Ukraine's Fozzy Group Saves on Licensing As Deploys Data Warehouse with EAP Program

• Access to business information in real time
• Business process optimization
• Transparent monitoring
• Cost optimization

Situation

With more than 300 retail stores, Fozzy Group is one of the largest retailers in Ukraine, which is the second largest nation in Eastern Europe. While best known for its chains of supermarkets, wholesale food stores, pharmacies, and related operations, Fozzy Group also owns canneries, poultry farms, restaurants and other businesses.

The company has long seen the importance of using business intelligence (BI) to guide decision making across its geographically dispersed retail and wholesale operations. Fozzy Group was an early adopter of BI, collecting point-of-sale (POS) information from cash registers throughout its operations. However, the solution had evolved over a period of time and involved a heterogeneous collection of applications and systems.

While POS information was immediately transferred from cash registers to a database, information from the database was transferred to the analytics solution only once a day. Overall, data collection took place in several stages, and each step—given the heterogeneity of applications, as well as the imperfection of the network because of periodic power failures within Ukraine—added to the difficulty of acquiring the complete, accurate, and timely body of information the company required for BI analytics.

Processing delays, coupled with inaccuracies that could be introduced at different stages of data accumulation and processing, meant that the company’s IT Group wasn’t satisfied with the BI it wanted to provide to help employees quickly track sales trends, identify patterns for purchasing, analyze logistics, and optimize control of the supply of goods between warehouses and stores.

As Fozzy Group has grown in recent years, its IT organization wanted to enhance the speed and accuracy with which it could collect and analyze BI information. Additionally the IT organization wanted to create a more flexible infrastructure to better meet new business needs such as supporting frequent-shopper reward programs. The challenge for the IT organization was to select the best technology platform for creating its enhanced BI infrastructure.

"The cash registers transmit 4.5 million lines of information daily, and it is essential that none of this data is lost,” says Yuri Gorgo, Vice President of IT and Logistics at Fozzy Group. “When selecting a supplier of technology, we paid particular attention to performance and reliability of the system because we wanted to ensure the integrity and availability of information. We were also interested to find a low total cost of ownership, including hardware requirements.”

Solution

Fozzy Group considered BI data warehouse solutions from a number of vendors, including IBM, Microsoft, Oracle, SAS, and Teradata. Backed by the positive experience Fozzy Group had found using Microsoft products elsewhere in its organization, the company elected to create its new BI data warehouse solution using Microsoft SQL Server 2008 R2 and other elements of the Microsoft Application Platform.

“We determined that a data warehouse created using the Microsoft Application Platform would fully satisfy our requirements,” says Maxim Schedrivy, IT Architect at Fozzy Group. “Comparing the BI solution with those we could create using a number of specialized companies, we found that the Microsoft Application Platform provided the best price/quality ratio.”

Having defined the infrastructure for their new BI data warehouse, Fozzy Group saw the next step as licensing the technology, and was happy to take advantage of the Microsoft Volume Licensing Enrollment for Application Platform (EAP) program. EAP is a flexible multi-year agreement that allows an organization to deploy as many licenses of selected software as it needs for a set yearly fee.

The EAP program provides a simplified licensing solution that helps accelerate deployment and reduce operational costs. EAP allows Fozzy Group to accelerate deployment and maximize the value and ROI of its BI infrastructure. The BI solution deployed includes a number of Microsoft products, including Windows Server 2008 R2 Enterprise, Microsoft SQL Server 2008 R2 Enterprise, Microsoft System Center Configuration Manager 2007, Microsoft System Center Operations Manager 2007, Microsoft Project Server, and Microsoft SharePoint Server 2008.

"The EAP program has allowed us the most flexible and advantageous means to solve the problem of purchasing the necessary licenses,” says Ivan Slavioglo, Chief Information Officer at Fozzy Group. “Using the Microsoft EAP program, we are able to use Microsoft software products for deployment on new and existing systems at a lower price. Savings on licenses in our case was 40 percent.”

Pilot Projects

Prior to deploying its production BI data warehouse, the Fozzy Group IT organization conducted a series of pilot projects and hardware upgrades. One pilot project included working with the Service Broker feature of SQL Server 2008, a feature that enables internal or external processes to send and receive guaranteed, asynchronous messages by using extensions to Transact-SQL.

Pilot projects also involved loading data into a nonproduction data warehouse and running verification tests. Microsoft specialists were invited to help Fozzy with SQL Server set up and tuning. As part of the extended testing, Fozzy Group ran its new BI data warehouse in parallel with its old BI solution for several weeks, collecting data and calculating peak loads. During this time statistics were collected, including identification of peak loads on the system. After tuning, the system worked with maximal performance.

"We had no doubt that we need a data warehouse as a means to optimize business processes and to gain a powerful competitive advantage,” says Gorgo. “However, our company makes very high demands and requires enterprise-class IT solutions. Therefore, before launching the system into commercial operation, we tested it thoroughly. We needed to verify how effective SQL Server 2008 could be when dealing with our 4 terabytes of data.”

Under the pilot, Fozzy Group launched the new BI system in several stores, tested its performance, and analyzed sales results. “We were fully satisfied with the pilot study results,” Gorgo says. “The pilot found that data was processed more than three times faster, despite the fact we were doing this in parallel with our other operations at the store, and not in an overnight batch job as before. After completion of the test operations, the system was extended to all of our stores.”

The solution includes use of SQL Server 2008 Reporting Services and SQL Server 2008 Analysis Services for creation of reports and analytics for business users.

"The reports and analytics have become for me almost as routine to work with and as necessary as e-mail,” says Mikhail Dudnik, Vice President of Marketing at Fozzy Group. “I can instantly receive a report of interest in any form, without having to ask the help of analysts. This is invaluable in situations where you want to make quick decisions based on timely and correct information."

Architectural Notes

The Fozzy Group BI data warehouse architecture includes:

• Database. The BI data warehouse, with 4 terabytes of information, is hosted on a single instance of SQL Server 2008 R2 Enterprise (64-bit), running on Windows Server 2008 R2 Enterprise for 64-Bit Systems. The data warehouse is deployed on an IBM System x3850 server with four processors.
• Storage. Storage for the BI data warehouse is hosted on a Hitachi Universal Storage Platform V system.
• Reporting. SQL Server 2008 Reporting Services is used to create recurring reports for business users.
• Analytics. SQL Server 2008 Analysis Services is used for creating multidimensional data cubes for faster analytics.
• Presentation. Fozzy Group created a custom application for business users that brings together information generated by Reporting Services and Analysis Services.
• Monitoring. Microsoft System Center Operations Manager 2007 simplifies centralized administration. Fozzy Group uses System Center to provide a single-screen view into the more than 300 servers the company has deployed across Ukraine. Fozzy uses Microsoft System Center configuration Manager 2007 for server management.

"The new BI data warehouse solution is a highly scalable system that copes with large loads,” Gorgo says. “We want to make this a single source of data for all enterprise applications."

Benefits

By creating its BI data warehouse using the Microsoft Application Platform, and taking advantage of the Microsoft EAP program, Fozzy Group has enjoyed a number of benefits, including gaining access to business information in real time, business process optimization, transparent monitoring, and cost optimization.

Access to Business Information in Real Time

The new BI data warehouse created using the Microsoft Application Platform provides Fozzy Group with virtually instant access to information. As soon as the cashier punches in the bill, information about the sale goes to a central repository instantly, ready for processing and analysis, compared to the once-a-day processing of the company’s earlier solution.

“Achieving leadership in the retail market requires managing information to improve efficiency and quality of work,” says Vyacheslav Artamonov, Director of the Corporate Customers and Partners group of Microsoft Ukraine. “Analytical information is beneficial only when it is received in a timely manner, without delay and in the right amount. We are pleased that Microsoft solutions satisfy the requirements for speed and reliability of processing large volumes of data, and remain optimal in terms of total cost of ownership."

Fozzy Group likes the real-time analytics as well as the stable message management gained through use of Service Broker.

"Our data warehouse and business intelligence solution, based on Microsoft SQL Server 2008, are just tools,” Dudnik says. “But through the effective use of these tools we’ve been able to reach a new level of operational activity, and provide better service for our customers. Information from the database store is transferred to the message dispatcher in real time with guaranteed delivery. Our enterprise-class solution supports real-time interactions that enable offering customer loyalty programs at the point of sale.”

Business Process Optimization

The ability to access relevant information at any time from the BI data warehouse has enabled Fozzy Group to optimize a number of business processes, including the creation of centralized orders to more efficiently manage product remnants in a distribution warehouse, and to increase the turnover of goods and improve availability within the stores.

"We have significantly optimized the delivery of goods in our supermarkets,” Gorgo says. “Since implementing the BI data warehouse, we are not afraid to experiment with new ways of distribution and product delivery to the stores.”

Fozzy Group credits the real-time information from its BI data warehouse with helping it more efficiently deal with milk and other perishable products. Gorgo notes: “Our data warehouse has given us the information we need to prevent problems with product expiration dates.”

Transparent Monitoring

The BI data warehouse enables Fozzy Group to better track trends and monitor the availability of goods on the shelves. “The BI data warehouse supports transparent monitoring,” Gorgo says. “If monitoring two stores with similar locations and demographics, for example, shows that sales in one store are slumping, you can check to see if the store with slowing sales actually has the right product mix on the shelves. This kind of information makes it possible to detect problems early and take corrective actions to restore inventory and sales. With the previous systems this just wasn’t practical because of the delay in getting information.”

Cost Optimization

Deploying its BI data warehouse based on Microsoft SQL Server 2008 not only gave Fozzy Group a competitive advantage, but allowed the company to optimize IT costs. Fozzy Group credits the Microsoft Application Platform with savings in the cost of hardware. And the company credits the EAP program with reducing the cost of licensing while providing Fozzy Group with the licensing flexibility it needs to experiment with different deployments.

Summary

In summary, Fozzy Group was able to create the enterprise-class BI data warehouse it needed by using SQL Server 2008 R2 and other elements of the Microsoft Application Platform, while saving costs and simplifying licensing through participation in the Microsoft EAP program.

Microsoft SQL Server 2008 R2

Microsoft SQL Server 2008 R2 delivers higher scalability for mission-critical environments, more efficient IT, and expanded reporting and analytics through self-service business intelligence.

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