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84 Part One Organizations, Management, and the Networked Enterprise

INTERACTIVE SESSION: MANAGEMENT

PILOTING PROCTER & GAMBLE FROM DECISION COCKPITS

Procter & Gamble (P&G) is one of the biggest show ways that P&G can adjust pricing, advertising,
consumer goods companies in the world, with and product mix to respond to the predictions.
127,000 employees across 180 countries, 300 brands, For example, when CEO Bob McDonald meets
and $82 billion in revenues in 2011. P&G is regu- with his executive committee each Monday, they
larly ranked near the top of lists of “most admired examine the top categories of products and coun-
companies” for its ability to create, market, and sell try markets (such as Italy and hair care) that are
major consumer product brands. A major reason responsible for 60 percent of sales. Data visualiza-
for P&G’s success has been its robust information tions show changes in sales and market share.
technology and willingness to pursue new IT inno- Executives may want more detailed data: Is the
vations to maintain a competitive advantage in its sales dip in detergent in Germany because of one
industry. large retailer? Is that retailer buying less only in
To that end, P&G has made it its goal to digitize Germany or across Europe? Did a rival take away
its processes from end to end and to fundamentally market share because P&G raised prices or cut
change the way it gathers, reports, and interprets promotions, or is the product category overall losing
data. While P&G is trimming costs from other areas sales?
of the business, its Global Business Services division P&G’s Business Sphere is an interactive system
is building analytics expertise and undertaking new designed to reveal insights, trends, and opportu-
analytical solutions such as Business Sufficiency, nities for P&G’s leaders and prompt them to ask
Business Sphere, and Decision Cockpits. focused business questions that can be addressed
These solutions eliminate time spent debating with data on the spot. Two giant 32-foot by 8-foot
different data sets, and instead use a system that concave display screens physically surround these
allows leaders to focus on immediate business managers with the data on sales, market share, and
decisions using the most accurate data available at ad spending required to make actionable decisions.
that precise moment. Thousands of algorithms and analytical models
The solutions are based on a transformation in aggregate data, organizing it by country, territory,
the way P&G uses data for decision making across product line, store level, and other categories, and
the company, from executives, to brand managers, monitor trends like response to advertising and
to lower-level employees. P&G’s old decision-making consumer consumption within individual regions
model was to figure out what reports people wanted, and countries. Everyone in the meeting sees the
capture the data, and then deliver them to the key same information.
decision makers days or weeks later. The new The program analyzes 200 terabytes of P&G data,
model is more instantaneous, with people huddling equivalent to 200,000 copies of the Encyclopedia
together in person or via video and pulling in the Britannica, and displays information quickly and
right experts to fix a problem the moment it arises. clearly. The Business Sphere allows top executives to
More real-time data and analytics expertise are answer their own specific business questions, and to
required. visualize data in a more intuitive way than a simple
The Business Sufficiency program, launched in report allows. The Business Sphere was envisioned
2010, furnishes executives with predictions about as a kind of command center, where top managers
P&G market share and other key performance met- gather either in person or via high-quality videocon-
rics six months to one year into the future. It is based ferencing technology like Cisco TelePresence, and
on a series of analytic models showing what’s occur- immediately determine the biggest problems facing
ring in the business right now (shipments, sales, the business and who can fix those problems as soon
market share), why it’s happening, and what actions as they arise. P&G now has more than 50 Business
P&G can take. The “why” models highlight sales data Spheres around the world.
at the country, territory, product line, and store lev- P&G can now obtain the same data about point of
els, along with drivers such as advertising and con- sale, inventory, ad spending, and shipment data that
sumer consumption, factoring in specific economic it did years ago—it just obtains that data much faster
data at the regional and country levels. The “actions” and at more frequent time intervals. The improved

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