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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.

Procter & Gamble CIO Filippo Passerini says he plans to increase fourfold the number of company staff with expertise in business analytics.

Passerini is building that expertise at a time when P&G is cutting costs in other areas, including eliminating 1,600 nonmanufacturing jobs. The company's IT organization itself has cut $900 million in total spending over the past nine years.

Passerini is investing in analytics expertise because the model for using data to run a company is changing. The old IT model was to figure out which reports people wanted, capture the data, and deliver it to the key people weeks or days after the fact. "That model is an obsolete model," he says.

The new model Passerini envisions is something of a virtual, instant-on war room, where people huddle in person or by video around the needed data, pulling in the right experts to fix a problem the moment it arises. This decision-making environment requires better collaboration via easy-to-use video, more real-time data, and business analytics expertise. It might not sound revolutionary in concept. But listen to the details, as I did in a recent discussion with Passerini at P&G's Cincinnati headquarters, and it's clear how far this new strategy is from where we've been.

[Want more on P&G innovation strategy? Read our chief of the year profile of CIO Filippo Passerini. ]

One building block is high-quality videoconferencing, because people solve hard problems faster and better when they can see one another, Passerini maintains. P&G has been an avid user for several years of room-sized Cisco telepresence systems. The video is used as part of a collaboration environment P&G calls Business Sphere, which CEO Bob McDonald and his executive council use to collaborate with colleagues worldwide. It combines video with large screens that display data visualizations on sales, market share, ad spending and the like, so everyone in the meeting is seeing the same information. In the past year, P&G added 50 smaller Business Sphere systems around the world, giving more people access to the technology.

Passerini's team is working on a video platform that broadens access even more by letting people join in regardless of the video system they're using, whether it's Cisco telepresence or WebEx or FaceTime. That would mean a key team member can video in from an iPad, Droid smartphone, or PC if need be.

In terms of data, this strategy needs the right real-time data. What's real time? The goal P&G's working toward is that as soon as data is collected, it's available for use, Passerini says. P&G isn't after new data types; it still wants to share and analyze point-of-sale, inventory, ad spending, and shipment data. What's new is the higher frequency and speed at which P&G gets that data, and the finer granularity. Passerini says P&G has about two-thirds of the real-time data it needs.

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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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