Accenture: Commercial analytics insights CPG Companies 27-7-12
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Accenture: Commercial analytics insights CPG Companies 27-7-12

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A fully integrated analytics operating model can help consumer packaged goods (CPG) companies focus commercial analytics resources on high-value processes to grow market share and sustain profit......

A fully integrated analytics operating model can help consumer packaged goods (CPG) companies focus commercial analytics resources on high-value processes to grow market share and sustain profit margins.

Market and economic uncertainty is making it difficult for CPG companies to achieve sustainable growth. Value-driven consumers are more demanding than ever before, and retailers are increasingly pushing private labels and looking for ways to control the consumer relationship. Additionally, “big data” has left many marketing and sales organizations with an information overload, yielding little insight into how to win consumer loyalty. This uncertain environment requires CPG companies to make faster, better-informed commercial decisions and take concrete action to improve market performance.

In this point of view, Accenture outlines an approach that can help CPG companies improve their commercial analytics capability to generate significant value.

June 27, 2012

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  • 1. Moving from Insights to ActionBuilding a Competitive Advantage with Commercial Analytics in CPG
  • 2. 2
  • 3. Consumer packaged goods (CPG) companies level means that analytic solutions or 1. Developing a cross-functional,are under pressure from all sides, capabilities reside in pockets across the integrated analytics vision: CPGstruggling to achieve sustainable growth organization with no strategic framework manufacturers need an integratedduring significant market and economic or principles to coordinate and prioritize commercial analytics vision anduncertainty (Figure 1). Mobile, value-driven them. This whack-a-mole approach allows processes aligned around the shopperconsumers are more demanding than ever, point solutions and data sets to proliferate to enable consistent decisions throughand their tastes and paths to purchase as potential synergies are ignored. The lack the company to maximize results.shift more rapidly, making it challenging of integration leads to incremental gains Cross-functional analytics enable thefor consumer goods manufacturers to stay but not leaps in performance or insight. organization to balance competingrelevant to the shopper. CPG manufacturers Finally, insufficient analytic talent, a lack objectives and priorities to increasealso feel increased pressure from retailers of rigorous value realization processes, and overall impact for the company.that push private label products and look subpar technology enablers also undercutto control the consumer relationship; the impact of analytics. 2. Prioritizing analytics to create value:witness Wal-Mart’s “Get-on-the-Shelf” Focusing analytics on high-valuecrowdsourcing initiative to put new, Continuing on this path is far too expensive commercial processes, specificallyconsumer-requested products in its stores. and time consuming for companies those related to sensing and satisfyingAdditionally, “big data” has left many that need new avenues of growth and demand, will support market sharemarketing and sales organizations with a higher efficiency in their enterprise and growth. Using consistent criteria andbad case of information overload but too commercial functions. Consequently, CPG lenses to prioritize market-relevantlittle insight about how to win consumers’ companies that Accenture serves are analytic investments will allowloyalty. increasingly concerned about how to make companies to move the needle on sales. the most of their investments in analyticsThis uncertain environment requires and build analytic capabilities. That concern 3. “Operationalizing” analyticscompanies to make faster, better-informed is well placed: Our research into high throughout the enterprise: Executivescommercial decisions and take concrete performance in the CPG industry revealed need to embed analytics throughoutaction to improve market performance. that having analytical capability that drives the enterprise and improve timelinessEmploying analytics solutions can make actionable insight is a differentiating, of insights and accessibility to themsuch decisions and actions easier, yet distinctive capability of high performers by decision makers. Analytics bymany CPG companies struggle with how in the sector.1 More importantly, our themselves don’t generate value. Itto execute an analytics strategy that recent survey of executives responsible takes a governance structure, processes,clearly generates value. Our recent survey for analytics in CPG companies revealed metrics and technology support toof how CPG leaders use analytics found that the majority of companies are not facilitate wider use of analytics and tothat while the majority of respondents prioritizing analytic capabilities consistent expedite movement from analysis andthought they were analytic “leaders,” only with where Accenture typically sees the insights to actions that connect with12 percent rated their ability to execute most value (price, promotion, assortment, shoppers and result in growth.as “exceptional” (see sidebar). The issue retail execution). Given all the challenges CPG companiesis figuring out why that gap between Clearly executives are invested in and are facing the timing could not beintention and execution exists, and then motivated to use analytic solutions, but better for them to proceed on all threefinding ways to close it. need to refine their execution to derive of these fronts.Internal impediments frequently prevent maximum impact. This report details three Executing an analytics strategy thatcompanies from reaping the full benefits actions companies should consider to integrates and prioritizes analyticof analytics. A lack of sponsorship and improve analytic capability and impact. efforts across the enterprise, and buildsgovernance of analytics at the enterprise the capabilities and infrastructure to operationalize analytics, will allow CPG companies to extract more value from investment in analytics, and become more responsive and relevant to consumers. 1 Shaping High Performance in Consumer Goods, http://www.accenture.com/us-en/Pages/ insightachieving-high-performance-food-non- alcoholic-beverage-industry.aspx. 3
  • 4. Figure 1. A Tough Environment for CPG: Decisions and Actions Requiring Integrated Analytics Strategic Commercial Planning Digital Consumer Interaction Sales Force Effectiveness • How do we focus on the variance between • How can we effectively interact with the • Why is our sales volume and plan vs. actual and take specific actions? new digital consumer across different profitability down? • How does taking actions in the field and digital channels? • How do I achieve my sales targets in corporate change our financial forecast? • How can we achieve relevance and emerging markets? • How can strategic commercial planning increase conversion rates in our digital • How do we collaborate between improve profitability? marketing activities? corporate and field on actions such as • What is the role we need to play in the contracting deals, monitoring metrics, social media environment? promotional programs, pricing, etc.? • What is the business case to start direct • What actions must we take to improve channel (eCommerce) operations? volume and profitability? Marketing & Trade Spend • What marketing/promotional mix do we have to choose from? • In what way can we prioritize our Shelf to Cash trade spend allocation? • How do we manage product supply • How do we optimize our spend across issues on an exception basis? current and new brands/products and/ • What actions must we take strategically or geographies to maximize the ROI? Executive Management and in the field to improve on-shelf availability? • What performance metrics should • How do we use the historical data to we focus on? get a better demand and supply chain planning process? Trade Promotion • How do we understand causes of Effectiveness performance issues? • What are our top- and bottom-performing brands and promotional product groups? • How do we become more agile Retail Partner Driven • What are the causes of poor promotional in adapting faster to changes in performance? • How can we manage periodic consumer and shopper behavior? changes in the terms of the deals? • What actions can we take to make changes to promotional strategies like • Are traders satisfied with timeliness • What actions should we take to pricing, display, etc. to get sales lift? of payment? improve performance? • Is it possible to reduce claims for customer dissatisfaction? • How can we rate the effectiveness of our: - Marketing - ales force S - rade programs T - upply chain S©2012 AccentureAll rights reserved.4
  • 5. Accenture’s Research inWhat Makes AnalyticsWorkAccenture recently completed a globalresearch effort to understand how CPGcompanies are using analytics, wherethey are in their journey to make theirorganizations more analytic-driven, whatresults they have seen to date and thefocus of future investments. We surveyedover 75 CPG executives with responsibilityor oversight of analytics in organizationswith revenues of more than $2 billion. Theresults of this survey were published in thesummer of 2012 in the report CommercialAnalytics: Using Insights to Take Action.Figure 2. Analytics Maturity Curve: The Analytics EvolutionHigh performers change the game by understanding what has happened and what will happen. Migrating fom What Happened to What’s the Best Possible Outcome What’s the best that can happen? Optimization Predictive Analytics What will happen next? Predictive (the “so what”…and the “now what”) Modeling What if these trends continue? Forecasting Future orientated and source of competitive advantageCompetitive Statistical Why is this happening? AnalysisAdvantage Alerts What actions are needed? Descriptive Analytics Query Drilldown Where exactly is the problem? (the “what”) Ad Hoc Reports How many, how often, where? “Rearview mirror” – provides foundation and insight Std. Reports What happened? Degree of Intelligence©2012 AccentureAll rights reserved. 5
  • 6. 1. Developing a Cross-Functional,Integrated Analytics VisionThe Costs of Taming the “You’ve got to think Yet CPG companies do not have the resources to undertake all possibleData Monster about big things while analytics; they have to focus efforts on theFeel like too much time and money are you’re doing small right type of analytics. Most CPG companies already have significant descriptive analyticspent looking at or searching for data tobetter manage your business? You are not things, so that all the capabilities—analysis that accurately depicts what happened in a specific market,alone—not by a long shot. Consider that: small things go in the channel or consumer group. Far fewer have• Information workers waste 3.5 hours per right direction.” advanced analytics that detect or predict an unmet consumer need (Figure 2). Oneweek on searches that don’t yield useful - Alvin Toffler, author and scientist objective for CPG companies is to be moreinformation. Assuming an average salary strategic and make conscious decisions toof $60,000, the cost of ineffective search It’s easy for companies to lose sight of the use analytics that align to their strategyis $5,251 per worker per year. For 1,000 forest for the trees when developing and and support the known drivers of actualworkers the cost is $5.25 million.2 executing an analytics strategy. Toffler’s business value. advice remains relevant; CPG companies• The big data market is expected to grow need to keep the end goal—generating Companies are clearly struggling withfrom $3.2 billion in 2010 to $16.9 billion in business value—in mind when making coordinating various analytic efforts,2015 according to one firm. This represents choices and decisions about the types and and few have an integrated analyticsa compound annual growth rate (CAGR) of volume of analytical efforts they undertake. vision grounded in business value.40 percent or about seven times that of the While proliferation of analytics effortsoverall information and communications It is easy to get distracted from that end is expensive, the conundrum is thattechnology (ICT) market.3 goal because the demand for analytics is companies are seeing some incremental increasing from within and outside the• Fifty-three percent of large retailers value in one-off analytic efforts, so they company walls. Amazon and Google useindicate that customer analysis is difficult question if integrating analytics is actually predictive analytic capabilities to servedue to enormity of data from different needed. consumers every day, and consumerschannels.4 expect the same customer-centricity We believe that it is worth the effort. From from CPG manufacturers. There is also an organizational perspective, the lack of increasing internal demand for analytics integration and prioritization of analytics due to growing financial oversight and risk efforts weakens the ability to make management requirements. In short, the consistent decisions that maximize results demand and potential to use analytics are and resonate with the needs of shoppers expanding, driven by the rapid explosion of and consumers. There are also funding and data, cheaper processing power available sponsorship issues: Who is driving the through the cloud and the desire to not fall integrated vision—the supply side, demand behind competitors. side, finance? And where does the funding come from? To address the cost and organizational issues, we believe that developing an2 © Copyright IDC. Source: The Hidden Costs of Information Work dated March 2005. integrated analytics vision will multiply the value generated from analytics investments,3 © Copyright IDC. Source: Worldwide Big Data as well as streamline analytic operations. Technology and Services 2012-2015 Forecast.4 Sahir Anand, VP & Principal Analyst Aberdeen Research, Key Technologies Will Help Develop Success Through Customer-Centricity, 2011.6
  • 7. A Lot of Analytic Activity, in Too Needed: An Integrated AnalyticsMany Places Vision to Generate ValueA lot of analytic activity is driven by the So the good news is that companies aredesire, or even need, to keep up with “big using analytics more and more, but effortsdata.” Companies have more data than ever, remain fragmented and largely independent.in all kinds of structured and unstructured In such an environment the potentialforms. The combination of traditional business impact of analytics is diminished—channels and sales data, syndicated data from any insights are viewed through a small lensexternal providers, and a tsunami of social rather than one that would capture a wide-media metrics and data streams has resulted angle, panoramic view.in an abundance of data, perhaps more thancompanies even need. What’s needed is an integrated vision for analytics so that priorities can beManaging so many data streams is difficult, set and investments made taking intoand made harder still when data and the account and balancing various functions’analytics applied to them are fragmented objectives to optimize business results.across different functions and not readily The same holds true for data collection,visible or usable by others. It is not harmonization and management. The wholeuncommon for teams in the same company— of commercial analytics requires a shiftor even brand teams working from the same in mindset from internal to the use andoffice—to purchase similar data sets from the integration of internal and external data.same provider and not realize it. Different Integrated, accessible data will provideteams might ask for similar data in slightly a uniform foundation for analysis—onedifferent formats. The results are higher costs version of the truth—thus avoiding theand a lot of effort put into data compilation “apples and oranges” problem when twoand harmonization, not analysis (see sidebar). teams use different data sets and different analytic applications. Figure 3 identifiesA similar challenge exists with uncoordinated the components of an integrated analyticsanalytic initiatives. At any given moment model that can be leveraged by commercialmost CPG companies have several analytic functions.efforts underway. Some are focused ondata management, others are focused oncommercial reporting and still others arefocused on more advanced analytic areassuch as pricing. There are operational analyticefforts as well, documenting the efficiency ofmanufacturing and supply chain processes.What usually doesn’t exist is synergy amongthem. A recent report found that only 30percent of marketers feel they integrate datafrom sales, service and marketing into a singlemanagement framework. 55 Forrester Research Inc., Global Marketing Leadership Online Study: Four Steps to Tackle the Shift to the Customer Life Cycle, (June 2011). 7
  • 8. Figure 3. High Performance CPG Analytics Blueprint Operational Excellence Integrated Analytics Platform Shopper Analytics Sell to Shopper Shopper Experience & Service Brand Portfolio, Price & Channel Retail Digital Assortment Marketing Promotion Management Execution Merchandise & Sales Execution Analytics & Space Analytics Analytics Analytics Analytics Analytics Marketing & Advertising Execution Commercial Reporting Web & eCommerce Next Generation Demand Data Repository Loyalty Management Evaluation Integrated Demand Data Data Integration & Harmonization Supply to Shopper Consumer Retailer Data ERP Data Trade Data Forecasting & Replenishment Data Mfg. + Retailer Point of Sale Loyalty Data Deals/ Shipments Contracts Store Brand & Item Innovation Transactional Log Shopper Segmentation Inventory Deductions/ Facilities Management Syndicated Data Invoice Payments Social Data DSR Provider Data External Data Internal Data©2012 AccentureAll rights reserved.An overriding goal is for company leaders 1. What is the business need for the With an integrated vision of datato develop an integrated commercial vision analytics proposed? How does it enhance management and analytics, efforts canfor analytics, one that coordinates analytics or complement what we are doing be rescaled appropriately, saving time andacross the enterprise and with external already? effort. Articulating a clear strategic focuschannels and data providers. This exercise for analytics, as well as adopting a commonnot only yields cost efficiencies by revealing 2. How would investing in data or analytics approach to evaluating and shapingand eliminating duplicative efforts, it has solutions lead to a better understanding analytic activity, can impose order on thethe added benefit of forcing managers to of consumers? chaos that exists in many companies.focus on goals and results of analytics, 3. Are there interdependencies acrossnot data compilation. Further, companies functions, providing the potential tocan better balance their use of descriptive leverage analytics broadly?analytics of historic business results withmore predictive analytic insights that 4. What alternative data sources exist, anduncover future market opportunities. what are the pros and cons of each?Developing an integrated analytic vision 5. Have we investigated whether the datathat is grounded in value-generating exists in-house already?solutions requires leadership to answerquestions such as:8
  • 9. 2. Prioritizing Analytics to Create Value“The right information consumers’ purchase aspirations. To do so CPG companies need to focus analytics The largest opportunity may be in applying analytics to sales and customer processes at the right time can squarely on data and processes tied to that have traditionally relied more on art change your life.” demand generation and fulfillment. and instinct than science. Today, we can build on the experience of executives with Prioritizing Analytics to Respond to greater and more consistent application of– Stewart Brand, Demand Signals and Increase Sales analytics throughout marketing and sales technology innovator and futurist So what to focus on first? In our experience decisions to improve results. For example,With so much data and so many analytic brand teams should use analytics to optimize investments in analytics should be prioritizedsolutions available it can be difficult to the marketing mix, as well as assess in- based upon value creation potential, withcut through the noise and figure out what store execution, digital strategies and sales analytics shown to increase sales and/or profitdata and analytics really generate value performance. Putting processes in place to margins getting top billing. The value tree inand grow share. Ideally, companies would ensure the flow of information and insight Figure 4 reveals the potential performancefocus on analytics that are shown to across and within commercial capabilities improvement that analytics can deliver whenidentify products that consumers want, the such as those detailed in Figure 5 will focused on commercial activities.marketing that works best to engage them, expedite decisions and actions to deliverand the most productive channel to satisfy significant business benefits.Figure 4. Analytic Capabilities and Benefit Ranges Financial CPG Value Analytic Potential Lever Drivers Capabilities Benefit (%M)* Price Pricing • Pricing & Profit Analytics Marketing Effectiveness • Marketing Return on Investment Sales Media Effectiveness • Media Mix Optimization Campaign Effectiveness • Campaign Investment & Tactics Optimization Volume • Consumer Segmentation & Profiling $200 - $700M (2-7%) Portfolio & Mix • Assortment Optimization Space & Adjacency • Demand Forecasting & Replenishment Analytics • Commercial Intelligence Channel Partner Performance • Broker Performance Management • Distributor Performance Management Promotional Execution and • Sales Force Optimization Analytics Program Compliance • Commercial Intelligence Discounts and Allowances • Assortment Optimization Discounts & Allowances Supplier Performance • Supply Chain Optimization AnalyticsCost of Sales $18 - $180M (0.1-1%) Material Costs Raw Materials • Commodity Pricing Analytics Conversion Costs Manufacturing • Manufacturing Excellence Analytics Distribution Transportation • Assortment Optimization Warehousing • Cost to Serve AnalyticsOperating Costs • Sales Force Optimization Analytics Sales Force Sales Force • Employee Performance Analytics • Trade Promotion Analytics $5 - $25M (1-5%) Trade Spend Efficiency Promotion Consumer Promotion • Marketing Analytics • Digital Analytics IT IT Cost Avoidance • Reduced Redundancy in Data/Tools, Managed Service R&D Effectiveness • R&D Discovery Analytics R&D • Innovation Diagnosis & Optimization • Lean Six Sigma Process ImprovementWorking Capital Inventory Inventory • Forecasting & Replenishment Analytics $12 - $18M (2-3%)©2012 Accenture * Based on a representative consumer goods productsAll rights reserved. manufacturing enterprise with an annual T/O of $10BN 9
  • 10. Consistently applying analytics tosales and customer processes anddecisions across the company—from theboardroom to sales force—represents thelargest opportunity to improve marketperformance, and investments in theseanalytics should be prioritized accordingly.10
  • 11. Value Creation from We believe analytics could quickly benefit CPG manufacturers in each of these areas. 7. Retail Execution Analytics. Analytics can help identify and drive consistentDemand Side Analytics 1. Shopper Analytics. Analytics can help execution of the highest value in-store activities, and also promote efficient andDemand signal repository (DSR) solutions manufacturers gain deeper shopper reliable collection of retail performanceand demand signal analytics use rich item/ insight, identifying what high value data. A flexible toolset of analytics canday/store-level data and distributor data to consumers buy, their intent and how to enable manufacturers and retailers toguide and direct manufacturers, suppliers increase share of basket. These insights in optimize merchandising activity.and channel partners with precision alerts turn can guide both product developmentand exception flags. Robust inventory and and promotional allocation mix. In addition to sales processes, applyingsupply chain analytics that generate real- analytics to supply chain activitiestime insights and reporting can help CPG 2. Brand Marketing Analytics. can improve shopper relevancecompanies avoid the waste and inefficiency Brand marketing analytics can help and performance. While many CPGthat result from excess inventory, organizations understand which products manufacturers have developed DSRsinaccurate forecasting and irrelevant are most relevant to the consumers, of some sort, the analytics used inassortment. Several large CPG companies become more efficient in managing conjunction with DSRs may not be ashave quantified the benefits of having spend, focus campaigns, manage brand robust as those applied elsewhere inadvanced DSR solutions: equity, and ultimately increase consumer the organization. That’s unfortunate, awareness and drive trial and continued because superb demand-side analytics of• Unilever saw a 40 percent improvement consumption. replenishment and inventory optimization,in 7-day forecasts.6 or commodity price forecasting, can have a 3. Digital Analytics. Just as with traditional• Del Monte reduced inventory rates by campaigns, analysis of digital marketing significant flow-through effect on overall27 percent in two years, decreasing pallet and sales initiatives as well as consumer- performance. Companies that have focusedspace requirements in retailer distribution generated content can help companies their analytics investments on demand arecenters by up to 65 percent.7 find the right mix of promotional and reaping substantial rewards (see sidebar). informative content to engage consumers with relevant messages and offers. To standardize and 4. Portfolio, Assortment and Space optimize use of Analytics. Offering the optimal portfolio analytics across depends upon deep understanding of shopper needs and analyzing in-store the value chain, activity. This optimization includes retiring products that don’t meet needs and companies should developing products that address gaps. consider centralizing 5. Price and Promotion Analytics. the management Analytics can help manufacturers become of analytics, just as much more sophisticated in managing pricing across the value chain. This would they do with other include shelf-based pricing, price to distributor and price to retailer as well shared services. This as optimization of promotional spend—a would make premium massive expenditure for CPG companies. analytics services both 6. Channel Management Analytics. cost effective and Analytics can help identify which channel partners actually provide the best return more accessible. on manufacturer investment. While a strong personal relationship with channel partners is always positive, it may not always translate to added sales. Analytics6 See Demand sensing software helps Unilever, can provide the evidence to recalibrate www.ft.com, March 18, 2011. customer strategy.7 See Gaining ground, http://www.inboundlogistics. com/cms/article/gaining-ground/ January 2011. 11
  • 12. Figure 5. CPG Analytic Framework: High Performers Prioritize and Sequence High Value Analytics Opportunities Brand Digital Portfolio, Price & Channel Retail Marketing Analytics Assortment Promotion Management Execution Analytics & Space Analytics Analytics Analytics Analytics Brand Clickstream Portfolio Cost to Serve Customer Broker Strength & Analyses Optimization & Margin Profitability Performance Awareness Leakage Management Marketing Visitor Tracking Assortment Base Volume Retailer Distributor Return on & Segmentation Optimization & Price Segmentation Performance Investment Elasticity Management Media Mix Closed-Loop Space Shelf Price Distributor Predictive Optimization Marketing Optimization Threshold Segmentation Demand (Traditional Analyses & Gap Sensing + Digital) Optimization at Shelf Media Cross-Channel/ Adjacency/ Retailer Sales Channel Route Audit and Multi-Format Bracket Resource Optimization Secondary Performance Analytics Pricing Allocation Placement (Direct/ Broker/Dist.) Campaign Lifetime Demand-Based Promotion Sales Force In-Store Investment Value Store Clustering Allocation Size & Activity & Tactics Analysis Optimization Structure Optimization Optimization Consumer Promotion Trading Retailer Sentiment Event & Partner Compliance Calendar Collaboration Monitoring Optimization©2012 AccentureAll rights reserved.12
  • 13. 3. Operationalizing Analytics Throughoutthe Enterprise“If you cannot What’s needed to make the integrated vision a reality and capture the highest Fragmented pockets of initiatives also make it challenging to build an industrialized measure it, you return on analytic investments? A large capability. Yet, timely access to such cannot improve it.” part of the answer lies in building processes and enablers that operationalize analytics analytic capability and insights is necessary to develop strategies for growth and– Lord Kelvin William Thompson, effectively. Most companies we serve have achieve operating excellence. mathematical physicist and engineer a range of analytic skill and will, yet it’s fair to say that analytics are not truly embedded To ensure that timely access, companies in their organizations nor is the use of need an end-to-end operating model analytics promoted, measured or rewarded that embeds analytics throughout the consistently. The consequence is that enterprise. New structures, processes and some areas have deep analytic capability enablers such as those identified in Figure (finance, obviously, or R&D) while others 6 can help a company operationalize do not, creating an internal dissonance. analytics and ingrain analytics as part of a company’s culture.Figure 6. Core Capabilities to Bring Insight to Action From Inputs... Enablers ...To Outcomes Sponsorship & Leadership The process to obtain executive sponsorship and senior leadership commitment to the analytics vision Organization & Talent Management The people, their skill sets and the organizational structure The rules and procedures to manage, gather, integrate and extract data from internal and external sources needed to support analytic transformation Process to assess the value of the analytic insights as well as track the benefits realized over time Data Management & Analytics Process Management Process by which business leaders leverage insights to execute Value Realization treatment strategies Insight Management Statistical process by which management scientists analyze data and uncover insights Service & Technology Management The tech environments needed to enable analytic execution as well as the service levels and service contracts needed to support the organization Capability Development The industrialization of individual analytic capabilities as Company XYZ moves up the analytics maturity scale Data to Insights Insights to Actions Actions to Results©2012 AccentureAll rights reserved. 13
  • 14. Analytics as a Managed issues or variances may crop up so it’s easier to spot them, but a large part of • New processes such as insight management could focus investment onService: One Path to moving from insight to action is more building a small group of statisticiansIncrease Speed-to-Value structured communication of and clear accountability to use findings. and scientists skilled in interpreting analyses to generate insights. This groupThe consumer division of a global life could also capture and prioritize insight To make accountability clear and action requests (and ensure elimination ofsciences leader realized it needed to more certain, companies could consider duplicative requests). Equipped with theimprove its analytics capabilities to centralizing the management of analytics, right tools and capabilities the teamcapture “a single version of the truth” just as they do with other services. Local should be able to analyze data to detectto develop more relevant marketing variants in the type and volume of analytics and/or predict marketplace trends.and sales campaigns. Accenture helped will continue to exist, and are needed torefine the company’s data strategy and ensure market relevance. However, if the • Enhanced process managementproposed improvements to how the data overall intensity and maturity of analytic capabilities are critical to ensuring thatand insights were communicated to needs are great, a centrally managed, insights are acted upon. The processincrease the probability that the insights shared service model could standardize and management team collaborates withwould be acted on. The solution, supplied optimize use of analytics while reducing the business to develop and execute aunder a managed services arrangement, costs and duplication across geographies. plan that turns insights to action andincludes a new interactive portal serving Gartner expects the convergence of market impact. Process managers also2,400 users across Europe, a report service services with software and infrastructure play an important communication role,bureau that generates more than 100 to cause significant changes in sourcing syndicating insights to relevant partiesreports, and a hosted client data center to strategies, driven by new offerings delivered and functions to ensure a higher level ofensure accurate, standardized data. The “as a service.” 8 Our direct experience is cross-functional use and consistency.subscription-based analytics service delivers that an analytics service model is alreadyinsights on sales related to more than Some processes such as Customer being used and frequently leverages the500,000 customers, 30,000 SKUs and 150 Relationship Management (CRM) are capabilities of external service providersbrands. The new capabilities integrate data already very analytic-driven. Yet an (see sidebar).from noncompatible sources to provide a enhanced toolset and access to moresingle source of information used by the Embedding Analytics in Core and resources could provide more support forentire business. Managers can now extract Enabling Processes the day-to-day decisions the CRM teambetter insights faster, collaborate more makes. What’s more, teams that useeasily, and leverage advanced reporting and Operationalizing analytics also depends upon resources like Insight Managers couldpredictive analytics to serve markets better. embedding analytics in a range of processes strengthen ties to and synergies with and functions. The goal would be to provide other parts of the organization such asLeadership, Sponsorship and employees with reliable analytic resources R&D or Channel Management, helpingOrganization of Analytics and tools with which to complete their build enterprise-wide, industrialized work, and facilitate the evolution to a more analytic capability.Currently few companies have one point analytic organization.of accountability to make decisionsregarding investments in data or analytics • Traditional HR processes such asor manage analytic initiatives, hence talent management and capabilitythe duplication and lack of integration development will need to be refineddiscussed earlier. Leadership and clarity to reflect the stronger emphasis placedare needed to formalize accountability on analytics use and competency.for moving from insights to action, while Job descriptions, hiring policies, skillsalso supporting local markets’ need for development curricula, and careerdiscreet analytic efforts at times. Clarifying paths and levels can support analyticswho should receive insights from analysis, transformation. Workforce planninghow frequently and in what format and scheduling as well as employeesounds obvious. Yet often great analysis engagement and performance feedbackis performed and then left to die on the processes are crucial to developing and 8 Source: Gartner, Predicts 2012: IT Services Sourcingvine because ultimate responsibility to retaining analytic talent given the current Strategies and Execution Demand Proactive Diligence, shortage of candidates with relevant 1st Dec 2011act on analytic insights—both negativeand positive exceptions and unexpected analytics capability.9 Accenture’s experts 9 See Harris, et al. How to Organize Analytic Talent,patterns—is not clear. Some of the in building analytic-driven organizations (November 2009), http://www.accenture.com/ have offered strategies to close the SiteCollectionDocuments/PDF/Accenture_Organize_challenge is simply anticipating where Analytical_Talent.pdf. analytics gap (see sidebar).14
  • 15. Service and Technology drivers and key assumptions, and measureManagement and report on value realization over time. Implementing a formalTechnology is a key enabler of becoming Members of the value realization team would necessarily collaborate with business value realizationan analytic-driven company. CPG firms leaders and the insight management group process is key toneed world-class data integration,harmonization and management to harness to agree on performance baselines and develop the business case for analytics. moving from insights“big data,” yet many are struggling with to performance-how to synthesize and store the volumes Fortunately, CPG companies do not need toof data they already have so that it is go it alone when attempting to operationalize enhancing action. Aaccessible, useful, flexible and secure. analytics. Third-party options exist to support development or management of most of these value realization teamCPG companies understandably want to capabilities. The key for CPG companies is can assess benefitsleverage their legacy systems while alsotaking advantage of new capabilities and to identify providers who have the industry, functional and technology expertise needed and costs of analytics,solutions. In many cases the best answer to help them manage data and quickly identify value driversis to adopt a hybrid technology approachthat blends legacy systems and new expand analytics capability. Taking advantage of hosted, outsourced or managed service and key assumptions,enabling technologies such as in memory options can be the quickest route to becoming and measure and reportcomputing, cloud services and mobilitysolutions. Flexible, open platforms and a more analytic company and capturing the full value of investments in analytics. on value realizationtechnologies are better able to apply Conclusion over time to ensure thatanalytic applications to “big data” storesand generate predictive insights about returns on analytics are CPG companies face many challenges inconsumers, growth opportunities andmarket dynamics.10 P&G reported that new today’s uncertain economic environment, positive. including how to cost effectively developdata warehouses allowed one user to trim deeper analytic capability that improvesthe time it took to perform some analytic market performance. While manytasks from 20 hours to a few minutes.11 companies use analytics, most struggle to The Quest to BuildIndustrialization and Value execute an analytics strategy that resultsRealization in effective and efficient decisions and Analytical Capability clear action because they are immersed in Talent-powered analytical organizationsAs analytics become more integrated compiling data and conducting fragmented aren’t just distinguished by the quality ofand embedded, companies will have a analysis. Getting out of the “analysis their analytical talent: it’s their ability tofoundation on which to build a deeper paralysis” trap and turning insights unleash their analysts’ talents to maximizeand broader analytics competency. Yet to action requires a more integrated, and continually expand the company’sensuring that the investments in analytics streamlined approach to managing analytical capabilities. To create a talent-generate positive returns requires an and consistently extracting value from powered analytical organization executiveongoing obsession with value capture. In investments in analytics. Adopting a fully sponsors need to do the following:operational terms, that obsession can be integrated analytics operating model wouldsatisfied by implementing an objective help companies focus analytic resources 1. Define specific analytical talent needs thatvalue realization process. This process on high-value processes and activities— are clearly tied to the organization strategy.would assess the benefits and costs of those that grow market share and sustaininvestments in analytics, identify value profit margins. Accenture’s work with CPG 2. Remain on the lookout to discover top companies in developing and implementing sources of analytical talent within and10 See Accenture’s POV on CPG technology data strategies and analytics solutions outside the firm. enablers, http://www.accenture.com/ convinced us that the future and market SiteCollectionDocuments/PDF/Accenture- 3. Develop analytical talent continuously, Technology-Investments-Boost-Consumer- advantage belong to companies who in junior to senior team members to Packaged-Goods-Performance.pdf#zoom=50. harness the power of both. deepen “bench strength.”11 “Time to Rebuild: P&G Gains POS Insights with New Data Warehouse Solution” (April 2012), http:// 4. Deploy analytical talent wisely by www.consumergoods-digital.com/consumergoodste creating the best possible match chnology/201204#pg17. between analysts’ skills and business12 Accenture Institute for High Performance, Counting demands.12 on Analytical Talent, 2010. 15
  • 16. About Accenture Shaping the Future of High Authors Performance in Consumer GoodsAccenture is a global management Robert Berkeyconsulting, technology services and Our Consumer Goods & Services industry Director—Consumer Goods & Services,outsourcing company, with more than professionals around the world work Commercial Analytics249,000 people serving clients in more than with companies in the food, beverages, robert.e.berkey@accenture.com120 countries. Combining unparalleled agribusiness, home and personal care, +1 917 817 5923experience, comprehensive capabilities consumer health, fashion and luxury,across all industries and business functions, Kenneth Dickman and tobacco segments. With decades ofand extensive research on the world’s Executive Director, Marketing & Sales experience working with the world’s mostmost successful companies, Accenture Transformation, Accenture CRM successful companies, we help clientscollaborates with clients to help them kenneth.dickman@accenture.com manage scale and complexity, transformbecome high-performance businesses and +1 312 961 1930 global operating models to effectivelygovernments. The company generated net serve emerging and mature markets, and Massimo Casiraghirevenues of US$25.5 billion for the fiscal drive growth through evolving market Executive Director—Accenture Analyticsyear ended Aug. 31, 2011. Its home page conditions. We provide end-to-end massimo.casiraghi@accenture.comis www.accenture.com. services as well as individual consulting, +39 335 6327699 technology and outsourcing offerings in the areas of Commercial Services, Speed Julio Hernandez to Customer, ERP Transformation and Executive Director—Accenture Analytics Integrated Business Solutions. To read our julio.j.hernandez@accenture.com proprietary industry research and insights, +1 404 307 5363 visit www.accenture.com/ConsumerGoods.Copyright © 2012 AccentureAll rights reserved.Accenture, its logo, andHigh Performance Deliveredare trademarks of Accenture.