In the US, the construction industry is languishing, but one of the first people to know when the upswing comes will be Andrew Davis, managing director of British Distribution (BSD). His electronic surveillance system is on constant look-out for the earliest signs of recovery. The moment they appear, his desk-top screen in London will alert him to launch an attack.
Davis has used his EIS to create a vast up-to-the-minute databank of market intelligence. Its knowledge is constantly updated by his network of managers round the world who input their observations on local prices for all the products in BSD's market. 'It's judgmental stuff, but their guess is a lot better than mine sitting in London. We can use it to spot opportunities by tracking where prices are moving up or down. The US is one of the worst places for steel at the moment, but when the upswing comes, we'll be there.'
BSD, whose annual sales are around £1 billion, was formed in April 1989 in the wake of British Steel's privatisation. It was an amalgamation of the group's distribution operations, and the EIS was conceived to spearhead the company's new marketing-led approach. 'We used to compile this type of intelligence before, but it was not well-structured. The fact that we developed it within the EIS forced us to organise it properly, so now it is far more useful,' Davis says.
The EIS has also streamlined BSD's financial accounting. 'Previously the separate operations used different methods of reporting even such basic figures as profits or scrap losses. This made it virtually impossible to draw meaningful comparisons,' says Davis. Implementing the EIS forced all monthly accounting procedures across the division to be structured according to a common platform. For the first time divisional bosses can compare their performance with each other. 'They can find out what their colleagues are doing better, and learn from them,' Davis says.
But the most potent weapon in Davis's EIS armoury is competitive intelligence. At the touch of a button, he can view an analysis of the steel distribution industry in Europe, identifying which companies are in the market, who owns them, their product ranges and their major customers. It is culled from public sources such as the Press and company reports, combined with information passed back by BSD's salesmen in the field. Davis uses it to ask questions such as 'Who's doing what in the French flat rolled steel business?' It also provides an extensive analysis of BSD's market share, and an assessment of the quality performance of suppliers including reject rates.
Davis reckons the first major benefit of the EIS was in forcing him to think through the critical factors in the success of the business, and the performance indicators that would show whether or not they were being achieved. These days he finds the system a great asset at internal reviews and board meetings. 'It enables us to give slick presentations which rapidly show the trends, problem areas and comparisons between different bits of the organisation.'
But he is conscious of the dangers of EIS. Individual managers, accustomed to getting on with their jobs without interference can suddenly find their every move under the spotlight. Even Davis prefers to keep the main board at arm's length. 'I would be very wary about giving board members unlimited access so that they could look over my shoulder.' Nor does he pry too closely into the day-to-day business of his managers. 'I sure as hell don't want to know what is going on in every branch. I just want a broad overview, and to know that the major sectors are healthy.'
While a powerful advocate of IT, he is no technofreak. 'Technologists have a great way of surrounding themselves in gobbledegook. When people start talking about software packages or hardware manufacturers, I just switch off. I don't even know who made the terminal on my desk.' He peers at the monitor. 'According to the label, it is IBM.'