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Midmarket CIOs have analytics on the brain
- — 11 June, 2011 03:59
Implementing business analytics has risen to the top of midmarket CIOs' to-do lists, according to a new IBM study announced Friday during an event in Waltham, Massachusetts.
Eighty-three percent of midmarket CIO respondents named analytics as their top priority for investments, according to the study.
Within the broader category of analytics, 64 percent of midmarket CIOs said they are using data warehousing platforms and visual dashboards. Another 63 percent are using MDM (master data management). Master data refers to information entities, such as specific product or supplier names, which are supposed to be consistent across a number of systems and applications within a company.
IBM interviewed more than 3,000 CIOs in recent months for the study, with 622 coming from midsized companies, which IBM defines as those with between 100 and 1,000 employees.
The study's findings reflect the fact that analytics software sales remained strong in recent years, despite the global economic downturn, as companies look to find insights from their data that can result in savings and competitive advantage.
While IBM targets large enterprises with its Cognos BI (business intelligence) and other products, the company has also rolled out specialized packages for smaller companies as well, such as Cognos Express.
Despite the apparently strong interest midmarket companies have in adopting analytics, a good number remain in the early stages of the game, according to one observer.
"Too many [midsized] businesses' ideas for slicing data don't get far past the pie-chart level," said analyst Curt Monash of Monash Research. "'Big data' isn't even the issue for them; they could get much more value than they do now just from personal-sized data sets."
That's not the case with Northeast pizza chain Papa Gino's, which is using IBM analytics software to crunch business data in many ways, said Martha Lieber, director of business systems for the 280-restaurant company, which also includes a number of D'Angelo sandwich shops.
This work has resulted in some delicious insights, such as the fact that when gas prices rise, pizza sales drop, Lieber said during a panel discussion at the event. Armed with this knowledge, Papa Gino's can make adjustments, such as running a special promotion when fuel prices soar.
Papa Gino's also discovered that while its workers were quoting delivery times of 45 minutes, pizzas were actually arriving at customers' homes in about a half-hour, she said.
"So it was a pretty apparent business decision to adjust what we were promising. We like the idea of re-setting expectations with our guests," she said.
Analytics are a big part of the chain's customer rewards program as well, with different promotions aimed at customers depending on how frequently they order.
The chain is also using analytics to compare store-to-store performance and scrutinize labor and food costs.
In addition, Papa Gino's has taken steps to ensure analytics are placed in the right employees' hands.
The chain has a number of district managers who are constantly out in the field and need data to do their jobs effectively, Lieber said. They are now receiving daily one-page reports that give them "very pertinent information about sales and labor," she said. "If they had a big Excel spreadsheet with all their data on it, they would use it. But that's not that productive."
Papa Gino's is also looking at developing an iPad application for managers, she said.
It was crucial for Papa Gino's to work with systems integrator QueBIT on the project, she said. "Having a strong partner ended up being very important," she said. "We simply don't have the expertise or visibility into everything that's out there. Frequently, the tools out there are very similar; it's difficult to distinguish the best choice. It's not always cost, although cost does play a part."
Papa Gino's weighed a number of other products, including Oracle Hyperion and SAP Business Objects, before settling on IBM, Lieber said in an interview after the discussion.
"We didn't see it so much as getting a return on investment as we did as a cost of doing business," Lieber said. "It gives us a lot of visibility that helps us keep costs down."
While Papa Gino's is getting good results already, it has only just started tapping the potential of analytics, according to Lieber. "The more data we have, the more we want more data," she said during the panel talk.
Overall, analytics are giving the chain an edge it needs, according to Lieber.
"The pizza business is very competitive," she said. "A lot of local mom-and-pops can be flexible and react to their neighborhoods. We have to be very nimble. We're also competing with larger brands."
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com