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Business Intelligence in the Consumer Packaged Goods Industry

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Presentation on theme: "Business Intelligence in the Consumer Packaged Goods Industry"— Presentation transcript:

1 Business Intelligence in the Consumer Packaged Goods Industry

2 Business Intelligence Market
Global Business Intelligence Market The worldwide market for business intelligence (BI) software is forecasted to grow 9.7% to reach US $10.8 billion in 2011, according to Gartner’s latest enterprise software forecast. Gartner expects the market for BI platforms to remain one of the fastest growing software markets despite sluggish economic growth in most regions. BI ranked fifth on the list of the top 10 technology priorities for chief information officers (CIOs) in 2011, according to Gartner's annual global CIO survey, 2011. Gartner has identified three major demand-side factors that continue to expand use and drive BI platform revenue growth: Consumerization of BI: BI tools must be simple and mobile in order to expand use and value. The need for more intuitive and interactive BI tools extends to users on the go, but the majority of organizations have to embrace mobile BI. Support for Extreme Data Performance; Emerging Data Sources: Capabilities that enable the analysis of large, volatile and diverse data will open up possibilities for a broad range of new, high-value BI applications driving further growth. BI as a Decision Platform: “Improved decision making" is the top driver of BI purchases. Capabilities that will evolve BI from an information delivery system to a decision platform will increase the value of BI and drive its growth. Worldwide Business Intelligence Tools Revenue & Growth, Worldwide Business Intelligence Tools Revenue by Segment, Source: IDC, May 2011 The BI tools market grew 11.4% in 2010 compared with the 2% revised growth for In 2010, the BI tools market reached $8.9 billion in software license and maintenance revenue (including subscription revenue). The top five vendors in 2010 based on worldwide revenue were SAP, IBM, SAS, Oracle and Microsoft, accounting for 64.9% of the market total. Source:

3 Consumer Packaged Goods Industry
Trends The consumer packaged goods (CPG) industry showed signs of rebound in 2010, with gains coming across a range of channels, departments and categories. At a high level, the CPG industry posted a flat year in 2010, with unit sales slipping slightly (-0.3%) and dollar sales inching up by the same amount. The drug channel demonstrated strong performance across a majority of CPG departments in 2010 where unit sales climbed 1.3% in 2010. Noteworthy gains were achieved in food and beverage-related departments also; however, the beauty and personal care department did not fare as well. The U.S. Department of Agriculture (USDA) estimated that food-at-home prices will increase 2%-3%, a rate which outpaces the average index of consumer prices. Competition for share of grocery spending is expected to intensify as CPG retailers continue to evolve their assortment, pricing and promotion strategies. The ability of consumer goods manufacturers to achieve and sustain profitability will be challenging as the costs of energy, raw materials and other necessary resources are expected to rise. Total CPG Growth Trends Source:

4 Business Intelligence in the CPG Industry
Many organizations in the consumer packaged goods (CPG) industry are experiencing a tradeoff between the benefit of high product volume sales coming at the expense of extreme data complexity. At the same time, these companies struggle to maintain open lines of communication with their retail customers and distributors in order to better manage the upstream flow of product. Many CPG organizations are gravitating towards BI tools to help create those supply chain linkages and deliver product more efficiently. Aberdeen’s April 2009 Benchmark Report, “Moving Past Spreadsheets: What You Need to Know about BI Deployment Strategies” demonstrated that 40% of companies in the CPG industry are driven towards BI technology in order to address their need to improve speed of access to relevant business data. This Aberdeen Sector Insight Report gives a detailed analysis of the benefits of implementing business intelligence in the consumer packaged goods sector Driving Better Customer Service with BI Value of Timely Information With clean, relevant and timely information, the CPG companies are able to address customer issues in a shorter time frame, ultimately leading to a higher degree of customer satisfaction and retention. The ability to access information faster and make quicker decisions based on such information by way of intelligent reports is a key benefit in several areas of the business, including customer service. CPG companies recognize the need for customer visibility and have proficiently leveraged BI tools to help understand, instill retention practices, and grow their customer base. CPG companies have been successful in leveraging BI to drive marked enhancements in several areas of customer service Source: Aberdeen Group Report on BI for the CPG Industry, 2009

5 Business Intelligence in the CPG Industry
Faster Information, Better Decisions From a business perspective, what sets CPG companies apart from other industries and enables heightened customer service is their ability to find information quicker and make more timely decisions. Aberdeen's March 2008 Benchmark Report, “Data Management for Business Intelligence” revealed that companies of all shapes and sizes are struggling to manage an average of 15 unique data sources, leading to incorrect information delivered to the respective people working out company strategies. BI tools offer the ability to shift through mountains of data in order to find the one type of information that will aid in decision making. CPG Industry Uses BI for Quicker Information Access Companies in the CPG industry have been successful in leveraging BI for reduced time-to-information and time-to-decision Foundation of Organizational Maturity Companies need to have a wide portfolio of technical capabilities to help capture, assemble and deliver the right information to the right people at the right time. The defined BI skill sets help ensure that the data is accurate and more relevant to the appropriate stakeholder. CPG companies consume an overwhelming number of reports on a regular basis. The ability to automate the generation and delivery of these reports allows companies to free up IT resources while at the same time delivering and making valuable information pervasive to the business users across the enterprise. Key Organizational Capabilities for BI Management Source: Aberdeen Group Report on BI for the CPG Industry, 2009

6 Business Intelligence in the CPG Industry
Beyond the IT Department The most notable trend emerging from fact-based data is the push to bring BI and analytical visibility into the minds of non- technical line-of-business (LOB) managers. On a surface level, many think of BI as a strategic tool for planning, budgeting and forecasting, largely residing in the financial department; others may view BI as a tactical tool for real-time visibility into business information. The simple fact is that BI tools have grown in business applicability and improved in ease-of-use, cultivating an environment in which just about any business function from HR to procurement can find value in BI. The best-in-class companies were more likely to deliver BI to more roles within the organization as well as more LOBs across the company. Best-in-Class Deliver BI to More Lines-of-Business The concept of pervasive BI is becoming a priority for more organizations across many industries, but the tie-in with the CPG world becomes evident when considering the importance and associated fragility of CPG – retail relationships. Source: Aberdeen Group Report on BI for the CPG Industry, 2009

7 Case Study: Global Consumer Products Company
About the Company Problem The company is a leading global consumer products company with over $9 billion in annual revenue. The company launches campaigns in various formats to promote offers on its products across global markets. The company wanted to accurately assess, measure and monitor sales performance on the agreed upon critical factors for success (CSFs). There were no subject matter experts for sales organization and understanding the business model and technology behind the company’s vast enterprise data warehouse development, without adequate documentation available. Multi-site, multi-lingual implementation was required, as the solution was to be implemented across multiple countries and also in several local languages for each country. There was a need for a solution to accommodate parallel processing for multiple markets and deal with constraints like limited-load window and load performance Various legacy owners situated in different countries needed to be familiarized with the project needs of the new solution and the solution needed to be customized according to their systems and requirements. The solution to be implemented had to accommodate the multiple, yet valid, business rules of different countries. The company’s systems also did not have the latest version of the software available. Need for the Solution The company needed a solution to: Enable direct selling excellence transformation as a strategic driver to achieve business targets Enable sales performance best practices to be more effectively and efficiently shared across all countries Implement and ensure consistent business processes across all geographical markets Manage the performance of all field sales stakeholders by providing actionable CSFs and measure effectiveness across the key success factors Deliver accurate CSFs with flexibility for analysis at all levels of the operating model and performance reporting through print, online and

8 Case Study: Global Consumer Products Company
Solution Global Consumer Products Company was chosen for delivering and managing business-critical applications from its US and global delivery centers Global Consumer Products Company came up with the complete design of the BI solution, consisting of: Assistance in requirements gathering Extract, transform and load (ETL) strategy, design and development The online reporting solution using Microstrategy platform and offline printed reports solution using Java platform The solution was developed to: Collect the feeds from various legacy systems Apply the agreed upon universal CSFs Deliver online reports and pre-generated reports and and print reports Perform full extracts of various data streams identified that included reference data, representative data and various sales data received from the legacy systems on a daily basis

9 Case Study: Global Consumer Products Company
Process of Implementing the Solution With extensive experience in managing outsourced projects, Global Consumer Products Company implemented an on-site, offshore model which enabled the company to capitalize on time zone differences and reduce the delivery time: Global Consumer Products Company associates deployed to the company site gathered the existing business knowledge, understood new requirements and communicated to the offshore team of all the activities required onsite. The roles and responsibilities of the onsite and offshore team were documented and strictly adhered to. The process was featured by a well-defined communication process, efficient risk management, and issues and resolution management. Global Consumer Products Company decided to take the typical waterfall model with occasional prototyping whenever necessary. The activities involved included: With Global Consumer Products Company’s business intelligence expertise, the company standardized most of the system development life cycle (SDLC) processes and rewrote them to suit the unique needs of the BI projects, which resulted in a robust delivery model backed by a strong process library. Global Consumer Products Company has been involved in the complete BI solution, ranging from technical specifications to user acceptance testing, covering most of the SDLC process. The project was delivered on a turn-key basis, beginning with requirements management and design and development through completion and ongoing maintenance. The process involved: Requirements management Functional and technical specifications development and construction Testing (unit, QA, and UAT) Ongoing application maintenance and production support

10 Case Study: Global Consumer Products Company
Benefits Cost Benefits The solution has minimized the need of manual efforts in collecting data from various report sources. The solution provides a consolidated view of information across all countries in which the company operates and eliminates the need for manual processing, thereby lowering administration cost and the decision-making cycle and errors that manual processes are prone to. Due to an efficient design of the application to process the data arriving from multiple markets in parallel, there was a reduction in the load window of nearly 50%. There was a significant decrease in the turnaround time to market and lead to a reduction in human resources of about 30%. The market implementation time and the manpower cost was also reduced by 25%. There was a decrease in the turnaround time of the project by 40%. Participation in Global Implementation The solution enabled printing of reports in multiple languages. The solution was made flexible to accommodate customization and localization requirements from each country. The solution has been implemented in the majority of countries within the stringent timelines and budget. Butler Decision Making The solution enables the company to view, manage and analyze the performance of its sales stakeholders, at all levels, as per defined CSFs. The company’s leadership best practices have been effectively and efficiently shared across all countries. Improved Company Focus The solution has enabled the company to focus on its core business and on building more efficient systems for its business.

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