GE Rail Services (GERS), a finalist for the 2009 Gartner Business Intelligence (BI) Excellence Award, needed a solution to help improve the efficiency of commercial, financial and service aspects of the business, as well as reduce operational costs and minimize maintenance challenges. This led to the creation of a data warehouse, a BI platform, metrics, and a portfolio of analytic applications, including the Shoptimizer maintenance application, which helps optimally route the company's railcars for repairs to the best shops, and recommends potential repairs based on schedules and predicted maintenance needs.

• Since 2001, GERS has been investing in BI. It chose to purchase a best-of-breed BI infrastructure upfront to meet a broad array of business needs, and has continued with this technology.
• GERS believes analytics and data warehouse are not dependent on each other. The company has taken a parallel approach to warehouse and analytic application development, ensuring that GERS delivered incremental benefits without the delay of major development cycles.
• GERS created a core BI team within IT that reports to the CIO. That team works very closely with the business to create and execute its BI strategy.

• Consider a dual-investment approach to BI and performance management by planning for quick wins to build credibility, maintain momentum and justify additional purchases, while building an infrastructure that will meet a broad array of requirements over the long term.
• Focus your BI investments on initiatives that resolve key business issues (in this latest case, reducing maintenance costs). This will likely yield the highest returns and easily gain support from the business.
• Introduce a BI competency center (BICC) or core BI team to create and execute the BI strategy. The BICC helps unite the enterprise with a single approach to reporting and analytics, as well as leverages IT infrastructure, architecture and project management office (PMO) groups.

In March 2009, GERS was a finalist in Gartner's BI Excellence Award competition. GERS has invested continually in BI since 2001, and has achieved significant business benefits, with its best-of-breed BI infrastructure able to meet a broad range of business requirements. Key to its success (the company believes) has been the close coupling of the core BI team with the business, a strong commitment to BI with a strong sponsor (CIO) and an innovative approach that has yielded dashboards of key metrics, self-service reporting and a strong portfolio of analytic applications.

This document was revised on 19 August 2009. For more information, see the Corrections page on gartner.com.

GERS, part of GE Capital, is a leading equipment service provider that offers the most diverse fleet of railcars in the business, as well as a full range of intermodal assets, to transport vital commodities where and when they are needed. With more than 245,000 rail assets, GERS provides leasing and financing, administrative and repair services, and monitoring and tracking to ensure safe transportation. GE is a $152 billion global business employing more than 300,000 people worldwide.

Historically, GERS had a fragmented proliferation of tools that provided a mixed variety of reports with limited analysis, which were time-consuming to develop and maintain. Senior leaders at GERS needed to understand the true cost drivers, and required a solution to help improve the efficiency of operational, commercial, financial and service aspects of the business to maximize profitability. In an attempt to consolidate disparate data and standardize its reporting, GERS implemented a data warehouse and established an analytics team. It then began building a metrics framework to provide standardized reporting across various business functions. Over the years, GERS has built a strong portfolio of analytic applications across all business domains. Its major challenge in the past couple of years has been related to repair and maintenance, which are the biggest cost centers in GE Rail, costing over $100 million, with more than 400,000 repair events per year.

Under the sponsorship of the GERS CIO, a core BI team was assembled consisting of data warehousing, performance metrics and advanced analytics. This innovative, centralized approach allows GERS to capitalize on the synergy across these three areas. The functional expertise, combined with the IT process rigor, has helped the BI team become highly productive.

Implementation of the enterprise data warehouse began in 2001, with a team (composed of internal IT, internal business resources, and external resources from integrators, vendors and others) of four project managers, six BI architects/developer, 10 extraction, transformation and loading (ETL) architects/developers and data modelers, six subject matter experts/business analysts, one database administrator and one data warehouse administrator, whose responsibilities are all interwoven to provide values into multiple areas. GERS estimates that the initial costs of the project were approximately $1 million in software and services. GERS built a comprehensive BI solution as a "one stop shop" enterprise BI portal that meets a wide spectrum of user needs, from self-service and ad hoc analysis, to more than 400 performance metric reports organized by business function, to dashboards, and over 30 sophisticated strategic and operational advanced analytics applications.

The first subject area in the finance domain was loaded into the data warehouse in May 2001. Around the same time, there was a business need to answer key questions around strategic supplier, volume, pricing and service cost questions for an important supplier consolidation initiative. GERS built an optimization model that resulted in huge savings the first year, which helped establish the value of BI/analytics to the business. The GERS BI team was able to leverage the parallel development of these two areas to prioritize the order of data subject areas that were brought into the data warehouse. This innovative approach was critical to delivering business value along the way, and sustaining leadership support and project funding.

The best-of-breed infrastructure implemented by GERS (see Figure 1) is capable of meeting the diverse range of user needs with self-service ad hoc analysis, pre-prepared reports and metrics, and sophisticated analytics in a single portal. The foundation of the BI infrastructure is a data warehouse built using Teradata, fed by ETL and integration capabilities from IBM and Informatica. The planning capabilities are provided using Oracle/Hyperion Planning. Self-service and ad hoc analysis is delivered, via a BI platform using SAP BusinessObjects, to dashboards and more than 400 reports based on standardized business performance metrics organized by business function.

GERS has developed a range of sophisticated analytics applications (mostly through internal resources) across different business functions. In fact, more than 30 sophisticated strategic and operational advanced analytics applications (including capital allocation, profitability analysis, customer segmentation and the Shoptimizer) have been delivered via SAS. GERS has also added a new growth platform for the service business, providing BI solutions bundled with product offerings to external customers. One primary example is the Shoptimizer — a real-time operational analytics and allocation application that helps GERS optimally assign rail cars that are in need of repairs to the most appropriate shops, subject to capacity constraints and shop capabilities.

Prior to Shoptimizer, rail cars were repaired reactively, and weeks could be lost by inefficient routing as repair shop selections were made without critical knowledge of shop capacity, capability, rail car movement patterns and overall rail car condition. The system analyzes the rail car routine maintenance schedules and uses a sophisticated set of business rules (on over 20 constraints and dynamic parameters) to predict repair and maintenance needs. Based on this assessment of necessary work, the system recommends the most appropriate repair shops and services, which saves more than $1 million per year.

The data warehouse, self-service reporting, ad hoc analysis capabilities and advanced analytics were developed in parallel. The parallel approach helped to prioritize the order of data subjects to be brought into the warehouse, so that the business did not have to wait too long before seeing business value, thus delivering interim benefits. This approach was critical to delivering periodic and successive business value, as well as sustaining leadership support and project funding. Most recently, GERS created a common enterprise BI portal for all reporting, metric, dashboard and analytical needs.

Fundamental to the BI program's success has been a close working relationship with business leaders to understand the problems, identify opportunities, and develop optimal solutions, together with the establishment of a centralized, core BI team within IT that consists of three areas: data warehousing, performance metrics and advanced analytics (an area that is traditionally on the business side). Although separate from the business, and reporting to the CIO, the BI team's process and functional expertise and skills in project design and delivery has helped it to become highly productive. For example, a project/funding approval committee composed of the CEO and his direct reports meets quarterly; an analytics steering committee composed of cross-functional senior leadership (all CEO direct reports) meets monthly for high-level project review and to prioritize projects; and numerous IT meetings happen regularly that also help set the direction for the BI system.

This tight coupling of IT and business has delivered an iterative series of projects (see Figure 2) during the past eight years. GERS utilizes its internal IT team to continually extend the BI solution, and, where necessary, continue to work with vendors to bring in subject matter experts to consult on issues and other relevant and emerging technologies.

During the eight-year period of investment in BI, GERS has achieved a large range of significant business benefits, summarized by function as follows:

• Sales/marketing/finance
  • Profitability analysis by all key dimensions
  • Focus commercial strategy on true drivers of profitability
  • Determine the leverage and capital requirements at the product level for capital expenditure (capex) pricing
  • Forecast reserves for cost accruals
• Risk and collections
  • Reduce outstanding accounts receivable by more than 50% by optimizing collections process
  • Reduce bad-debt reserve by more than 25% in less than 12 months
  • Understand customer delinquency behavior and optimize collections
  • Implement regulatory compliance
• Operations
  • More than $4 million annual savings by strategically consolidating the repair shop network
  • Savings of more than $1 million by identifying repair inefficiencies and overcharge
  • More than $1 million per year in freight savings, with reduced shop visits and better shop flow
  • Several targeted applications to minimize supply chain and fleet maintenance costs
• Asset management
  • Help portfolio managers make better capex, remarketing and pricing decisions
  • Improve net income by increasing the depreciable life of assets
  • Enable capacity planning and decisions related to fleet acquisition, defleeting and the creation of an optimal portfolio with life cycle profitability analysis
• Services
  • BI solutions bundled with product offerings to customers
  • Pricing model that reduces the quote cycle time from several weeks to a few minutes

GERS is also becoming a recognized BI leader within GE. Leaders and managers from other GE businesses, such as GE Money, Infrastructure, Consumer and Industrial, Commercial Finance, Energy, Aviation and Healthcare, often consult GERS for advice and best practices.

However, not everything that GERS has attempted has been so successful. For example, it decided (for economic reasons) to switch service providers, and found that the changeover was much more complex and expensive than had been envisaged. Additionally, not all the applications that GERS has implemented have continued to be used. A few of its early applications were developed without such a strong business case, and, once rolled out, there was insufficient user adoption so, over time, they became obsolete. These application failures have helped GERS to ensure that the subsequent applications have been developed successfully with a sufficient user buy-in.

GERS has held true to its initial belief in the value of BI and a BI strategy to partner closely with business leaders to understand the problems, identify opportunities and develop optimal solutions.

Since 2001, GERS has followed a strategy to invest in a best-of-breed technology infrastructure that provides a solid, robust technology foundation to solve a variety of challenging business problems. Furthermore, it has managed to standardize as much as possible and build robust, self-service analytic applications instead of just providing ad hoc support to the business.

GERS continues to deliver cross-functional solutions to manage costs, drive core business growth and achieve regulatory compliance. By focusing on the single-biggest impact to the business (maintenance cost), GERS has built a portfolio of applications to reduce maintenance expenses.

GERS now has a long-standing BI investment that is reaping significant rewards and generating significant financial benefits, enabling successful regulatory compliance and providing unique competitive advantage. Mirroring Gartner best practices, GERS has implemented a BI and performance management framework using a best-of-breed infrastructure to support all the necessary business use cases, and established a BICC to be the focal point of BI innovation, with close connection to the business.

Senior leaders at GERS view the BI platform as a strategic investment to help improve the efficiency of operational, commercial, financial and service aspects of the business. By defining, developing and publishing standardized reports and metrics, GERS has not only generated huge efficiencies by reducing manual effort, but it has improved data integrity and consistency across business functions. By focusing its solutions on addressing the most significant causes of cost, GERS has found innovative ways to make transformational cost savings.

GERS is continuing to invest in BI, and is planning some new applications for its operations area to continue the focus on optimizing the supply chain process and taking all unnecessary costs out of the overall maintenance and repair workstream. GERS plans to continue to work with the business to build additional reporting and analytics capabilities — such as improved credit and risk exposure analysis, reporting and analysis of operational metrics, and an accounts receivables/collections dashboard. It is also investigating how to leverage service-oriented architecture to help deliver its analytics applications to external customers as a premium-based service, transforming IT from a cost center to a revenue-generating part of the business.