Moving Forward: CG Leaders Realize Value from Downstream Data

<font face="Arial" size="3">Kara Romanow, <em>CGT

6/29/2010

One of the most active initiatives in the consumer goods (CG) industry over the last few years has involved downstream data. Companies are building technologies and processes to leverage the various data types that retailers are now making available at a greater frequency and granularity than in the past. Despite the economic turndown that caused other projects to be cancelled or put on hold, this one is moving full steam ahead and many companies are starting to realize significant benefits.

On June 7, 2010, the CGT Downstream Data Share Group met at the Consumer Goods Sales & Marketing Summit to discuss best practices, share perspectives on where challenges still exist, and reveal what is working in their endeavors to glean insights from retail-based data. The group had an open discussion led by sponsor VMT on return on investment (ROI) and scalability and then heard about some recent research from Hitachi Consulting and AMR Research. Key takeaways include:

1. Base ROI on a specific business process; don't just build a DSR to collect data. For most discussion participants, success involved a business-led driver; projects were not led by IT. The organization needs to understand business benefits and users should be fully engaged to ensure they understand the data they will get and what they can do with it.

2. There are various sources of ROI:

The two main areas for ROI for the majority of attendees involve visibility and out-of-stock reduction.

Collaboration was also cited; insights often enable conversations with retailer customers about what is selling, promotions, margins, etc.

Supply side or sales side? Both!

Forecast accuracy seemed to be another popular source of "low-hanging fruit."

3. Base business cases on one specific driver/process and bring the other benefits in as you begin to roll out and realize additional value. Some potential ROI line items are almost too big for the business to believe up front -- so over-deliver on their expectations!

4. Best practice -- MDM! Master data continues to be a source of failure; best practices include manage and establish central standards/procedures but have flexibility to make accommodations. Establish hierarchies for global and local requirements as well as different business processes like finance versus planning versus sales.

5. Security needs to be considered and integrated into all scalability plans from the beginning. Both are critical for success but it's easier to plan them together rather than retro-fit after implementation.