February 27th, 2015

Honam Petrochemical’s Quest for Better Management Reports

Honam Petrochemical is a company based out of Seoul, South Korea where it was founded in 1976 and is a part of the Japanese conglomerate Lotte's Korean network. The operations are spread out in places such as China, Hong Kong, Moscow, New York etc. and the total revenue exceeds $6.75 million. In 2010 Honam acquired Malaysia's Titan Chemicals for $1.27 billion and most companies in the Lotte network hold majority shares in Honam Petrochemical. The most important product for this company is the production of ethylene and its byproducts like ethylene glycol, polyolefin, high density polyethylene, benzene and ethylene oxide for making polyester and antifreeze solutions for automobiles among other products. This company employs more than 2200 employees (SAP Insider, 2011).
                 Honam Petrochemicals have an ambitious plan of becoming the top chemical company in Asia and is looking to bring in $10 million is sales from their operations across different Asian markets. The plan was to strengthen the existing business, expand the overseas operation and develop in new business. To put this plan into place executives at Honam needed to make business decisions and investment on the basis of reliable and consistent data which could be access at any point in time. There were challenges with the existing system with data manipulation, data processing and the availability. These reports were published on a regular basis and the senior executives did not have access to the raw data at any point in time. These reports came a little too late for critical business decisions and hence the executives needed direct access to unsanitized and relevant data which could be accessed at any time to make a decision or use it as a fallback point. Honam had over 7 years of experience using the SAP ERP system for planning and had a very robust data warehouse from which reports could be generated and when they started looking for an enterprise wide data solution, the familiarity with SAP based products and integration and functionality benefits drove technology to choose SAP BusinessObjects solutions.
Previously the company had relied on SAP business explorer and with the new reporting requirement the company decided to use SAP BusinessObjects Dashboards and SAP BusinessObjects Web Intelligence. SAP dashboards is a tools which has excellent interoperability with Web Intelligence, Crystal reports etc. for reporting and analysis. The main features included scalability, ease of use for the users, flexible in development and highly personalizable. These BusinessObjects solution provided integration to leverage existing infrastructure and also useful in performance management, planning, reporting, query and analysis, and enterprise information management. Another useful feature of these tools was the ability to define a query by dragging and dropping relational objects, dimensions, display data using regional formatting, create filters etc. SAP BusinessObjects Web Intelligence is a tool for transforming existing data and exporting it to design studios for analysis and use by mobile and desktop users. This tool has the ability to create waterfall charts and enhance formatting etc.
                During the development and user requirement phase the IT team identified about 200 high level users who would have access to the new system and also gathered feedback on the reports that they were currently receiving and the usefulness of each of these reports, Once this was identified and sorted the executives were asked to list any new reports that could add value to decision making. This exercise was done to identify the right set of reports, reduce redundancy and to ensure that only the measurable units of informational are used to create strategic reports for the management. The IT team built the system to extract information from the SAP NetWeaver warehouse and then create custom reports which was simple to use with minimal training to access the data and reports.
Instead of using the traditional top down model to introduce this new system, The IT team had to visit Honam’s manufacturing plant and explained the benefits of the new system and how to use it. The main feature was the creation of custom dashboards to each level in the organization namely the consumers had access to tactical dashboards, while the operational dashboards were available for operational and financial management and strategic dashboards were available for the executive
management and this way the flow of information was restricted at each level. After the implementation of the new enterprise system the users now have access to unsanitized data and the executives can now make timely decisions because they no longer need wait for the reporting teams to collect and process information. The management now has greater accessibility to the tools and reports and these reports can be accessed daily, weekly or on a monthly basis. The factors that helped Honam most with this enterprise system was that the data ware house setup was robust and the information stored was consistent and also the idea of benchmarking data and watch up indicators for the executive facing system helped bring value to the company and lastly the company adopted a model to make sure that all the executives are contributing and using the system effectively.

References: Management Information Systems: Managing the Digital Firm (13th Ed.). Laudon & Laudon, J. P. Prentice Hall.
How Honam Petrochemical Delivered Better Executive-Level Reports, SAP Insider, Dave Hannon, 2011
SAP BusinessObjects Business Intelligence Suite, SAP Help Portal - http://help.sap.com/bowebi#section1
SAP BusinessObjects Dashboards, SAP Help Portal - http://help.sap.com/bodash

Date: February 26th, 2015

1. List and describe the information requirements of Honam’s new management system. What problems was the new system designed to solve?
Honam Petrochemicals had operations throughout Asia and overseas branches located in Moscow, New York, Shanghai, Beijing etc. The company had also set sights at becoming the top chemical company in Asia and generate a revenue of $10 billion. This required the senior executives in the company to make business critical decisions. However there were a few problems with the existing reports that were being generated for the executives. The main information requirements of Honam’s new management system can be summarized as below:
Information requirement
Problems to solve for the new system
Reliable reporting system
Honam need the generated reports to accurately measure the performance of the management and provide useful accurate information for reducing costs and increasing productivity.
Unsanitized data
The executives at Honam wanted to see the raw data before it was processed by different departments and possibly manipulated. The executives wanted accurate data for taking critical business decisions.
Fast Reports
The management did not want to send the staff on data excursions and have the requested reports presented after a considerable amount of time by when the data would have become stale. Instead the executives wanted the system to generate data as a when requested and also anywhere i.e., either on mobile platforms or on desktops.
Enterprise-wide visibility
Since the company was growing geographically, The management wanted the data to be made
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visible across the organization so that the decisions taken could include factors from even the smallest part of the organizations.
Personalized delivery of information
The IT system allowed for differentiation of information for consumers, operation management and executives by creating custom dashboards
Measurable watch-up indicators across all business areas:
Honam emphasized on benchmarking the data before designing the executive facing system. This increases business competitiveness and increased use of technology.

2. To what extent were “people” problems affecting management decision making at Honam? What were some of the people, organization, and technology issues that had to be addressed by the new system? How did the system’s designers make the system more “people-friendly?”

With the existing enterprise system at Honam there were issues on how the reports were being presented. Below were some of the major people problem at Honam prior to the new enterprise system.
1. The senior management did not receive an unsanitized copy of the reports because the managers of each individual departments sanitized the reports to make it look better than it actually was. This caused inconsistencies in the reports and the decisions that the management took.
2. The senior management in turn needed raw data to be available without any data manipulation and also needed access to the relevant information and filter all the unnecessary information.
3. The management needed the reports to be current and also they needed it to have good watch up indicators and also needed the report to be reliable. A delayed report and inaccurate report often caused issues while taking decisions.
The major items that the new enterprise system addressed are as below:
1. The senior management now had access to data which was not manipulated and provided the management with real performance and operational reports.
2. The new system also addressed the issue with stale data, the new system was faster and reports could be pulled daily, weekly or monthly and the executives had access to the reports anytime and anywhere (Mobiles and desktops).
3. The new reports were introduced to all the employees and the ease of use was an advantage since it required minimal training.
4. The watch up indicators were benchmarked before designing the system thus enhance competitiveness and make valuable decisions.
The IT team gathered a lot of inputs from the executives and employees to make the system more people friendly. Below are some of the items that were addressed:
1. The designers asked the executives to list the reports that gives the most value and also gathered feedback on the reports to eliminate unnecessary data and redundant reports.
2. The executives were consulted and asked if there were any additional report that the new system should generate so that it brings value to the organization.
3. The reports were very user friendly and required minimum training
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4. The IT group met the employees at various Honam’s plants and educated the users on the benefits of the report and the management runs campaigns to make sure that the report is used effectively enterprise wide.
5. The new system could be accessed anytime and anywhere and this meant that the reports could be generated on mobile devices and desktops.

3. What role did end users play in developing Honam’s new system? How did the project team make sure users were involved? What would have happened to the project if they had not done this?
After choosing the new enterprise system, The IT team wanted to get feedback from the executives on the data that potentially help make good business decisions. The executives listed out the existing reports that they received and the usefulness of each of these reports after which a truncate list of the useful reports was created. The executives were then asked if they needed any new or supplemental reports that could help them making good business decisions. These inputs were then carried over while creating dashboards and the right set of reports.
Since the tool was for the executive level users, the training was unique and instead of the regular top down training approach, the strategy was to drive the benefits of this new system. The IT team visited the manufacturing plans and had in depth discussions with the users on how the system would benefit them and also on how to effectively use the tool. Apart from the management also emphasized on benchmarking the watch up indicators which helped the managers to be more competitive and also was aware of the peers in the market. Apart from this the management is keenly running campaigns to make sure that all the users are effectively using the system and contributing to the system.
There has been several issues before implementation of the new enterprise strategy. The important ones being:
1. The executives were receiving manipulated and inaccurate information with which would impact decision making impartially.
2. The executives were unable to access the reports when needed and had to often send teams on data excursions and this exercise took a while during which time the data was stale and often not current and would critical decision making
3. There was an absence of reliable data to the dashboard accessed by the senior management.
4. There was a lot of unnecessary reports being processed and this caused an information overload and often hindered the decision making process.
Management Information Systems: Managing the Digital Firm (13th Ed.). Laudon & Laudon, J. P. Prentice Hall.
How Honam Petrochemical Delivered Better Executive-Level Reports, SAP Insider, Dave Hannon, 2011

4. Describe the importance of business intelligence and report generation for Honam Petrochemical.

Honam Petrochemicals founded in 1976 is headquartered in Seoul, South Korea and has operations in overseas locations such as Beijing, Hong Kong, Moscow, New York etc. and has about nine affiliate companies based mostly in Asian countries and UK. To manage the operations across these different locations Honam needed a reliable business intelligence and reporting tools which could provide accurate and reliable information on the performance and provide the management with greater insight into the operating costs and sales which could potentially help them make critical business decisions to lower the cost and increase the efficiency. However the reporting tool used by Honam was often generated by independent managers for their departments and the data presented to the top management was always manipulated to show the departments in good light. Another important challenge the executives at
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Honam faced was the inadequate information being processed and the information processed was always sanitized and the executives did not have access to the raw data. This information processing and report generation took longer than usual because of the processing involved and the executives often looked at the last quarter reports to make decisions instead of the current numbers. The stale data presented to the employees impacted the decision making for Honam’s top executives.
The most important requirements for Honam’s executives were access to unsanitized data which did not involve any manipulation and also timely access to raw data from which reliable and accurate reports could be generated. This would give them a real time view of the company’s performance and numbers. The executives also wanted to focus mostly on the critical watch up indicators instead of unnecessary information. These watch up indicators provided them with the information on crucial parameters which could help drive business decisions. Apart from they wanted a solution using which the reports could be generated daily, weekly or monthly and these reports should be accessible from mobile platforms and provide up to the minute updates. Another approach that Honam’s executives pursued was to have custom dashboards at different levels of the business mainly by creating tactical dashboards for employees, Operational dashboards for finance and operation management and a strategic dashboard for the top management. The IT team discussed these requirements with the management and removed redundant and unnecessary reports and added any additional reports which could help the executives and then implemented SAP BusinessObjects Dashboards based on SAP's BusinessObjects intelligence platform to extract data from the SAP NetWeaver Business Warehouse and create dashboards to present the employees a powerful analytic reporting dashboards for decision making.
These changes were implemented and the employees started using the software immediately. They had access to the reports on demand and also it helped the executives track manufacturing cost, inventory rates, production costs, global trends etc. The new Enterprise tool has helped the company reduce the time in making critical decisions and also have anytime anywhere access to the reports and the time spent in collating and gathering data is reduced considerably. The executives are no longer presented with stale and sanitized data impacting decision making. Benchmarking of the watch up indicators has promoted competitiveness and also keeps the managers in the know how on the latest trending technologies and market advantages of their peers.

References: Management Information Systems: Managing the Digital Firm (13th Ed.). Laudon & Laudon, J. P. Prentice Hall.
How Honam Petrochemical Delivered Better Executive-Level Reports, SAP Insider, Dave Hannon, 2011
SAP BusinessObjects Business Intelligence Suite, SAP Help Portal - http://help.sap.com/bowebi#section1
SAP BusinessObjects Dashboards, SAP Help Portal - http://help.sap.com/bodash