Gib Bassett

Winning at the Shelf with Cross Channel Engagement

Posted on: April 17th, 2013 by Gib Bassett No Comments

 

(Download a PDF version of this blog post)

A 2010 study by Retail Systems Research (RSR) found that consumers who shop across channels were among a retailer’s most profitable.  They could determine this because of data: customer transactions matched to their sources across physical stores and websites.

This makes sense when you consider that a customer who buys from you using multiple channels is demonstrating a greater degree of engagement than those who do not.  Add the availability of many alternatives and the density of marketing messages in all media, and these relatively committed consumers are ones retailers need to know.  The fact they can be proven more profitable is icing on the cake.

Could the same hold true for consumer goods manufacturers, even though they lack closed loop insight into identifiable consumers and their retail transactions?  Surely highly engaged consumers across multiple channels are worth knowing, yet how could that insight relate to the path to purchase and help influence product choice?

Data Silos the Norm

Consider how branded goods makers have been engaging consumers and shoppers for many years across digital channels.  From in store text message promotions and email coupon programs, to websites, social media and mobile applications featuring recipes, games, and lifestyle content, brands have generated a great deal of consumer and shopper data.

For the most part, however, data created during the course of these interactions – system generated data like email opens, click throughs and website activity or consumer-generated data like opt in permissions, communication preferences, demographics and household characteristics – hasn’t been captured in that most fundamental of marketing resources: a database.  Instead, the data has been scattered within company silos and among the external agencies that often created the programs.

The logic goes: absent closed loop transactional insight, what possible benefit could be achieved by capturing and integrating this data?

Shifting Moment of Truth

There’s a lot of evidence to suggest the benefits are considerable, if not necessary to compete effectively today.  Google’s “Zero Moment of Truth” describes research showing the influence of out of store online activities on in-store purchase decisions for many categories of consumer products.  This view challenges the long held belief that a “First Moment of Truth” when a consumer greets product on the shelf is the predominant interaction that drives sales.

Marketing message saturation is reaching a point of diminishing returns for marketers in all industries, so the companies who understand and communicate “best” with their consumers anywhere, anytime stand to win the lion’s share of attention.

If the data were captured and integrated – within and across brands – could it represent the holy grail of insight needed to understand and influence the shopper’s path to purchase at a time when growth is elusive, new product introductions continue to fail, trade promotion expense grows at a disproportionate rate to sales, and retail private labels continue to take share?

Create to Consumer Visibility

This was the topic of my recent presentation with colleague Tim Shaw at the 2013 Teradata Marketing Summit.  In our talk, we explained how Teradata simplifies the process of obtaining and leveraging consumer marketing data with other sources within and outside the company to improve decision making across all functional areas – including agencies.  We called this insight “create to consumer visibility” to describe connecting the dots from production all the way through purchase and consumption.  Check out the deck on Slideshare here.

I thought it a worthwhile follow up to illustrate how reconciling all consumer digital marketing data around a single consumer profile can power intelligent engagement that aligns to the shopper path to purchase, and ultimately show how this impacts sales.

Cross Channel Behavior Informs the Path

Perhaps the simplest way to view this opportunity is to envision the cross channel engaged consumer as a segment unto itself.  Many brands possess tens of thousands of these today, but probably can’t tell you who they are.  Creating more of them should be the objective if you embrace the notion that highly engaged consumers are the most valuable.

Consider the digital promotions and marketing activities consumer goods companies and their agencies have engaged in over the past decade:

  • SMS text message promotions near the shelf or point of sale:  Shoppers have been enticed to enter contests while shopping using ubiquitous text messaging.  Theses interactions often yield the consumer’s mobile phone number and permission to communicate with them “on the go,” but also tell the marketer when the individual tends to shop (time of day) and location (when using unique SMS keywords per store).
  • Email coupon programs: Consumers have registered with their favorite brands to receive limited time offers and coupons.  They have opted into these communications from brand websites, in-store promotions (sometimes via text message) and in response to calls to action in mailers.  Marketers are able to discern between opens on mobile devices versus desktop or laptop PCs, providing further insight into where a consumer is located at the time of viewing.
  • Brand websites: This is where consumers can be encouraged to “register,” providing important details about themselves, their households and social networks to inform segmentation, message and offer relevance, and research.  It’s also where email marketing points to, so marketers can understand when a consumer moves from their email reader to a web browsing experience.
  • Social Media: Social media helps brands understand their most passionate consumers as well as those most influential and offering the greatest “reach.”  Knowing the identities and attributes of these consumers, and obtaining communication permission from them offers marketers a key resource to test messaging, trial or launch products, and expand the reach of digital marketing programs deployed within social and other channels.

These digital channels independently provide a means for brands to engage with their consumers, but when looked at together bring to light a “path” of sorts that marketers can use to target more relevant messages and offers at the right time and place to influence shopper behavior.

Cross Brand Engagement

Viewing possibly millions of consumers in this fashion across brands offers an unprecedented opportunity to begin directing shoppers to your product more frequently while not cannibalizing the marketing efforts of sister brands -- at the expense of less informed competitors.

Confidence is further enhanced when shopper location information is married with transactional sales data.  POS data is often made available to brands to support category management and supply/demand plans, but this anonymous data can also be related geographically to where known consumers shop or live and therefore allow marketers to show how their cross channel efforts affect actual sales.

With comprehensive cross channel behavioral data in-hand, questions begin to arise how to create more consumers within this segment most cost effectively, and maintain and grow existing relationships.  To those ends, understanding the optimal combination of channel interactions, their nature and sequence becomes critical.  This is a big data analytics problem Teradata solves for with a Discovery Platform featuring pre-packaged capabilities for assessing paths and assigning attribution based on any available data source no matter the volume.

Teradata’s recently announced Interactive Customer Engagement solution encapsulates these analytics with the activation required to create the type of on-going engagement across channels necessary to maintain hard won direct digital relationships.  Learn more about it here.

Gib Bassett

Related Posts

The Data and Analytics Implications of the Health and Wellness Trend

Posted on: March 15th, 2013 by Gib Bassett No Comments

 

Consumer preference for healthier choices is driving reactionary change in the retail and consumer products industries.  This was the theme at the seventh annual St. Joseph’s University Food Industry Summit held last week.

Statistics showing decade-by-decade increases in body mass index within the U.S. were juxtaposed against moves by retailers and food companies to meet escalating consumer demand for healthier fare.  Reasons for the move are essentially economic -- a large segment of American consumers with significant spending power are coming to respond to and purchase products that promise to counter obesity at the expense of products that do not (as illustrated by healthy product sales performance growth, shown by Ahold).

This is not an entirely new trend, as pointed to in this blog post where retailers and manufacturers alike seemed caught off guard by shopper patterns favoring the store perimeter (where fresher, healthier fare is usually found).  In that post, I wrote about how pre-empting this behavior could be argued as a function of richer consumer insights.  Problems with center isle store performance were raised by at least one speaker.

Moving up the value chain to the characteristics of the products themselves, innovation, reformulation and re-packaging were also talked about by multiple speakers as necessary to respond to changes in consumer demand.  Just as consumer insights could identify changes in shopper patterns, so too could these fuel new product development, testing and launch as described in this other post.

Underscoring the scope of data and analytics to support this “insight to innovation” idea was McCormick, which leverages a multitude of sources to inform their consumer insights, marketing and product-related functions.

McCormick’s Jerry Wolfe also touched on the emerging CPG e-commerce trend arguably best illustrated by P&G’s online store.  Nielsen presented a slide showing a distribution of consumer products by online sales activity and digital engagement.  The trend is growing, with Gartner reporting just yesterday in a new report “a significant jump in the use of digital marketing to support B2C e-commerce, with 23% using it in 2012 versus 11% in 2010.”

Even so, Wolfe pointed out that for most consumer food products, “it’s not about the commerce, it’s about getting on the list,” which makes sense given his comment that some 70 percent of households have dinner at home (not carry out) and choose among just 9 different recipes.  Breaking that code can be challenging, but like any business challenge, analytics can solve for it.

The importance of consumer insights shouldn’t get lost in equally important consumer relationship development, as talked about in this webinar.  Wolfe cited the 80/20 rule to explain how in the past just 20 percent of product choices were made outside the store – because in the past there was no digital, no social and no mobile, it was all about the store.  Now, some 80 percent of the decision making process happens outside the store, placing a lot of emphasis on knowing your consumers and shoppers as intimately as possible.

Gib Bassett

Related Posts

A “Who’s Who” of Consumer Goods Execs Recognize Teradata

Posted on: February 20th, 2013 by Gib Bassett No Comments

 

As described in this press release, Consumer Goods Technology magazine recently announced results of its survey of more than 150 consumer goods executives (certain to include representatives from leading companies).  For the seventh straight year, Teradata was recognized among the top 10 providers for technology excellence and customer satisfaction in Demand Data Analytics and Business Intelligence categories.  Respondents needed to be customers of a vendor before rating their satisfaction so you can be sure the results reflect real word experiences.

Teradata counts the majority of the world’s leading Consumer Goods companies among its clients.  Here is a sampling of stories about some of them:

Gib Bassett

Related Posts

Impressions from Coca Cola’s NRF Keynote

Posted on: January 14th, 2013 by Gib Bassett No Comments

 

The theme of this year’s NRF conference seems to be the growing economic influence of Generation Y, or Millennials, the 70+ million born between roughly 1980 and 2000.

Even before a talk by "Socialnomics" author Erik Qualman, during which he played a video mentioning that half the world’s population is under 30, Coca Coca’s keynote seemed to be a warning to any retailers yet to embrace the mobile and social behaviors of a demographic who shops unlike the Baby Boom generation.

First was noted that “market” at Coke means more than brand or consumer, and includes others such as retail customers.  From a data perspective, the statement illustrates the importance of making marketing decisions that take into account not just consumer or brand inputs, but also sales and production.

Coke’s oldest retail customer, Walgreens, was highlighted as an example where this cross functional view is helping address the needs of millennial shoppers.  Consumers are increasingly seeking fresher foods, yet often have few available outlets.  It’s impacting CPG sales and store layouts, as mentioned in this blog post.  So Walgreens is creating new store concepts featuring fresh selections.  It was said that providing choices for consumers -- to be helpful -- is driving these decisions.

Coke is playing a role via its Freestyle vending machines, placed in these Walgreens stores where shoppers can mix and match 125 micro doses of different flavors to create a custom drink.  Freestyle is an example of putting more control into the hands of consumers.  It’s the mobile and social nature of consumers that puts them in control of brand value, not marketers, said Coke’s Allison Lewis, SVP of Marketing North America.

Transparency and environmental concern were other attributes important to recognize among Millennials.  For Coke, this means placing calorie information prominently on packaging, working toward sustainable packaging, and water stewardship.

Coke’s Mel Landis, Chief Retail Sales Officer, summed it up best, saying their brands are the connections between consumer passions and retail customers.  For Millennials, those connections can only happen if CPGs take the necessary steps to develop a detailed understanding of them as individuals.  And that takes data.

Gib Bassett

Related Posts

Will 2013 be the year of the Social Data Platform?

Posted on: January 13th, 2013 by Gib Bassett No Comments

 

Market forces are challenging long-held beliefs among Consumer Packaged Goods makers that outsourcing data and technology other than production and manufacturing is the defacto way to operate successfully.  It’s no understatement that shoppers are exercising a new power that has some questioning the efficacy of traditional sales, brand and category management as the means to drive volume, margin and growth.  Especially as retailers engage in co-opetition with their own innovative private labels.  The question is: what to do about it?

Some are making public statements about their desire to achieve greater intimacy with consumers and use the relationship to create and build brand affinity and advocacy.  Gartner and others have published research showing this to be the case, but most note that the task is easier said than done.  Brands simply haven’t moved past mass marketing and one time promotions that do little to create, build and leverage the consumer data scattered across the path to purchase.

From opting into email or mobile communications, to registering on a website or expressing affinity by liking a brand in social media, most of this data resides outside the institutional knowledge of the CPG business.  Remember too, that many attitudes, preferences and demographics are also often expressed during these interactions and could transform a simple consumer touchpoint into a crystal clear picture of an individual you can interact with and influence over time.  You could even relate these actions to specific trade promotion investments based on proximity of a consumer to a store or by using tactics like the mobile check in.

Some analysts I’ve spoken to recently say CPGs should at a minimum understand their top one million consumers – those who engage with brands via multiple channels, who readily volunteer details about themselves and their family in hopes of developing a mutually beneficial commercial relationship, and who gladly advocate for the brand within their personal and social networks.  This data could potentially be valued on the balance sheet as a tangible asset.  It wouldn’t be possible though if it were outsourced and scattered among a web of third parties.

Making a break from the long-time relationships brands have with their agency and marketing services partners in pursuit of such a vision is hard to fathom when you consider the lack of skilled analytics professionals employed in CPG.  Analytics after all unleash the value of data.  Analyst firm IDC survey research suggests as much, saying it contributes to escalating outsourcing, shadow IT, and the resulting application and data silos.

Gartner says IT’s relevance depends upon partnering with marketing and its agency partners to address the dual challenges of developing a consumer data asset while supporting the business as it relies on third parties for all manner of services (be it marketing services or analytics).  Deloitte recently suggested a solution to this problem, putting forth a concept CPGs would be wise to explore with firms expert in data management such as Teradata – the social data platform:

 

This excerpt is from “Anticipating Socialytic Disruption” (Deloitte, November 2012).  While the report speaks to ways social media is changing the analytics landscape, it more broadly suggests how analytically challenged and consumer-relationship-poor CPGs can attack both problems – while maintaining and creating greater value from their existing agency partner relationships.  Particularly if everyone is operating off of one version of the truth and has access to current, accurate and detailed data representative of the entire enterprise, not just consumer marketing.

“Carefully managed access” to integrated data is a science unto itself, and at a time when non-traditional data sources are as important as traditional ones in the pursuit of analytic insights, Teradata is uniquely positioned to help CPGs succeed with the best data and analytic consultants in the industry.

Gib Bassett

Related Posts

Showrooming a Retail Challenge, Manufacturer Opportunity

Posted on: December 21st, 2012 by Gib Bassett No Comments

 

Shoppers comfortable and capable of making purchases from different touchpoints are challenging retailers to create value in new ways.  These transient, omni-channel customers are increasingly employing mobile devices to engage in comparison shopping while in store, then leaving to buy elsewhere when a lower price is available. 

The behavior is called “showrooming,” and was the topic of recent research from Teradata Aprimo in collaboration with Forrester Research.  According to the findings, all manner of consumer goods are affected:

“Showrooming isn’t just for big ticket items – while consumer electronics are the most popular items price-checked in store (39 percent), groceries (37 percent) are the second-most researched and apparel/footwear (33 percent) came in third.”

To combat the phenomena retailers are moving to create richer customer experiences (in the form of mobile apps oftentimes) based on data and analytics, all aimed at keeping shoppers in-store through price matching, loyalty programs and promotions.  Manufacturers also have a stake in all this, based on research cited on eMarketer recently showing that when a mobile shopping experience goes wrong, the consumer blames the brand, not the retailer:

“The most prevalent attitude toward in-store mobile technology among all age groups was that when mobile technology didn’t work, consumers blamed the brand.”

 

 Coupons the Original Showrooming

Manufacturers have been dealing with a flavor of showrooming all their own for years – in the form of coupons.  In a perfect world coupons would not be necessary and shoppers would buy based on brand value.

Manufacturers are trying to move in this direction as they seek to establish the type of one to one connections with shoppers that retailers have had to themselves for years.  It’s a challenging task even as digital marketing investments by manufacturers increase; consider an Accenture study of Consumer Goods’ website visitors which found that most are coupon seekers, and are actually less profitable than consumers who never visited the website before making a purchase.

To address price-only-buying decisions, some, like Procter & Gamble and Kraft, are joining retailers and partnering with mobile apps like ShopKick which offers a mobile reward and loyalty program based on the now common “check in.”  Recent Gartner research calls this “gamification,” and says it’s an effective engagement mechanism for manufacturers to establish and nurture direct consumer connections and brand loyalty.

Other new Gartner research describes “context-aware promotion” as the future of retail-manufacturer collaboration, where each party works together to establish the technology, data and analytics foundation for targeting individual shoppers with personal and relevant offers in real time.  Such a scenario would seem to be a showrooming killer if done well.

Manufacturer Leverage

What can manufacturers bring to the table?  For one, the consumer data and communication permissions held by agencies (especially digital ones), who have conducted product launches and promotions for brands for years.  All of this data, in addition to tapping brand social media sources like Facebook and Twitter, when sorted through and normalized across brands, can lend insights into consumers and shoppers that retailers lack.  Such an integrated consumer insights basis could also be informed by and fuel the aforementioned third party loyalty check-in services.

Direct consumer connections and the insights they generate represent the leverage manufacturers can bring to their retail partners to meet the needs of today's omni-channel shoppers.  With retail-manufacturer relationships more than ever characterized by co-opetition, where collaboration happens more out of necessity than choice, fact-based analytics and insights give manufacturers the best chance to play a leading role in the new shopping landscape.

Gib Bassett

Related Posts

How Adaptive is Your Product Innovation and Launch Process?

Posted on: November 27th, 2012 by Gib Bassett No Comments

 

Creating and launching new products is the most widely accepted path for Consumer Goods companies to grow their businesses.  Yet, it’s among the most challenging to do successfully.

Less than 1 percent of more than 11,000 new consumer products introduced between 2008 and 2010 yielded cumulative yearly sales of greater than $50 million.  The majority achieve no more than $7.5 million in sales in a single year.  Just the marketing costs averaged $15 million for those 11,000+ product introductions, to say nothing of R&D, production and distribution.

Quantify the additional costs to brand equity and shopper good will when a product fails, as well as the opportunity to focus resources on winners instead, and the total costs are considerable.

The upside to solving this problem could be even more considerable, however.  Imagine if success rates were improved by just a few percentage points.

In spite of this opportunity, innovation has been in decline.  The number of innovative new product initiatives has been falling right along with investment in R&D as a percentage of sales.

Why do you suppose that is?  Clearly the effort is akin to battling some unseeable and unknowable force making new product innovation and launches completely unpredictable.  The safest path lies with product extensions within existing categories, but the payoff pales in comparison.

To attack this problem with confidence and predictability takes detailed insights at every stage of product innovation and launch – an Adaptive Product Innovation and Launch Process lacking in most Consumer Goods organizations.

Viewed as shown below, the process can be broken into different dimensions. 

How would you classify your organization’s position along each dimension, where on the outermost edge lives the most detailed and diverse data?  Moreover, can you put the data to use to inform each phase at the speed of today’s consumers and shoppers?

Market

How well do you know your target market?  Do you base decisions on historical results and long held beliefs?  Or are you instead employing voice of customer methods where data from social media and the social web melds with syndicated and other sources to inform target market insights?

Consumers

How well do you know your consumers?  Can you identify the shoppers among them?  What about the attitudes, opinions, demographics and preferences of both?  Or the 2 percent who account for 80 percent of volume in year one of a new product introduction?  Do you have a line of communication to them, based on permission?  Or, like many of your peers, is consumer marketing data locked away in agency and third party marketing services systems?

Differentiation

What product attributes do your consumers and shoppers care most about, and which need elevation to inclusion in design, packaging, shelf position and marketing decisions?  Do you have a line of sight into competitive intelligence beyond syndicated data providers and panels, to new methods such as crowdsourcing, social media and the web?

Pricing

Is pricing set infrequently and based on old assumptions or infrequently available data?  Does trade promotion more often than not take the form of price reduction?  Or can you instead observe sales relative to price by outlet, by SKU, and make adjustments to optimize sales and volume without resorting to discounting?  The answer depends on whether you have access to, and embrace, the detailed sales data available from nearly every retailer today.

Supply

Do you plan for production based on historical patterns and generally agreed upon assumptions?  Given the costs involved in researching and producing new products, the situation begs for a plan based also upon knowing the expected consumption and referral behaviors of the 2 percent of shoppers who determine new product success.

Demand

The ability to sense demand in market and adjust supply, price, shelf position, packaging, messaging or the product itself has been shown to turn around a failed launch and produce a winner.  That degree of visibility, in a timely and actionable manner, is only possible when every prior dimension is accounted for at a detailed level.

With marketshare under attack from innovative private labels while retailers continue to demand ever escalating trade funds, it seems incumbent upon Consumer Goods executives to embrace an Adaptive Product Innovation and Launch Process.

Gib Bassett

Related Posts

Partners 2012 Theater Presentation: A Challenge to the Consumer Goods Industry

Posted on: October 29th, 2012 by Gib Bassett No Comments

 

Last week the Teradata Partners User Group Conference provided a theater area within the exhibit hall for industry presentations.  My session for Consumer Goods was titled, “Challenging the Product Innovation Status Quo with Integrated Data.”  The audio was recorded then overlaid on the slides so you can view and listen to the replay in the following video.

The abstract for the session was:

For branded Consumer Goods Manufacturers, growing the top line has become a priority but remains challenging given global economic malaise and price sensitive consumers.  Differentiation, margin and ultimately growth can be found in innovative new products, yet successes are few and far between.  An integrated data foundation is an essential element in developing and launching innovative products that succeed in the marketplace.  This session will explore trends driving Consumer Goods executives to pursue an integrated data foundation that not only supports innovation, but also fuels critical insights at the “speed of business” for the entire enterprise.

If you’d like a copy of the presentation shoot me an email.

Gib Bassett

YFP6H4US7D9P

Related Posts

Making the Big Data business case for consumer goods

Posted on: October 11th, 2012 by Gib Bassett No Comments

 

Last week at a National Retail Federation (NRF) conference Gartner presented “Is Big Data Real in Retail?” which included research showing how various industries planned to leverage big data.  My peer at Teradata for the retail sector Michael Day was kind enough to share the presentation.

As shown in the accompanying screen grab, the retail industry is by far and away expected to harness big data more so than other industries, especially manufacturing.  Why should this set off alarms in the heads of consumer goods executives?

Quite simply it comes down to two things: one, harnessing big data is already shown to provide competitive advantage to those businesses willing and able to tackle the challenge and two, retailers or more generally trading partners, are at the heart of nearly every challenge facing branded goods manufacturers.  Consider that:

  • CPG companies are growth challenged and top line growth traditionally comes from new products, a weak spot in the industry as a whole.  Retailers are behaving more like brands every day as they invest in innovative private label products to grow their businesses.  That market share comes at the expense of national brands.
  • While retailers increasingly behave like branded goods companies, they continue to expect manufacturers to fund trade promotion.  Analysts cite this expense as the second highest to cost of goods sold for manufacturers, who when surveyed claim to lack confidence in the effectiveness of this spend.  Critics charge that trade funds are myopically focused on the store (not the shopper’s path) and emphasize margin-killing discounts over value.
  • When CPG companies do develop new products or line extensions, most fail to meet expectations.  Marketing costs alone average $15 million and many are pulled back when retailers aren’t seeing shelves clear fast enough.

Now consider how big data, and big data analytics, could be employed against these three conditions in ways that maintain trading partner relationships, grow sales and margins, plus establish the consumer connections needed to compete over the long haul.

  1. Borrow a page from retailers -- who seek to cross and upsell products to maximize market basket value -- and do the same with products in your portfolio, or by partnering with other branded goods companies.  How?  Implement a system to obtain historical and on-going consumer marketing data from every agency and marketing services provider.  Then build an integrated and living consumer profile across brands including website/e-commerce activity, call center and consumer affairs data, communication permissions, social media profiles and influence data, along with demographics and household information.  Next bring into the fold point of sale (POS) data from trading partners to execute measurable cross-brand marketing strategies based on path to purchase analytics.  As opposed to launching weak product extensions that just eat into existing categories, taking advantage of the data at your disposal today to market smarter can be a real growth strategy.
  2. The same consumer-centric data foundation could then be used by sales teams to negotiate and target trade promotion funds in smarter ways, such that monies fund value-based programs at the right time and place along the path to purchase.  Uncover unknown and often purchased product bundles and, if necessary, partner with complementary manufacturers to create unique promotions, pricing or packaging.  Some call this shopper marketing; whatever you call it, the fact consumers and shoppers are mobile savvy and active online and in social media means rich data sources are available to move away from discount programs to ones that focus on value.
  3. Nielsen research shows brands give up when products don’t meet demand expectations, basically throwing in the towel on considerable R&D and marketing investments.  They also note exceptions to this have happened when brands work diligently in-market to identify consumer and shopper reaction to new products and adapt value propositions, pricing, packaging or the product itself and in the process reap considerable rewards.  Is there any doubt that possessing rich consumer insights, direct consumer connections, and sales and pricing data can help brands achieve this “fail fast, adapt, win” mantra with new product launches?

The effort to create the integrated data foundation to support these actions ultimately serves a higher purpose that’s at the core of what consumer products companies are all about – as pointed out in an October 2012 McKinsey Quarterly article titled “Designing Products for Value.”

“By encouraging more focused collaboration among multiple functional groups (notably marketing and sales, operations, engineering/R&D, and procurement), these leaders are combining deep insights about customers, competitors, and supply bases to strip out costs and amplify what customers truly value.  The results—including better products, happier customers, higher margins, and, ultimately, a stronger ability to innovate—should serve these organizations well in years to come.”

Achieving this state leveraging Big Data can seem intimidating and so it helps to view it as a journey that starts with a clear business case.  Some want to begin by grasping the extent of the big data available or in need of governance as described in this recent post.  Others wish to pilot big data analytics against a set of already identified data to uncover immediate high value insights.  No matter where a manufacturer begins this journey the business case for making a move now should be pretty clear.

Gib Bassett

Related Posts

Can Big Data governance save manu IT from an uncertain future?

Posted on: October 10th, 2012 by Gib Bassett No Comments

 

Gartner’s recent report titled, “Survey Shows Consumer Goods Manufacturers Must Embrace Digital Marketing to Maximize Impact,” is a call to action for digital marketers to partner with the larger marketing organization to ensure relevancy and add value.

Among the report’s recommendations are for digital marketers to help the business “extend their strategic horizons beyond the short-term economic disruptions and focus on technologies and business processes that enable them to anticipate and influence demand among an increasingly sophisticated ecosystem of retail customers, consumers and shoppers.”

The challenge for Consumer Goods IT organizations amid this situation is also adding value, particularly given the current and growing investment by the business in “shadow IT” --  cloud software and services sourced without the involvement of IT.  It’s no revelation that among Consumer Goods companies, outsourcing data and applications to third parties is an extension of the agency and syndicated data provider relationships employed by marketing and sales organizations respectively.

Coming at this issue from a different perspective is IDC, who in a briefing recently suggested investments in shadow IT and a dearth of analytic talent are among critical challenges facing manufacturing IT organizations.  Especially in companies where IT is aligned mostly to ERP and directed to limit cost, it has little mindshare available to help the business address the equally critical objective of driving growth.  The “business” therefore has no choice but to look outside for help.

IDC hypothesized a future state for manufacturer IT where it transforms into an internal services unit that competes with third parties on cost and SLAs – a situation that probably favors more nimble outsiders focused on specialized and rapidly innovating technology.

To avoid such a gloomy future, IT would be wise to take Gartner’s advice for the digital marketer -- “become experts in digital marketing technologies to gain credibility and trust with marketing,” and start with companies like Teradata.

Working with Teradata sooner than later makes even more sense for IT when you consider the issue of data governance in the era of Big Data.  IT has an opportunity to adapt its data governance approach to help digital marketers take advantage of the volume and diversity of data being accessed and generated through cloud applications and services.  It’s something I mentioned in this BeyeNetwork interview and can get IT a seat at the table today.

The idea was brought home in this statement from a recent Information Management article “Why Doesn’t Governance Lead to Data Freedom?”

“Big data has brought to the forefront the age-old conflict between the business and IT.  The business needs speed and agility and wants to get the job done.  It does not want to be hampered by process, development timelines, and certainly does not want to hear ‘no.’  Data governance needs to evolve to develop policies that are not just about what you can’t do, but what you can do.”

Manufacturing IT can play a critical role in the success of digital marketing -- and all functions -- by engaging the business to co-develop and manage flexible data governance that exposes the value of Big Data to all the applications and analytics within and outside the four walls of the company.  In the process, those “shadow IT” investments can be brought to light and leveraged in ways not otherwise possible.

Gib Bassett

Related Posts