2016 Review & Outlook: Cross-Functional/IT Trends
3/15/2016
While this section has always included data as a key initiative, by focusing our question wholly on data and analytics, new issues have been raised that cross departmental silos. While the potential benefits of strategic data initiatives are motivating many organizations to take action, concerns around integration and talent are important to note.
Tony Bender
CIO & Vice President, Global Business Services
Edgewell Personal Care
Actionable business insights can only be consistently achieved with great data and analytics. There are many examples and use cases for advanced analytics, but let’s review two that are high value and help to drive results and influence business strategy:
1. Global Spend & Workforce Analytics – consumer products (CP) companies are under ever-increasing scrutiny to manage cost. Analytics can play a key role in understanding all areas of spend within an organization. This is vital for improving spend visibility and to enable strategic sourcing – consolidating vendors from many to a few strategic vendors to optimize spend. Additionally, there is a growing awareness of the value of workforce analytics to improve our understanding of the cost of human capital by function, including both internal colleagues and variable contract staff.
2. Category & Brand Analytics – Social media provides a wealth of valuable information that can be harvested to better understand consumer sentiment, loyalty, brand strength and can help detect changes in the category competitive landscape. This information can be used to do one-on-one marketing to individuals encouraging purchase trial or repeat purchase. Also, scanning social media by category provides insights into new competitors that are entering the category and the growth of consumer awareness of these competitors based on social transaction activity. This information can influence business strategy and drive changes in product design and marketing strategy.
Britt Fogg
Senior Vice President Product Operations
SPI (Software Paradigms International)
The influx of available data from multiple channels and data streams is forcing the consumer goods (CG) industry to change the way they do business.
Companies must find a way to merge this multi-faceted data and extract the actionable insights. Not only is there a need for a powerful and flexible analytics tool, but skilled business insight professionals as well.
Insight professionals that are proficient with data analysis and have the business savvy to leverage the gained insights are moving their focus to planning around prescriptive behaviors as opposed to strictly reacting to the past. More attention is now dedicated to determining the root cause of issues and establishing preventative measures.
The need for insights from big data is moving much closer to the point of decision than ever before. Business intelligence (BI) is no longer a separate function from daily operations and planning, it is an integral part of it, enabling companies to deliver according to the customers’ needs and preferences.
Dave Garriott
Director Enterprise Analytics
McCormick and Company
The game has changed … analytical services provided by IT must change as well. At McCormick, we accept the fact that our business partners are savvy, creative and self-sufficient. Key challenges include data governance, security, standard tools and standard KPIs. ‘Shadow IT’, specifically in analytics, is very real. IT’s value proposition is to acknowledge trends driving our business community to independent solutions and perceived advantages.
What can IT organizations in consumer packaged goods (CPG) do about it? Plenty.
Start with strategy. Align with senior level executives and build a vision for collaborative analytics. IT partners with functional Communities of Practice (COP) and/or Centers of Excellence (COE). Form an Analytics Leadership Team consisting of COP/COE and IT. This intersection of stakeholders will align on strategic imperatives and requisite analytical capabilities.
Revise the people strategy. Focus on career paths, skills, training, organizational alignment across IT and business functions.
Technology/data. Invest in emerging capabilities (e.g. predictive/prescriptive, cloud, mobility, visualization) and justify with pilot projects. Embrace self-service BI and enable functions to quickly react to changing business conditions. Become a partner. Shift from data constrainer to data enabler.
Finally and most importantly, document it, sell it and actively promote successes. Demonstrate the value IT will bring as a trusted partner.
Brian Girouard
VP & Leader, North America Consumer
Products & Agribusiness
Capgemini
Consumer goods companies that effectively leverage data and world-class analytics create more relevant relationships with their customers and consumers. They also experience more accurate demand forecasts and optimized inventory, production and distribution plans.
Reaping these rewards requires the redesign of organizations to adapt to digital while investing significantly in technology. A recent Capgemini Consulting report, conducted in collaboration with MIT, found that “digital organizations” outperform competitors on customer satisfaction and innovation. For example, 90 percent of companies considered to be “digital organizations” believe they achieve class-leading performance in customer satisfaction, while the percentage drops to only 41 when all respondents are considered.
Making data-driven decisions, enabled by easy access to data and collaboration tools, is essential to becoming a digital organization. Additionally, organizations must possess a digital-first mindset, digitize operations and cultivate an organization with a high digital IQ. P&G’s Decision Cockpits and Unilever’s People Data Centers are leading examples of providing single sources of truth to decision makers throughout their digital organizations.
Digital organizations are far more advanced than their peers, and drive new levels of efficiency and customer responsiveness. They achieve higher levels of access to real-time customer data, integrated end-user data, real-time financial data and integrated operational performance. Ultimately, harnessing the power of data and world-class analytics helps improve brand value and expands margins.
Kishor Gummaraju?
Managing Partner
Infosys
The CPG industry always had tons of data to deal with. In recent times there is a lot more: social feeds, sensor data, e-commerce feeds, etc. The enhanced analytical capabilities have made it possible to derive insights from data very rapidly. Being able to make the most of these capabilities has certain strategic implications:
1. Technology Rethink: Leading CPG companies are putting in place a technology strategy of leveraging a combination of HANA and open source capabilities. Given the rapid developments in open source there is no reason to get tied to proprietary platforms for insights.
2. Process Rethink: The availability of near real-time insights makes it possible to extract significant value from every business process across R&D, manufacturing, logistics, sales, marketing and even HR. Hence, CPG companies are relooking at the possibility of rethinking each of these processes.
3. Culture and Talent Rethink: Analytical capabilities are only part of the solution. The ability to derive insights and act on it requires a change in culture and the right supporting talent. We are working with a number of CPG organizations in leveraging Design Thinking as a means of driving this change.
Paul Hardy
Director of Emerging Markets
ConAgra Foods, Inc.
I am fortunate to have started my career in various operations / logistics and planning roles. In these service functions I supported smart and talented leaders around the globe. Despite varying style and cadence, one thing remained the same amongst them all. When presented with good data, they made better decisions. I began to develop a deep-rooted appreciation for the discipline of mining and communicating the best data available within the constructs of a given organization or marketplace. With a critical eye on driving out costs, reducing churn and eliminating duplication of efforts, I feel that more and more companies will be willing to invest in the People, Process and Tools it requires to make informed decisions. It is a question of setting egos and “gut instinct” aside long enough to build credibility both internally and externally. We may not be able to predict the future … but give me the right level of historical and real-time inputs and the proper analytical tools, and we can get close enough to reduce waste, improve service levels and deliver a better bottom line to fuel the company. As more and more data is available, it is starting to move osmotically from one industry to the other and the more we share, the more we can help each other. That is one of many aspects I have enjoyed in this space is the academic approach that is taken amongst non-competitive companies. We all have similar issues when it comes to consumer goods and who knows which piece of your puzzle someone else may be holding onto. I have seen the momentum and many leaders are laying this framework or strengthening what they already have in place so that they are better prepared than their competitors to leverage the knowledge that is being shared openly. It is a long game to play and it requires a level of trust and strength of conviction to commit to investing what it takes to establish the back end, but it is my opinion that it is money well spent.
Parag Jain
Head of Sales - Consumer Packaged Goods
Tata Consultancy Services
Analytics Foster Collaboration
An important outcome from the recent proliferation of analytics is greater collaboration between CPG companies and their retailer clients.
As expectations and demands around supply chain efficiency intensify daily, retailers and manufacturers are realizing that a single, shared view of the business can greatly improve their ability to focus on strategic issues. For instance, understanding SKU velocity and sharing shopper insights supports collaborative demand forecasting and dynamic replenishment.
Both CPG and retail organizations have the potential to bring complimentary expertise and metrics to the table. Through this newfound cooperation, CPG companies are becoming a trusted advisor to retail clients by providing a unique perspective into how categories and promotions are performing.
A strong alliance can help the partners analyze integrated data that enables better brand, product, packaging supply chain and business planning decisions. In addition, they can determine actionable insights to drive shopper-marketing programs.
After all, CPG companies and retailers are natural allies in sharing the common goal of pleasing the customer. Armed with a better awareness of trends, and putting the consumer at the heart of their businesses, they can develop more compelling offerings and optimize the factors that influence sales performance.
Kimberly Knickle
Vice President
IDC Manufacturing Insights
At IDC, we see that digital transformation (DX) is at the center of consumer goods companies’ business strategy for 2016. Nowhere is the impact of DX more visible than in the way CG companies are acquiring, using, consuming, and delivering data and analytics. To help with this transition to DX and increase the availability of data and world-class analytics, IT leadership is following through on three key priorities:
· Innovate to create digital innovations, many of which depend on analytics and higher quality data from more sources.
· Integrate new technology into stable business services, including ready access to analysis for more real-time decision making, predictive analysis, and digital assistance.
· Incorporate new skills, techniques, and culture into the fabric of the IT organization and more broadly into the business for managers and a wider base of employees and even customers and consumers.
To ensure IT’s efforts on analytics are successful, we expect more investments in three areas – big data and micro analytics, cloud-based analytics, and more sophisticated self-service and automated analytics capabilities. Consequently, IT organizations must be able to procure and manage analytics from many vendors and support different types of analytics requirements from the business. But, the effort will be well worth it for DX.
James Lamberti
CMO
Quri, Inc.
In the past, retail execution was difficult to measure and track and was often a blind spot for many CPG companies. The rise of Retail Intelligence Technology has illuminated that blind spot and has changed the way the industry makes decisions about in-store merchandising. This innovative data stream provides a new level of retail visibility that enables on-going measurement of in-store conditions like price, promotion, and on-shelf availability. Now, CPG companies can more comprehensively understand the root causes that impact success in their businesses. With this information at their fingertips in near real time, CPG companies have the ability to make quicker, more informed decisions about their merchandising plan, often within cycle. These insights accumulated over time become a powerful tool that can guide future business planning to achieve performance driven merchandising and maximize sales.
Christopher Luu
Managing Partner
Luu Consulting Group
Sales and marketing has traditionally been the king in most consumer packaged goods businesses and rightfully so because they bring in the customers and revenue. They also have the most data! Internal data from other business functions is being undervalued and overlooked. Analytics is changing that balance by putting data from all departments on the same page; unlocking new insights. For example, supply chain has always been behind the curtains, but more and more consumers, are demanding a peek at how and where their products are manufactured. As more and more data is available, analytics is more critical in filtering out noise to find insights that drive business outcomes. While market growth steadies in 2016, take a look at data from business functions that are not directly customer facing because consumers may find value in that information when making purchases.
Michael Marzano
Business Process Expert Retail Execution
Eric Kim
Associate Director Customer Development
Mondelez International
The hype around “big data” has preceded our capabilities to access, ingest and analyze it all. But progress is quickly being made. Both analytical capabilities and colleague skill sets have caught-up. Easy access and tools have blurred the roles of IT professionals, reporting specialists, and business operators with more levels and functions of an organization in tune with business needs and results. As a result, two key strategies have emerged:
• Grow Curiosity
• Expand Collaboration
The emergence of more timely data and tools has allowed functional teams to become more inquisitive. Data has begun to drive behavior as more and better questions are being asked. Curiosity is challenging the norm and identifying new and improved business processes to pilot and adopt. Organizations can continue to grow this curiosity by leveraging technologies that support data exploration and visualization.
This surge of curiosity, supported by new technical capabilities to easily link data from multiple sources, is driving teams to interact and collaborate more. Functional silos between sales, marketing, supply chain and finance are breaking down and more cross-functional projects and shared KPI’s are evolving.
The improved internal collaboration has led to an increase in collaboration with our external business partners. Data provides transparency. For example, sales teams are now able to openly present performance and opportunities with retailers to drive incremental sales. And retailers can challenge vendors and hold them accountable.
Thierry Soudee
CEO
UpClear
810 million Google results refer to big data, so that shows the excitement for the subject! Optimistic early adopters predict that successful CPG companies will be using big data analytics for collecting and discerning consumer intelligence. As data begins to drive strategy, online activity, purchasing preferences, location of transactions etc., it can be linked together to identify individuals as a “segment of one” with customized messages and offers.
This may indeed happen, but the truth is that many CPG companies today are frequently overwhelmed with the data available, unable to analyze or action it effectively. Part of it is because all this data is mostly disjointed, and the aggregation methods and tools are limited. The resulting intelligence ends up stuck in silos across analysts and departments with limited cross-functional exchange.
Big data is available, but for it to be an effective strategic tool, the next challenge is to connect and map the different sources and data streams. Only then can functional departments utilize comprehensive insights.
Tammy Teague
Consumer Products Industry Principal
Clarkston Consulting
Digital Transformation can be an eye-opening exercise for consumer goods companies in creating new ways to make life simpler by digitally linking front-and back-end processes.
According to CGT’s 2014 Digital Marketing Study, while over 70 percent of CPG companies are now marketing to consumers directly through digital touchpoints, less than 20 percent of those same companies have reported seeing results by measuring the effectiveness of consumer engagements and their incremental business benefits. To this end, the ability to realize strategic insights and drive brand management, consumer experience, and consumer marketing through digital channels is critical to maintaining competitive advantage in today’s market. Historically, IT departments have struggled to keep up in this regard and, going forward, must increase access to resources that have Digital Dexterity, specifically those that have the expertise to leverage and manipulate technology for advantages in unique and highly innovative ways. Further, IT needs to better utilize the incremental data modeling techniques developed over the past few years, those that have allowed them to apply agile development capabilities to deliver enterprise business intelligence applications one piece at a time so that projects do not take so long, cost to much and address more short-term business goals. Finally, the explosion of sensor technology will continue to drive new and interesting ways companies will need to collect data and translate that in a digital format
Tony Bender
CIO & Vice President, Global Business Services
Edgewell Personal Care
Actionable business insights can only be consistently achieved with great data and analytics. There are many examples and use cases for advanced analytics, but let’s review two that are high value and help to drive results and influence business strategy:
1. Global Spend & Workforce Analytics – consumer products (CP) companies are under ever-increasing scrutiny to manage cost. Analytics can play a key role in understanding all areas of spend within an organization. This is vital for improving spend visibility and to enable strategic sourcing – consolidating vendors from many to a few strategic vendors to optimize spend. Additionally, there is a growing awareness of the value of workforce analytics to improve our understanding of the cost of human capital by function, including both internal colleagues and variable contract staff.
2. Category & Brand Analytics – Social media provides a wealth of valuable information that can be harvested to better understand consumer sentiment, loyalty, brand strength and can help detect changes in the category competitive landscape. This information can be used to do one-on-one marketing to individuals encouraging purchase trial or repeat purchase. Also, scanning social media by category provides insights into new competitors that are entering the category and the growth of consumer awareness of these competitors based on social transaction activity. This information can influence business strategy and drive changes in product design and marketing strategy.
Britt Fogg
Senior Vice President Product Operations
SPI (Software Paradigms International)
The influx of available data from multiple channels and data streams is forcing the consumer goods (CG) industry to change the way they do business.
Companies must find a way to merge this multi-faceted data and extract the actionable insights. Not only is there a need for a powerful and flexible analytics tool, but skilled business insight professionals as well.
Insight professionals that are proficient with data analysis and have the business savvy to leverage the gained insights are moving their focus to planning around prescriptive behaviors as opposed to strictly reacting to the past. More attention is now dedicated to determining the root cause of issues and establishing preventative measures.
The need for insights from big data is moving much closer to the point of decision than ever before. Business intelligence (BI) is no longer a separate function from daily operations and planning, it is an integral part of it, enabling companies to deliver according to the customers’ needs and preferences.
Dave Garriott
Director Enterprise Analytics
McCormick and Company
The game has changed … analytical services provided by IT must change as well. At McCormick, we accept the fact that our business partners are savvy, creative and self-sufficient. Key challenges include data governance, security, standard tools and standard KPIs. ‘Shadow IT’, specifically in analytics, is very real. IT’s value proposition is to acknowledge trends driving our business community to independent solutions and perceived advantages.
What can IT organizations in consumer packaged goods (CPG) do about it? Plenty.
Start with strategy. Align with senior level executives and build a vision for collaborative analytics. IT partners with functional Communities of Practice (COP) and/or Centers of Excellence (COE). Form an Analytics Leadership Team consisting of COP/COE and IT. This intersection of stakeholders will align on strategic imperatives and requisite analytical capabilities.
Revise the people strategy. Focus on career paths, skills, training, organizational alignment across IT and business functions.
Technology/data. Invest in emerging capabilities (e.g. predictive/prescriptive, cloud, mobility, visualization) and justify with pilot projects. Embrace self-service BI and enable functions to quickly react to changing business conditions. Become a partner. Shift from data constrainer to data enabler.
Finally and most importantly, document it, sell it and actively promote successes. Demonstrate the value IT will bring as a trusted partner.
Brian Girouard
VP & Leader, North America Consumer
Products & Agribusiness
Capgemini
Consumer goods companies that effectively leverage data and world-class analytics create more relevant relationships with their customers and consumers. They also experience more accurate demand forecasts and optimized inventory, production and distribution plans.
Reaping these rewards requires the redesign of organizations to adapt to digital while investing significantly in technology. A recent Capgemini Consulting report, conducted in collaboration with MIT, found that “digital organizations” outperform competitors on customer satisfaction and innovation. For example, 90 percent of companies considered to be “digital organizations” believe they achieve class-leading performance in customer satisfaction, while the percentage drops to only 41 when all respondents are considered.
Making data-driven decisions, enabled by easy access to data and collaboration tools, is essential to becoming a digital organization. Additionally, organizations must possess a digital-first mindset, digitize operations and cultivate an organization with a high digital IQ. P&G’s Decision Cockpits and Unilever’s People Data Centers are leading examples of providing single sources of truth to decision makers throughout their digital organizations.
Digital organizations are far more advanced than their peers, and drive new levels of efficiency and customer responsiveness. They achieve higher levels of access to real-time customer data, integrated end-user data, real-time financial data and integrated operational performance. Ultimately, harnessing the power of data and world-class analytics helps improve brand value and expands margins.
Kishor Gummaraju?
Managing Partner
Infosys
The CPG industry always had tons of data to deal with. In recent times there is a lot more: social feeds, sensor data, e-commerce feeds, etc. The enhanced analytical capabilities have made it possible to derive insights from data very rapidly. Being able to make the most of these capabilities has certain strategic implications:
1. Technology Rethink: Leading CPG companies are putting in place a technology strategy of leveraging a combination of HANA and open source capabilities. Given the rapid developments in open source there is no reason to get tied to proprietary platforms for insights.
2. Process Rethink: The availability of near real-time insights makes it possible to extract significant value from every business process across R&D, manufacturing, logistics, sales, marketing and even HR. Hence, CPG companies are relooking at the possibility of rethinking each of these processes.
3. Culture and Talent Rethink: Analytical capabilities are only part of the solution. The ability to derive insights and act on it requires a change in culture and the right supporting talent. We are working with a number of CPG organizations in leveraging Design Thinking as a means of driving this change.
Paul Hardy
Director of Emerging Markets
ConAgra Foods, Inc.
I am fortunate to have started my career in various operations / logistics and planning roles. In these service functions I supported smart and talented leaders around the globe. Despite varying style and cadence, one thing remained the same amongst them all. When presented with good data, they made better decisions. I began to develop a deep-rooted appreciation for the discipline of mining and communicating the best data available within the constructs of a given organization or marketplace. With a critical eye on driving out costs, reducing churn and eliminating duplication of efforts, I feel that more and more companies will be willing to invest in the People, Process and Tools it requires to make informed decisions. It is a question of setting egos and “gut instinct” aside long enough to build credibility both internally and externally. We may not be able to predict the future … but give me the right level of historical and real-time inputs and the proper analytical tools, and we can get close enough to reduce waste, improve service levels and deliver a better bottom line to fuel the company. As more and more data is available, it is starting to move osmotically from one industry to the other and the more we share, the more we can help each other. That is one of many aspects I have enjoyed in this space is the academic approach that is taken amongst non-competitive companies. We all have similar issues when it comes to consumer goods and who knows which piece of your puzzle someone else may be holding onto. I have seen the momentum and many leaders are laying this framework or strengthening what they already have in place so that they are better prepared than their competitors to leverage the knowledge that is being shared openly. It is a long game to play and it requires a level of trust and strength of conviction to commit to investing what it takes to establish the back end, but it is my opinion that it is money well spent.
Parag Jain
Head of Sales - Consumer Packaged Goods
Tata Consultancy Services
Analytics Foster Collaboration
An important outcome from the recent proliferation of analytics is greater collaboration between CPG companies and their retailer clients.
As expectations and demands around supply chain efficiency intensify daily, retailers and manufacturers are realizing that a single, shared view of the business can greatly improve their ability to focus on strategic issues. For instance, understanding SKU velocity and sharing shopper insights supports collaborative demand forecasting and dynamic replenishment.
Both CPG and retail organizations have the potential to bring complimentary expertise and metrics to the table. Through this newfound cooperation, CPG companies are becoming a trusted advisor to retail clients by providing a unique perspective into how categories and promotions are performing.
A strong alliance can help the partners analyze integrated data that enables better brand, product, packaging supply chain and business planning decisions. In addition, they can determine actionable insights to drive shopper-marketing programs.
After all, CPG companies and retailers are natural allies in sharing the common goal of pleasing the customer. Armed with a better awareness of trends, and putting the consumer at the heart of their businesses, they can develop more compelling offerings and optimize the factors that influence sales performance.
Kimberly Knickle
Vice President
IDC Manufacturing Insights
At IDC, we see that digital transformation (DX) is at the center of consumer goods companies’ business strategy for 2016. Nowhere is the impact of DX more visible than in the way CG companies are acquiring, using, consuming, and delivering data and analytics. To help with this transition to DX and increase the availability of data and world-class analytics, IT leadership is following through on three key priorities:
· Innovate to create digital innovations, many of which depend on analytics and higher quality data from more sources.
· Integrate new technology into stable business services, including ready access to analysis for more real-time decision making, predictive analysis, and digital assistance.
· Incorporate new skills, techniques, and culture into the fabric of the IT organization and more broadly into the business for managers and a wider base of employees and even customers and consumers.
To ensure IT’s efforts on analytics are successful, we expect more investments in three areas – big data and micro analytics, cloud-based analytics, and more sophisticated self-service and automated analytics capabilities. Consequently, IT organizations must be able to procure and manage analytics from many vendors and support different types of analytics requirements from the business. But, the effort will be well worth it for DX.
James Lamberti
CMO
Quri, Inc.
In the past, retail execution was difficult to measure and track and was often a blind spot for many CPG companies. The rise of Retail Intelligence Technology has illuminated that blind spot and has changed the way the industry makes decisions about in-store merchandising. This innovative data stream provides a new level of retail visibility that enables on-going measurement of in-store conditions like price, promotion, and on-shelf availability. Now, CPG companies can more comprehensively understand the root causes that impact success in their businesses. With this information at their fingertips in near real time, CPG companies have the ability to make quicker, more informed decisions about their merchandising plan, often within cycle. These insights accumulated over time become a powerful tool that can guide future business planning to achieve performance driven merchandising and maximize sales.
Christopher Luu
Managing Partner
Luu Consulting Group
Sales and marketing has traditionally been the king in most consumer packaged goods businesses and rightfully so because they bring in the customers and revenue. They also have the most data! Internal data from other business functions is being undervalued and overlooked. Analytics is changing that balance by putting data from all departments on the same page; unlocking new insights. For example, supply chain has always been behind the curtains, but more and more consumers, are demanding a peek at how and where their products are manufactured. As more and more data is available, analytics is more critical in filtering out noise to find insights that drive business outcomes. While market growth steadies in 2016, take a look at data from business functions that are not directly customer facing because consumers may find value in that information when making purchases.
Michael Marzano
Business Process Expert Retail Execution
Eric Kim
Associate Director Customer Development
Mondelez International
The hype around “big data” has preceded our capabilities to access, ingest and analyze it all. But progress is quickly being made. Both analytical capabilities and colleague skill sets have caught-up. Easy access and tools have blurred the roles of IT professionals, reporting specialists, and business operators with more levels and functions of an organization in tune with business needs and results. As a result, two key strategies have emerged:
• Grow Curiosity
• Expand Collaboration
The emergence of more timely data and tools has allowed functional teams to become more inquisitive. Data has begun to drive behavior as more and better questions are being asked. Curiosity is challenging the norm and identifying new and improved business processes to pilot and adopt. Organizations can continue to grow this curiosity by leveraging technologies that support data exploration and visualization.
This surge of curiosity, supported by new technical capabilities to easily link data from multiple sources, is driving teams to interact and collaborate more. Functional silos between sales, marketing, supply chain and finance are breaking down and more cross-functional projects and shared KPI’s are evolving.
The improved internal collaboration has led to an increase in collaboration with our external business partners. Data provides transparency. For example, sales teams are now able to openly present performance and opportunities with retailers to drive incremental sales. And retailers can challenge vendors and hold them accountable.
Thierry Soudee
CEO
UpClear
810 million Google results refer to big data, so that shows the excitement for the subject! Optimistic early adopters predict that successful CPG companies will be using big data analytics for collecting and discerning consumer intelligence. As data begins to drive strategy, online activity, purchasing preferences, location of transactions etc., it can be linked together to identify individuals as a “segment of one” with customized messages and offers.
This may indeed happen, but the truth is that many CPG companies today are frequently overwhelmed with the data available, unable to analyze or action it effectively. Part of it is because all this data is mostly disjointed, and the aggregation methods and tools are limited. The resulting intelligence ends up stuck in silos across analysts and departments with limited cross-functional exchange.
Big data is available, but for it to be an effective strategic tool, the next challenge is to connect and map the different sources and data streams. Only then can functional departments utilize comprehensive insights.
Tammy Teague
Consumer Products Industry Principal
Clarkston Consulting
Digital Transformation can be an eye-opening exercise for consumer goods companies in creating new ways to make life simpler by digitally linking front-and back-end processes.
According to CGT’s 2014 Digital Marketing Study, while over 70 percent of CPG companies are now marketing to consumers directly through digital touchpoints, less than 20 percent of those same companies have reported seeing results by measuring the effectiveness of consumer engagements and their incremental business benefits. To this end, the ability to realize strategic insights and drive brand management, consumer experience, and consumer marketing through digital channels is critical to maintaining competitive advantage in today’s market. Historically, IT departments have struggled to keep up in this regard and, going forward, must increase access to resources that have Digital Dexterity, specifically those that have the expertise to leverage and manipulate technology for advantages in unique and highly innovative ways. Further, IT needs to better utilize the incremental data modeling techniques developed over the past few years, those that have allowed them to apply agile development capabilities to deliver enterprise business intelligence applications one piece at a time so that projects do not take so long, cost to much and address more short-term business goals. Finally, the explosion of sensor technology will continue to drive new and interesting ways companies will need to collect data and translate that in a digital format