Business Intelligence Software at SYSCO

Jason C. H. Click to edit Master subtitle style Chen, Ph.D. Professor of MIS School of Business Administration Gonzaga University Spokane, WA 99258 chen@jepson.gonzaga.edu

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

Why Study the Case?

This case is used to illustrate several points about how large companies select, use, and benefit from enterprise-level software. Some goals are:

BI is emerging as a popular and important new category of enterprise IT. The case provides an overview of its capabilities and shows how it is applied in one corporate context. Discussing two alternative for buying software:

1) the minimum need or 2) more than the minimum up front (take advantage of price discount)

Exploring how to begin taking advantage of BIs many capabilities. Discussing the competitive implications of BIs capabilities

Can BI be a competitive differentiator?

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

The Case

Description: The large food service company SYSCO has decided to purchase business intelligence (BI) software, a technology intended to provide superior monitoring and analysis capabilities. Twila Day, assistant vice president of technology and applications, is in charge of the BI project and must determine exactly how much software to buy. She must also plan the BI implementation throughout the company. After conferring with Business Objects, the BI application's vendor, SYSCO has decided initially to configure the software and train employees to address only a limited set of questions. Learning objective: To illustrate several points about how large companies select, use, and benefit from enterprise-level software.

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

The Case

Subjects Covered: Change management; Control

systems; ERP; Information systems; Information technology; Management controls.

Setting:

Geographic: United States Industry: Food services Company Employee Count: 45,000 Company Revenue: $26 billion revenues Event Year Begin: 2003 Event Year End: 2003

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

Executive Summary

SYSCO is an industry leader in food services, with 83 regional operations and 62 specialty companies. With so many regional operations and companies, SYSCO had organically developed a decentralized structure. Beginning in 1993, a more centralized approach was adopted for IT services, with all operations required to integrate into a system-wide Enterprise Resource Planning (ERP) system. This complete integration was completed by 2003. A data warehouse was established in 2000 to compile and store all business data for the entire company. This data warehouse made it possible for SYSCO to plan for Business Intelligence software to inform and improve the way they do business. SYSCO began working with Business Objects to develop a BI system that would meet their business needs.

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

Business Strategy:

Business Strategy

1. #1 in the Food Services Industry 2. provide customized product solutions to restaurants and fast food chains

Organizational Strategy: 1. decentralized operations 2. centralized IT Solutions 3. sales professionals empowered to help clients with all food services needs

IS/IT Strategy: 1. Enterprise Resource Planning (ERP) framework 2. Data warehouse 3. BI dashboard from Business Objects

Organizational Strategy

IS/IT Strategy

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

BI and Business Strategy

To be successful, BI must be aligned with the companys business strategy.

BI cannot/should not be a technical exercise for the information systems department. improving business processes, and transforming decision making to a more data/fact/information driven activity.

BI changes the way a company conducts business by

BI should help execute the business strategy and not be an impediment for it!

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

BI for Business Strategy

Strategy should be aligned with BI/DW has the capability to execute the initiative by establishing a BI Competency Center (BICC) which can:

Demonstrate linkage BI to strategy. Encourage interaction between the potential business users and the IS organization. Both sides have a lot to learn from each other Serve as a repository and disseminator of best BI practices among the different lines of business. Advocate and encourage standards of excellence. Help stakeholders understand the crucial role of BI. Facilitate a real-time, on-demand agile environment. (see next slide)

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

An understanding of how SYSCOs core strategy to own their industry influences their organizational and IT strategies helps create a decision framework for elements such as BI software implementations. In this case, seeing how the BI software will be rolled out to all divisions through their already centralized IT framework informs the decision about how many bundled packages should be purchased. If the BI dashboard is integrated into the ERP framework managers are already using, adoption rate of the new technology should be high. This justifies purchasing the more cost effective bundle package, even though all the tools would not be used immediately.

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

Case Questions

1. What will be the biggest obstacles faced by the business intelligence implementation as it expands throughout SYSCO? 2. Why did SYSCO decide to initially address only two questions with its new BI software, rather than using it as a more general analysis tool in the operating companies? Why did Business Objects recommend this approach? What are its strengths and weakness? 3. Will effective use of BI software ever be a competitive differentiator for SYSCO? Wouldnt it be straightforward for another food service company to also purchase and implement similar software? 4. List and explain at least six (general) features of Business Intelligence Software (please be specific). Identify that you already experienced. (You need to study this question).

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

1. What will be the biggest obstacles faced by the business intelligence implementation as it expands throughout SYSCO?

Discussion issues:

1) What are the organizational and technical pre-reqs? 2) Is SYSCO well set-up to succeed? 3) Why did not they make it voluntary? Couldnt the operating companies comp0lain if they already have BI, or dont think they want it? 4) How much software should Day buy at this time?

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

1. What will be the biggest obstacles faced by the business intelligence implementation as it expands throughout SYSCO?

The biggest obstacle the BI implantation would face as it expands through SYSCO would be the resistance from managers and IT professionals unwilling to use the new tools. The strongest resistance would come from the divisions that already have their own business intelligence tools in place, because they might not see the advantages (or any other reasons) of switching.

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

2. Why did SYSCO decide to initially address only two questions with its new BI software, rather than using it as a more general analysis tool in the operating companies? Why did Business Objects recommend this approach? What are its strengths and weakness? Two questions addressed were: 1) What additional products could we be selling to each of our customers?

BI software could help answer this question by comparing a given clients activity to what was typical for a customer of it size, type, geography, and so on. The Business Objects team recommended that SYSCO address this question by using the software to examine customers ordering patterns over time, highlighting instances where a historically loyal customer was reducing its order volumes, either for all products or for a specific category.

2) Which of our current customers are we most likely to lose?

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

2. CONT.

Business Objects recommended the two question approach so that operating companies and their employees would become comfortable with the software by at first using only a narrow and easily comprehensible range of its capabilities. Also, these two questions are very important ones for all SYSCOs companies, and gaining some insight on them will demonstrate to users and companies the power of the BI software (and hence a valuable demonstration for Business Objects.)

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

3. Will effective use of BI software ever be a competitive differentiator for SYSCO? Wouldnt it be straightforward for another food service company to also purchase and implement similar software?

Discussion: Two views of ITs impact on competitive advantage and positioning: 1) BI can be considered a possible source of competitive differentiation for SYSCO and, it so, whether it is a sustainable one.

How easy would it be for a competitor to coy this move? Could any competitor do it? How quickly could they catch up?

2) BI will become a necessary part of a companys IT infrastructure, but because it is easy to acquire and adopt it will not cause changes in competitive positioning.

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

3. Will effective use of BI software ever be a competitive differentiator for SYSCO? Wouldnt it be straightforward for another food service company to also purchase and implement similar software?

Effective use of BI software could become an extremely useful competitive differentiator for SYSCO. Because of their long operating history and industry leadership, they have the greatest depth and breadth of data. Properly managed in data warehouses, this provides the opportunity to do much more data mining than their competitors would be able to do. This leveraging of their market position, using data mining, would allow SYSCO to keep strategic advantages that other food service companies could not easily match, even using similar software.

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

4. List and explain at least six (general) features of Business Intelligence Software (please be specific). Identify that you already experienced. (You need to study this question).

Business Intelligence (BI) is smart software package supporting the business decision making process. This package helps in gathering, analyzing and presenting business information. Its data-driven intelligent business solutions are used in the Decision Support Systems (DSS). A BI software (e.g., data mining) is a integration of data sourcing, filtering, ranking and information presentation. Given below are a few features of the business intelligence software.

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

4. (cont.)

Drill down/up Graphs, charts and trees with custom drill down Drill down of dimensions with previews of current and past derivations Exception conditional highlighting of cell level OLAP (online analytic processing) Pivot table Cross Tabs Custom calculations Query Wizard Expertise Layout Comments and Saving Analytical features like ranking, filtering, sorting, group by etc Dashboards with KPI reports Web Portals with RSS feeds Interval Grouping on date field Distribution reports with XML Publishing Export reports in different formats (PDF, XLS, TXT, HTML etc.)

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

SYSCOs VISION and MISSION

Our vision is to be our customers most valued and trusted business partner. We are achieving that vision by building on the core strengths we have developed since our founding:

quality products, unmatched service, strong relationships, outstanding operations and logistics, and sound financials. These strengths have made us the undisputed industry leader and will drive our future growth as we continue to feed our customers success. Our mission is to market and deliver great products to our customers with exceptional service.

Mission and CORE STRENGTHS

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

BI for Business Strategy

Strategy should be aligned with BI/DW has the capability to execute the initiative by establishing a BI Competency Center (BICC) which can:

Demonstrate linkage BI to strategy. Encourage interaction between the potential business users and the IS organization. Both sides have a lot to learn from each other Serve as a repository and disseminator of best BI practices among the different lines of business. Advocate and encourage standards of excellence. Help stakeholders understand the crucial role of BI. Facilitate a real-time, on-demand agile environment.

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices

Issues for Successful BI

Developing vs. Acquiring BI systems (Make vs. Buy)

Developing everything from scratch Buying/leasing a complete system Using a shell BI system and customizing it Use of outside consultants? It is easier to quantify costs Harder to quantify benefits

Justifying via cost-benefit analysis

Most of them are intangibles

John Wiley & Sons, Inc. & Dr. Chen, Information Systems Theory and Practices