Building Integrated Business Service for Analytics in CPG
At the end of the day, manufacturing a consumer product comes down to selling, servicing and delivering. What product? How many units? Shipped by when? Which customers? On which terms? These are the kinds of questions that producers of consumer goods are generally expected to address on a more or less real-time basis.
Coming up with the right answers to these questions – as well as a host of other concerns related to price, promotions, cost, demand and other factors – means having access to the right information. That requires the right data, but it is not sufficient for increased sales and better performance. To be really effective, decision-makers in strategic planning, finance, product development, manufacturing, marketing and supply chain want access to the same high-quality data, presented in consistent, easily comprehensible formats. Making that possible depends on how data is organized and whether it is accessible to an enterprise.
Getting the right data at the right time in the right format can be a major strategic challenge for organizations. Different lines of business or geographic units may collect their own data and report it in ways that flatter their own performance. That can cause ripple effects across the enterprise with consequences that affect profitability. For instance, failure to anticipate demand for a specific product can lead to lost sales opportunities and strained relationships with key retail accounts.
A number of consumer goods manufacturers have dealt with data management problems by evolving their shared services to incorporate back, middle and front office services. As they integrate these business services, which may include human resources, information technology, procurement, supply chain and logistics, and sales and marketing, among others, they become accountable to the C-suite. They collect and have the opportunity to integrate a tremendous amount of data which can be aggregated and analyzed to provide useful insights to the enterprise, and as such can help consumer goods companies address five major challenges:
Moving control of data to an integrated business services organization may introduce a much-needed independent authority over data standards. By moving ownership of the master data, reporting and analytics capabilities to such an organization, the enterprise may tap into the structural support needed to easily scale, modify and improve the services to meet the changing needs of the business. And, the integration of business services may offer talented individuals in specialized fields the opportunity to progress through a variety of roles, including management.
In a competitive and volatile environment, consumer goods companies need every possible edge to outmaneuver their rivals. As they focus on developing data-driven business insights, master data, reporting and analytics may be a prime target to deliver as a service via integrated business services. By embedding this capability within such an organization and offering it as a service, consumer goods companies may be able to put data governance, quality and standards into the hands of an objective organization dedicated to driving efficiencies, improving processes and ensuring consistency in data and analytics.
ABOUT THE AUTHOR
Paul Jeruchimowitz is a managing director in Management Consulting at Accenture, a global management consulting, technology services and outsourcing company.
Coming up with the right answers to these questions – as well as a host of other concerns related to price, promotions, cost, demand and other factors – means having access to the right information. That requires the right data, but it is not sufficient for increased sales and better performance. To be really effective, decision-makers in strategic planning, finance, product development, manufacturing, marketing and supply chain want access to the same high-quality data, presented in consistent, easily comprehensible formats. Making that possible depends on how data is organized and whether it is accessible to an enterprise.
Getting the right data at the right time in the right format can be a major strategic challenge for organizations. Different lines of business or geographic units may collect their own data and report it in ways that flatter their own performance. That can cause ripple effects across the enterprise with consequences that affect profitability. For instance, failure to anticipate demand for a specific product can lead to lost sales opportunities and strained relationships with key retail accounts.
A number of consumer goods manufacturers have dealt with data management problems by evolving their shared services to incorporate back, middle and front office services. As they integrate these business services, which may include human resources, information technology, procurement, supply chain and logistics, and sales and marketing, among others, they become accountable to the C-suite. They collect and have the opportunity to integrate a tremendous amount of data which can be aggregated and analyzed to provide useful insights to the enterprise, and as such can help consumer goods companies address five major challenges:
- Building consistency in data structures and centralizing quality management. Even with a strong corporate governance structure, consumer goods companies may face a higher risk of data quality issues when functions and business units or geographies develop their own master data, reporting and analytics capabilities. When different business or geographic units have control over how they use and report on information, they may present the data (using unique formats or views, non-standard time periods, revised data definitions and other methods) that reflect the business or geographic unit in the most favorable manner. At the same time, corporate decision-makers often struggle with disparate presentations that could lead to different conclusions.
- Meeting the evolving analytical needs of the business. In today’s fast-paced environment, consumer product manufacturers may benefit from the ability to move quickly into new territories or new segments to stay ahead of their competition. At other times, they may find themselves dealing with an increasingly volatile marketplace. Time is often of the essence when making business decisions. If the right data/reporting structures are not in place, the enterprise may miss opportunities or see substantial impact from risks that materialize.
- Developing cross-functional, data-driven insight. Although functions and business units may realize initial success when developing their own master data, reporting and analytics capabilities, the complete picture comes into view when organizations can quickly, easily and confidently link the data across business silos, such as marketing and logistics. Additional insights and value may be generated if the organization can adeptly layer in and manage third- party data sources as well.
- Building the right analytics operating model and talent strategy. To become analytics-driven organizations, consumer products goods (CPG) companies must go on a journey that begins with building the appropriate operating model. That operating model should meet three core requirements: analytics infused into the decision-making process, analytics capabilities organized and governed across the entire organization and clear sourcing and management processes for analytics talent. The skill sets within any well-developed master data, reporting and analytics capability can range from transactional data management to basic reporting to predictive analytic skills that may require a Ph.D. Within the organization, there can be a delicate balance between hiring enough resources with the proper skill sets to meet business needs while maintaining a sustainable payroll cost structure. It can become difficult, expensive and, in some cases, unrealistic for consumer goods companies to duplicate this capability across multiple functions.
- Maximizing master data, reporting and analytics technology investments. When different functions and organizational entities make autonomous decisions to invest in their own master data, reporting and analytics capabilities, the investments may not achieve maximum return. The individual entities often develop their own methods to analyze data and provide reports to their constituents in their own format (which may or may not resemble that of the other organizational entities). Consequently, what started out as smart investments by individual organizational entities may turn into a costly way for an enterprise to run its business as a whole.
Moving control of data to an integrated business services organization may introduce a much-needed independent authority over data standards. By moving ownership of the master data, reporting and analytics capabilities to such an organization, the enterprise may tap into the structural support needed to easily scale, modify and improve the services to meet the changing needs of the business. And, the integration of business services may offer talented individuals in specialized fields the opportunity to progress through a variety of roles, including management.
In a competitive and volatile environment, consumer goods companies need every possible edge to outmaneuver their rivals. As they focus on developing data-driven business insights, master data, reporting and analytics may be a prime target to deliver as a service via integrated business services. By embedding this capability within such an organization and offering it as a service, consumer goods companies may be able to put data governance, quality and standards into the hands of an objective organization dedicated to driving efficiencies, improving processes and ensuring consistency in data and analytics.
ABOUT THE AUTHOR
Paul Jeruchimowitz is a managing director in Management Consulting at Accenture, a global management consulting, technology services and outsourcing company.