies that see information as an asset," he says, "but that is more on the sophisticated side."

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