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BAN120 – Template for Case Analysis Name: Thandava Krishna Mukkamala IDENTIFICATION OF PROBLEM(S) DECISION CRITERIA ANALYSIS ALTERNATIVES DECISION(S)/ RECOMMENDATIONS IMPLEMENTATION Use this template to analyze the case, and then answer the questions on the case posted on blackboard on a separate sheet. 1. Describe the differences between AD’s definition of Business Analytics in the mid-2015 and the current definition of Business Analytics. 2. Given the facts of the case, explain how BA influences business performance? 3.Assuming you were Veronica Du Plessis, how would you prioritize the improvement ideas proposed for the various applications in order to develop the Business Intelligence and Sales Enablement group’s project agenda for 2016 Abstract AllDrinksSoft (ADS), a US-based manufacturer and distributor of non-alcoholic beverages, began its journey into Business Analytics (BA) by developing two performance dashboards: one for its branches and one for its sales staff. By recounting the development and implementation of these two applications, and considering how improvements to them might be prioritized, this case explores ADS’s journey into BA. In so doing, it highlights questions about the meaning of BA, the various ways in which analytics solutions can be designed and implemented, what the stages of BA maturity look like and how organizations might progress along this maturity trajectory. Case This case describes an actual business situation, however, names, places and numbers have been changed in order to preserve the company’s anonymity. The case was developed solely for the basis of class discussion and is not intended to serve as an endorsement, source of primary data, or illustration of effective or ineffective management. Introduction It was June 2015 and IT Director, Veronica Du Plessis, was in the office on a Saturday. She had been out of town all week participating in the annual IT Vision Roadshow. For about 5 weeks, key members of the IT leadership team visited 2–3 field sites a week to introduce new products and ideas, and to gather customer feedback on these. One of the new products being showcased this year was a mobile application for account managers’ iPads. It was called MyPromos and had been developed by the Business Intelligence and Sales Enablement group that Veronica had been leading since 2013. She was eager to get into the field, where she had started her AllDrinksSoft (ADS) IT career in 2007. Reminiscent of her role as a Business Partner, she wanted to glean first-hand insights into users’ reactions to the new app. MyPromos gathered information about account managers’ attempts to sell promotions (e.g., end caps, off-shelf displays, discounted products) into their accounts. This crucial sales activity had never been tracked before. The new data would ultimately provide the marketing department and the sales organization with valuable insights into the effectiveness of promotional offers in different markets. Over time, as data accumulated, this would allow them to target marketing efforts more precisely. Even though the current version of MyPromos focused on data gathering, future versions would provide analytics capable of informing sales and marketing decisions. The reason she had come into the office on the weekend was to work in peace and quiet on her group’s priorities, and plans for 2016. This would be the topic of discussion in her upcoming meeting with her boss and CIO Tyler Fonternel (see IT organization chart in Appendix A). While her group’s application development plate was full until December 2015, she needed to articulate her group’s agenda after that point. There were many competing demands for innovation, and Veronica was keenly aware that she needed to spend IT resources wisely and deliver analytics solutions that positively affected sales growth. Tapping away on her laptop, she began listing what she regarded as objectives for her group, which consisted of only three people (Veronica and two IT managers). They were ultimately responsible for supporting Direct Store Delivery (DSD) with business analytics (BA) solutions. Their current portfolio of applications included MyPromos, MyResults and AMPlify. In trying to formulate and prioritize her group’s objectives, Veronica pondered numerous questions. What did BA really mean? How was this class of technology solution defined at ADS? On the basis of their experience with BA, what did successful BA look like and what were the factors for success? And what might be the steps in a BA maturity model that her group could leverage as they prioritized system development ideas? By answering these questions Veronica hoped to gain a clearer picture of what her group’s application development portfolio for 2016 should look like. AllDrinksSoft (ADS) ADS was a manufacturer and distributor of carbonated soft drinks, juices, teas, mixers and waters in North America. It owned more than 30 brands including MyCola, Lemons& Lime, RootbeerSoda, AquaGalore, FruitPlus, Mr.Veggie and CordialDelight. As its product portfolio crossed multiple categories, ADS had to compete for shelf space across various aisles in a typical retailer (e.g., supermarket, convenience store). In the past decade, ADS had moved into DSD through a series of acquisitions of bottlers, fundamentally changing the business model of its beverage operations. Previously, the business operated as a franchisor: it owned and marketed the brand, manufactured concentrate and sold it to independent bottlers, who then distributed the finished soft drinks to retailers. This was a low-capital, high-margin business, whose key challenge lay in the franchisor’s limited ability to assure the quality of its final product because production, sales and distribution were the domain of third parties. The DSD model represented an almost complete reversal of the franchise model: it entailed a capital-and operations-intensive business (i.e., manufacturing operations, fleet management) with a low-margin and high-volume logic. Small savings accomplished by streamlining operations, for example, had significant implications for the bottom line. Compared with the franchise days, an execution-focused, penny-wise mentality was needed to ensure ADS’s success. Headquartered in Tampa, FL, the US$4billion company employed 12,000 FTEs in 2014. IT at ADS Tyler Fonternel, ADS’s CIO, joined the company in 2004 and by 2005 the landscape had been significantly changed by the introduction of the DSD business. IT’s challenge was then to integrate the many bottling companies at a system level. For a start, email and networking infrastructures were standardized and centralized. In 2006, integrating ADS’s systems began in earnest. Given the acquisitions, there were not only multiple instances of SAP running across DSD operations, but there were also dozens of different route accounting systems. While SAP tended to manage (pre-)sales and billing information, route accounting systems recorded all the details related to order fulfillment, that is, inventory at a given warehouse, the loading of delivery trucks, and actual deliveries made. Route accounting systems generally relied on ‘brick’ hand-helds (see Appendix B for an image) that many account managers and drivers used to manage order-related information. Nevertheless, processes varied greatly across bottlers; some still operated in highly manual, entirely paper-based ways. The objective of the system integration effort was to consolidate the IT infrastructure so that only one instance of SAP and one route accounting system (i.e., Route Manager) would support the DSD organization in its entirety. DSD organized its more than 150 branches into three business units (BU) (West, Central and East). Branches represented the engine of DSD operations: they warehoused the inventory that had been produced in one of ADS’s 15 manufacturing facilities; they staged and loaded cases of product onto trucks every night to deliver retailers’ orders the next morning; they handled returns once the trucks came back at the end of the day. Dispatchers oversaw the logistics of branch operations. With the introduction of the DSD business model, the IT department was fundamentally restructured. Except for business-facing roles, all IT services were outsourced. Keeping-the-lights-on functions such as maintaining the network infrastructure, data center management and email, as well as systems development work – including configuring and programming SAP – were migrated to third parties. This left the IT organization with about 80 FTEs, the majority of whom were organized into small ~3-person Business Partner teams. Each team was typically composed of a director and two managers. Only about 10 back-office staff remained to complete functions such as data analysis, report generation and vendor management. Each Business Partner team functioned almost like an independent IT department dedicated to serving their BU customers. They represented IT’s primary contact to business users and liaised directly with the various third-party service providers to deliver requisite solutions. In effect, ADS’s model for business-IT alignment consisted of Business Partner teams with the director serving as a ‘mini CIO’ who reported to both an IT and a business VP. Tyler Fonternel explained this matrix model: So it keeps everything for that business with one small group of ADS employees. Even the outsourced organizations are highly engaged with the business. So if a finance user has a problem in AP or something, they will know the person – whether in ADS or the outsource partner – who is their support person and they will work directly with them. They know exactly where to go and they have all the resources lined up. One of the strategies employed by the Business Partner groups who served the three DSD BUs was to get immersed in the business. This entailed spending time observing everyday work practices at the branches and interviewing the staff about the effectiveness of business processes and technology. This immersion strategy, while labor intensive, helped the Business Partners build relationships and trust in the field. Veronica Du Plessis, who had been one of the first IT Business Partners serving DSD, explained the value of this organizational arrangement: The business partner role was the right thing to do at the right time. What it meant to us as an IT organization was that it created that relationship where the business would come to us first, rather than negotiate their own printer contract with some vendor out in California, for example. We wanted them to adopt us and use us as their trusted advisor for all things technology. With that you can see savings and standardization. We had to roll out core ERP and route-to-market systems at that time, and without that relationship, you might never have gotten anything deployed, because the businesses would not have cooperated. Furthermore, the immersion strategy gave the IT group deep knowledge of the entire process flow in DSD, thus making the Business Partners – rather than the branch managers – the