Do We Really Need a DSR?

CGT’s Downstream Data Share Group met on October 24, 2011, during the Consumer Goods Business and Technology Leadership Conference in Orlando, Fla., and as expected, the conversation took no time to heat up with many perspectives joining the discussion!

 

The meeting was kicked-off by pondering the seemingly preposterous question: Do we really need a Demand Signal Repository (DSR)?

 

The die-hards quoted Altimeter Group Analyst Lora Cecere’s research, which found that the average payback on a DSR implementation is only 6 weeks, but there are few initiatives with this kind of payback. Overall, members agreed that DSRs are foundational to an organization but members did question how much data is really necessary and what it should be focused on. Here are the highlights of the discussion:

 

Understand Data Usage: The amount of data can become quickly overwhelming, particularly when dealing with daily data on a daily basis. Ascertain what is really necessary to glean required insights and whether that applies for all products, geographies and/or customers. Consider future needs as well as today’s realities, and understand what your goals are before you just start gathering data. There may be soft benefits as well as hard ROI; for many companies, this involves enabling a new type of conversation with your retail customers, which is very different than the one that was possible with only syndicated data.

 

Quantify DSR Impact: When DSR data is used for retail execution, the impact can be monitored and tracked and the value becomes quite apparent. In a perishable business, for example, this kind of use case helps retailers order enough product based on demand signals and prevents stock outs (caused by retailers not ordering enough).

 

Master Data Management: If you aren’t tired of hearing about it, MDM is a key to success with a DSR. One area to consider is external MDM, including helping retailers clean their data. Suppliers can help retailers close the loop on the dirty data cycle and both trading parties will benefit. How clean does it need to be? Some companies implement tolerance levels to track progress so they can at least start using the data. Many felt that 100 percent compliance is not possible and is not necessary to get started.

 

Consider Implications of Social Media: Should you include data from social media in your DSR initiative? For example, POS data can tell you what is happening but insights from social media outlets can tell you why. It certainly complicates scenarios, but the potential upside is huge, especially when combined with POS and retailer loyalty data. Data from mobile activities should also be considered.

 

Downstream or Upstream?  Should we be calling these initiatives “Downstream Data” when a lot of the data is flowing upstream?

 

Who Should Own the DSR? The answer varied widely, and for some companies, evolved over time. For some, sales takes the lead, and for others, it’s more cross-functional involving sales, marketing, operations and supply chain. IT is usually involved but is not the ultimate owner. For many companies, a champion who is passionate about the project drives the project forward and becomes the defacto owner.

 

Build or Buy? This can be like a religious debate, and there is no right or wrong answer. It often depends on internal capabilities and the tools available at the time of implementation. For many members, a multi-vendor solution is being used, primarily for differences amongst retailers.