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Why P&G CIO Is Quadrupling Analytics Expertise

Procter & Gamble's Filippo Passerini is investing in analytics talent, even as the company cuts in other areas, to speed up business decision making.

Passerini talks about the what, why, and how of a problem. "What" is the problem itself -- is market share stable or has it shrunk two points? He thinks P&G has beaten the what problem by giving 58,000 employees business intelligence "cockpits," which are dashboards that link to common data sources so people spend little time arguing over whose data to use.

"Why" is the cause of a problem -- was it a bad TV ad, out-of-stock shelves, or a competitor's new product or price cut that caused a problem? Right now, the P&G IT team is working on automating analysis of the why, so employees get alerts when key events like a supply chain snafu or rival product launch happen.

If P&G can eliminate "what" discussions and some of the "why," and decision-makers can jump right to how to solve a problem, "that radically increases the pace at which they do business," Passerini says.

The final piece is bringing in that business analytics expertise. These are people "at the intersection of business and IT," Passerini says. They need to be as well versed in P&G business issues as a marketing pro. And they need to be skilled in finding information, building data models, and creating simulations.

For example, when CEO Bob McDonald and his executive committee meet each Monday, one data slice they look at is the "top 50"--combinations of products and country markets (Brazil hair care, perhaps, or U.S. pet care) that are the company's 50 largest, making up about 60% of sales. Data visualizations show at a glance if sales or share are moving materially.

If they are, and executives want to drill down, Jeffrey Goldman is the business analyst in that key meeting who delivers those insights, delivering analysis in real time on screens that all the executives see. Is a sales dip in detergent in France because of one retailer, so that's where to focus? Is that retailer buying less only in France, or across Europe? Did P&G cut promotions or raise prices, letting a rival grab share, or is the category overall losing sales? Goldman delivers this kind of data so executives can decide how to respond.

Passerini pictures analytics experts like Goldman sitting in on more meetings to make sure the "how" to solve problems gets sorted out right then and there, not postponed until everyone gets more information. The old model would mean "let's get back to this in two weeks," he says. "You need to be able to answer that question immediately."

Passerini describes the video and data collaboration efforts, and the role of the busines analysts, as "harmonizing" how people do business across P&G. It's the opposite of creating standard reports. It's about creating a standard environment with the right tools, then it's up to the experts in that room to use whatever data they need to make the right decisions.

And make them now.

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User Rank: Apprentice
2/27/2012 | 7:44:25 PM
re: Why P&G CIO Is Quadrupling Analytics Expertise
P&G is spot on. Messrs. Passerini and McDonald see the goal of real time info as just that. Filippo identifies what this model seeks and is in need of. This is global leadership in businesses data, time sensitive with speed while also being wholly inter-active including live in the field - all inclusive. What is not to like?

To quote from Mark Twain ~ 1908: " Thunder is good thunder is impressive but, it is lighting which does the work." Naturally the world has changed since so to borrow this metaphor today: P&Gs new model may be like the speeding up global lightening strikes in frequencies and with far better precision and results. I like it. Greg Imhoff
User Rank: Apprentice
2/22/2012 | 10:02:41 PM
re: Why P&G CIO Is Quadrupling Analytics Expertise
I wonder if the speed of decision making will actually increase given P&G's consensus style of decision making. I am sure that these new insights can improve the quality of decisions. I am not convinced that the speed of decision making will increase unless P&G changes its decision making model and decision rights. Chris, did you have any discussion with Passerini on this?
User Rank: Apprentice
2/18/2012 | 1:37:57 AM
re: Why P&G CIO Is Quadrupling Analytics Expertise
I wouldn't call this "analytics" in the sense of using predictive analytics to determine likely outcomes. It sounds like moving from pumping out static reports to a business intelligence self-service model. In other words, they can figure out that there was a dip in detergent sales and try to piece together the reasons why after the fact, but they did not use SPSS/SAS style multiple regression analyses and other predicative modeling tools to know that there would be a dip in detergent before it happened. It is stage two of a three stage evolution. People used to get reports which told them what happened, but not why. They now know what and why, but the cutting edge step is moving to understanding what will happen and why it will happen using modeling tools before they implement a decision.

Many organizations, if we are honest, do not even know to a high level of certainty what happened. They get BI reports and everyone immediately questions the validity of the numbers. Master data management and data quality is a necessary first step for many organizations before they even are serious about BI or analytics.
User Rank: Author
2/17/2012 | 5:48:59 PM
re: Why P&G CIO Is Quadrupling Analytics Expertise
You highlight a huge risk: that IT will try to "get as much data as possible so that the executives can ignore it." P&G's approach is the opposite of that. Passerini explicitly tries to avoid that risk by doing what he calls "putting the cart before the horse." So, his team first created this Business Sphere, which allows data to be shared in a very dramatic way in front of the executive team, knowing that he couldn't yet provide all the data that those execs would want to discuss. By design, IT didn't try to figure out all the data execs would want. IT has tried that approach for ages and it doesn't work. Instead, Passerini put the data visualization platform in place, knowing execs would complain that they need more data about XYZ. IT would react to that pull -- execs asking for data -- rather than guessing what they wanted and collecting that.
User Rank: Black Belt
2/17/2012 | 9:43:09 AM
re: Why P&G CIO Is Quadrupling Analytics Expertise
Not sure what is so amazing in here. Perhaps the article is not providing enough ground for readers to appreciate this so called transformational journey. These type of data-points are always captured, and ignored. The classic Dilbert model of "get as much data as possible so that the executives can ignore it and make decisions based on company politics." CIOs have to "prove" their worth and justify their place in the organization and therefore have to keep on doing things which appear "helping business". Otherwise if things are what they were 3 years back, the role of IT will be questioned and CIO will come under stress. Its the same thing across organizational chain, everyone has his/her performance indicators and promised goals to achieve and thrive to achieve them irrespective of the fact that those are largely useless.
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