Case study 3 piloting procter & gamble from decision cockpits- is & ec - gst5083- hj zul

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INFORMATION SYSTEMS & E-COMMERCE –GST5083

CASE STUDY 3 :PILOTING PROCTER & GAMBLE FROM DECISION COCKPITS

LECTURER: PROFESSOR DR RUSLI BIN ABDULLAH

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Introduction & BackgroundProcter & Gamble Co., also known as P&G, is an American

multinational consumer goods company headquartered in downtown Cincinnati, Ohio, United States, founded by William Procter and James Gamble, both from the United Kingdom.

Founded in 1837.One of the biggest consumer goods companies in the world,

with 127,000 employees across 180 countries.Marketing for 300 brandsGenerates $82 billion in revenues in 2001

William Procter

James Gamble

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Case Study Summary This case focuses on how P&G use information system to

improve decision making. P&G is investing in analytic talent, even as the company cuts in other areas, to speed up business decision making. True leaders develop the capabilities required for making good and timely decisions in unpredictable and stressful environments.

P&G analytic platform is a part of a wider strategic initiative which aims to support, provide deliver insights to meet the needs for P&G in multi-channel, multi-devise, multi-format, multi-language, multi-country of the world that it operates. P&G is investing in analytics expertise because the model for using data to run a company is changing.

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P & G Products And Brands

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CASE STUDY QUESTIONS

1. What management, organization, and technology issues had to be addressed when implementing Business Sufficiency, Business Sphere and Decision Cockpits?

2. How did these decision-making tools change the way the company ran its business ? How effective are they? Why?

3. How are these systems related to P & G’s business strategy?

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1. What management, organization, and technology issues had to be addressed when implementing Business Sufficiency, Business Sphere and Decision Cockpits?

a). Management issues The management dimension of information system involves leadership,

strategy and management behaviour.The issues had to be addressed are : 1. Human Resources Management

Training – how to train the existing employees to adopt and use the new tools

Hired skillful employees Maintain skillful employees Compensations

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CONTINUE

2. StrategyStrategy to make sure that data did not leaked and obtained

by competitors.Strategy to make sure that data obtained have been fully

utilized by managers and executive to make a decision.

3. Management Behaviour.Management integrity

b). Organization issuesThe organization dimension of information systems involves

the organization’s hierarchy, functional specialities, business prcesses, culture and political interest groups.

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The organization dimension of information systems involves the organization’s hierarchy, functional specialities, business prcesses, culture and political interest groups.

Since P & G pursue new IT innovation to maintain the competitive advantage, the management issues that need to be addressed involves such as :

i. functional specialities – P & G need to structure back the

functional specialities especially in IT department.

ii. business processes – Business process will be change and spouse to be in line with the new approach.

iii. culture – New culture will be created and how fast the

employees can adopt the change

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The organization dimension of information systems consist of computer hardware, software, data management technology and networking/ telecommunications technology (including the internet).

By implementing Business Sufficiency, Business Sphere and Decision Cockpits, P& G change the way its gathered, reports and interprets data. Hence, the technology issues need to be addressed consists of :

- computer hardware – suit the program

- software – to upgrade accordingly

- data management technology – to store the huge data and

- networking/telecommunications technology – to support the

solutions.

c). Technology Issues

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2. How did these decision-making tools change the way the company ran its business ? How effective are they? Why?

a). Business Sufficiency: This program furnished executives with predictions about P&G market share

and other key performance metrics six months to one year into the future. Based on a series of analytic models showing what’s occurring in the business right now (shipment, sales, market share)

The effectiveness of the tool is based on the analytic models as follows : - The “why” models highlight sales data at the country, territory, product line and store levels along with drivers such as advertising and consumer consumption, factoring in specific economic data at the regional and country levels. - The “actions” show ways that P&G can adjust pricing, advertising and product mix to respond to the predictions.

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So, this program helps the CEO and executives to examine the top categories of products and country markets that are responsible for 60 percent of sales. This tool provides data visualizations that show changes in sales and market share.

Moreover, this program furnish more detailed data as required by executives such as : Is the sales dip in detergent in Germany because of one large retailer? Is that retailer buying less only in Germany or across Europe

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b). Business Sphere: Interactive system designed to reveal insights,

trends, and opportunities for P&G’s leaders and prompt them to ask focused business questions that can be addressed with data on the spot.

Thousands of algorithms and analytical models aggregate data, organizing it by country, territory, product line, store level, and other categories and monitor trends like response to advertising and consumer consumption within individual regions and countries.

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This tool allows top executives to answer their own specific business questions and to visualize data in a more intuitive way. It was envisioned as a kind of command center, where top managers gather either in person or via high-quality video conferencing, and immediately determine the biggest problems facing the business and who can fix it as soon as they arise.

P & G now has more than 50 Business Sphere around the world.

This tool is effective because P&G now can obtain data about sale, inventory, ad spending and shipment data much faster and more frequent time intervals.

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c). Decision Cockpits:It gives more of its employees the access to the same

common data sources, these cockpits are dashboards displaying easy-to-read charts illustrating business status and trends.

It feature automated alerts when important events occur, control charts, statistical analyses in real time, and the ability to “drill down” to more detailed data.

By providing a one-stop source of accurate and detailed real-time business data, all employees are able to focus instead on decisions for improving business.

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3. How are these systems related to P & G’s business strategy?

Procter & Gamble uses “Distributed development” as part of their global model. This model allows for the adaptation in a set of tools and practices that fit an organization’s needs.

To success, P & G has been robust information technology and willingness to pursue new IT technology to maintain a competitive advantage in its industry.

The Business Sufficiency program, Business Sphere and Decision Cockpits, give managers and executives the faster and better decision making. The systems have been reduced complexity involved a statistical report, as well as cost reductions.

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The implementation of these systems has able P&G to better anticipate future events affecting the business and more quickly respond to market stimuli.

These systems eliminate time spent debating different data sets, and instead use a system that allows management and employees to focus on immediate business decisions using the most accurate data available at that precise moment.

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