P&G Investing in Big Data Analytics

| March 6, 2012

P&G Investing in Big Data Analytics, Dan Gatti Big Data I/O Forum

Procter & Gamble CIO Filippo Passerini says he plans to increase fourfold the number of company staff with expertise in business analytics.

Passerini is building that expertise at a time when P&G is cutting costs in other areas, including eliminating 1,600 nonmanufacturing jobs. The company’s IT organization itself has cut $900 million in total spending over the past nine years.

Passerini is investing in analytics expertise because the model for using data to run a company is changing. The old IT model was to figure out which reports people wanted, capture the data, and deliver it to the key people weeks or days after the fact. “That model is an obsolete model,” he says.

The new model Passerini envisions is something of a virtual, instant-on war room, where people huddle in person or by video around the needed data, pulling in the right experts to fix a problem the moment it arises. This decision-making environment requires better collaboration via easy-to-use video, more real-time data, and business analytics expertise. It might not sound revolutionary in concept. But listen to the details, as I did in a recent discussion with Passerini at P&G’s Cincinnati headquarters, and it’s clear how far this new strategy is from where we’ve been.

One building block is high-quality videoconferencing, because people solve hard problems faster and better when they can see one another, Passerini maintains. P&G has been an avid user for several years of room-sized Cisco telepresence systems. The video is used as part of a collaboration environment P&G calls Business Sphere, which CEO Bob McDonald and his executive council use to collaborate with colleagues worldwide. It combines video with large screens that display data visualizations on sales, market share, ad spending and the like, so everyone in the meeting is seeing the same information. In the past year, P&G added 50 smaller Business Sphere systems around the world, giving more people access to the technology.

Passerini’s team is working on a video platform that broadens access even more by letting people join in regardless of the video system they’re using, whether it’s Cisco telepresence or WebEx or FaceTime. That would mean a key team member can video in from an iPad, Droid smartphone, or PC if need be.

In terms of data, this strategy needs the right real-time data. What’s real time? The goal P&G’s working toward is that as soon as data is collected, it’s available for use, Passerini says. P&G isn’t after new data types; it still wants to share and analyze point-of-sale, inventory, ad spending, and shipment data. What’s new is the higher frequency and speed at which P&G gets that data, and the finer granularity. Passerini says P&G has about two-thirds of the real-time data it needs.

Passerini talks about the what, why, and how of a problem. “What” is the problem itself — is market share stable or has it shrunk two points? He thinks P&G has beaten the what problem by giving 58,000 employees business intelligence “cockpits,” which are dashboards that link to common data sources so people spend little time arguing over whose data to use.

“Why” is the cause of a problem — was it a bad TV ad, out-of-stock shelves, or a competitor’s new product or price cut that caused a problem? Right now, the P&G IT team is working on automating analysis of the why, so employees get alerts when key events like a supply chain snafu or rival product launch happen.

If P&G can eliminate “what” discussions and some of the “why,” and decision-makers can jump right to how to solve a problem, “that radically increases the pace at which they do business,” Passerini says.

The final piece is bringing in that business analytics expertise. These are people “at the intersection of business and IT,” Passerini says. They need to be as well versed in P&G business issues as a marketing pro. And they need to be skilled in finding information, building data models, and creating simulations.

For example, when CEO Bob McDonald and his executive committee meet each Monday, one data slice they look at is the “top 50”–combinations of products and country markets (Brazil hair care, perhaps, or U.S. pet care) that are the company’s 50 largest, making up about 60% of sales. Data visualizations show at a glance if sales or share are moving materially.

If they are, and executives want to drill down, Jeffrey Goldman is the business analyst in that key meeting who delivers those insights, delivering analysis in real time on screens that all the executives see. Is a sales dip in detergent in France because of one retailer, so that’s where to focus? Is that retailer buying less only in France, or across Europe? Did P&G cut promotions or raise prices, letting a rival grab share, or is the category overall losing sales? Goldman delivers this kind of data so executives can decide how to respond.

Passerini pictures analytics experts like Goldman sitting in on more meetings to make sure the “how” to solve problems gets sorted out right then and there, not postponed until everyone gets more information. The old model would mean “let’s get back to this in two weeks,” he says. “You need to be able to answer that question immediately.”

Passerini describes the video and data collaboration efforts, and the role of the busines analysts, as “harmonizing” how people do business across P&G. It’s the opposite of creating standard reports. It’s about creating a standard environment with the right tools, then it’s up to the experts in that room to use whatever data they need to make the right decisions.

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