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Real Time

Research
REPORTS

Real-Time
Enterprise Stories
Adobe Systems
• Alliander
• ARI
• CareFusion
• City of Boston, Massachusetts
• City of Cape Town, South Africa
• Commonwealth Bank of Australia
• ConAgra


eBay
• EMC
• Florida Crystals
• Globus
• Hewlett-Packard
• HSE24
• Johnsonville Sausage
• Kaeser Compressors


Maple Leaf Foods
• Mercedes-AMG
• NFL
• Nomura Research Institute
• Norwegian Cruise Line
• Southern California Edison
• T-Mobile


More than 20 detailed case studies from Bloomberg
Businessweek Research Services and Forbes Insights
featuring leading-edge enterprises across industries to explore
the real value of the in-memory platform: SAP HANA.
Sponsored by:
October 2014

Real-Time Enterprises

A Research Collection

Contents
Forward: Making Decisions in the Moment.................................................. 5
Adobe Systems: “Adobe Gets Personal With Customers” (high tech)........ 6

Alliander: “Alliander Energizes Its Business with Real-Time Analytics”
(utilities)...................................................................................................... 10

ARI: “In-Memory Computing Drives Fleet Savings at ARI”
(automotive)................................................................................................ 14

CareFusion: “Real-Time Business Leads to Healthy Performance at
CareFusion” (healthcare) ........................................................................... 18

City of Boston, Massachusetts: “Boston’s Better Community Connections
Through Big Data and Analytics” (public sector) ...................................... 22

City of Cape Town, South Africa: “Real-Time Data Speeds Services in
‘The Mother City’ of Cape Town” (public sector) ...................................... 25

Commonwealth Bank of Australia: “CBA Offers More Personalized Banking
Through Big Data and Analytics” (banking)................................................ 28

ConAgra: “Real-Time Business Leads ConAgra to Profitable Insights”
(consumer products).................................................................................. 31
eBay: “Big Benefits from Big Data at eBay” (high tech)............................ 35

Page

2

Real-Time Enterprises

A Research Collection

Contents
EMC: “The Key to EMC’s Technology Growth: Integrated Acquisitions”
(high tech)................................................................................................... 39

Florida Crystals: “Real-Time Business Sweetens Performance at Florida
Crystals” (consumer products)................................................................... 44
Globus: “Globus Is Always in Style with In-Memory Technology” (retail).. 48

Hewlett-Packard: “HP Paves the Future with Real-Time Insights”
(high tech)................................................................................................... 51

HSE24: “Using Real-Time Insights, HSE24 Gets Closer to Customers”
(retail).......................................................................................................... 55

Johnsonville Sausage: “Johnsonville Cooks Up a Real-Time Recipe”
(consumer products).................................................................................. 59

Kaeser Kompressoren: “Kaeser Puts Customers First with Big Data and
Real-Time Business” (industrial machinery & components)...................... 63

Maple Leaf Foods: “Maple Leaf Foods Turns Over a New Leaf with
Up-to-the-Minute Insights” (consumer products)...................................... 67

Mercedes-AMG: “Mercedes-AMG: A Showcase for Real-Time Business
Decisions” (automotive).............................................................................. 71

National Football League: “The NFL’s Advanced Analytics Score with
Football Fans” (sports & entertainment) .................................................... 75
Page

3

Real-Time Enterprises

A Research Collection

Contents
Nomura Research Institute: “Tokyo Drivers Avoid Traffic Jams with NRI’s
Big Data and Analytics” (high tech)............................................................ 79

Norwegian Cruise Line: “Norwegian Cruise Line Sets Its Course for
Real-Time Insights” (travel & transportation).............................................. 82

Southern California Edison: “How Southern California Edison Harnesses
Big Data’s Power” (utilities)........................................................................ 86

T-Mobile: “Using Social Media to Improve Customer Loyalty at T-Mobile”
(telecommunications)................................................................................. 90

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E L E C T R O N I C V E R S I O N AVA I L A B L E
To see or use an electronic copy of this document in PDF format, please visit the following Web site:
www.saphana.com

Page

4

Real-Time Enterprises

A Research Collection

Forward: Making
Decisions in the Moment
Many different factors impact the decisions companies make everyday. Being a real-time business
means being able to make those decisions when they matter most. For most companies today, however, batch processes must run before any decision can be made. In retail, for example, personalized
offers in stores aren’t common. Instead, stores offer a generic 25 percent off. But what if something
personal and relevant for individual shoppers could be delivered when they walk in the door?
There will be a time when
we walk into a store and our
experience will be radically
different. That’s why the SAP
HANA platform exists: to
enable companies to do business in the moment.
Steve Lucas,
President
Platform
Solutions,
SAP

For large companies, three
main drivers deliver value.
First, simplify: Reduce the
complexity of the systems
required to produce existing results. In fact,
massive IT simplification was one of the key
design motivations behind SAP HANA. You
can use the platform to feed data from all
different sources into one system. Second,
enable agility: Give customers insights in real
time to aid decision-making. Third, innovate:
Unlock the true potential of real-time business
innovation through new business processes
and models.
SAP HANA deployments began more than
three years ago. Since then, companies have
added the SAP Business Suite powered by
HANA. Now there are more than 4,000 SAP
HANA customers. So far, business transformations have been process by process based on
the time it takes to get data and then analyze
it. When you eliminate the latency, you have to
think through how you want to work differently.

Real-time planning, for example, is the “game
changer” for one SAP customer. Using HANA
has reduced the time it takes to process one
financial report from 40 hours to 20 seconds—
a 7,000 times improvement.
I envision the SAP HANA platform not only
enabling customers to make today’s decisions
but also providing them a powerful predictive
engine for tomorrow’s choices. Most companies make decisions by looking in the rearview
mirror, but a rearview mirror offers only a tiny
piece of the puzzle versus the forward view
a windshield provides. Eventually, operating
models will include built-in forward-looking
decisions.
Real-time business transformations are not
just about technology, though. SAP HANA is
extraordinarily innovative, but the first thing
we do is look at where the opportunities are
to transform business processes. Then, SAP
helps customers rethink how those processes
are designed and how they can be remodeled.
You have to start at zero. If you don’t have to
wait for information, there’s an opportunity for
massive reinvention and value creation across
industries. n —Steve Lucas

Page

5

Real-Time Enterprises

A Research Collection

Adobe Systems at a glance
Producer of desktop publishing and graphics editing
programs as well as a wide array of products made
for creative and marketing professionals
Industry: high tech
Founded: 1982
Headquarters: San Jose, Calif.
2013 revenue: $4.06 billion
Employees: More than 11,000 worldwide
Products: Software for creative and
marketing professionals
www.adobe.com
Source: Adobe Systems

Page

6

RESEARCH UPDATE | Real-Time Enterprise Case Studies

Adobe Gets Personal
With Customers
With in-memory computing and predictive analytics tools, the high-tech company is
anticipating customer needs and developing more personalized programs.
BY JOE MULLICH

T

hroughout high-tech, long-time business models are falling by the wayside as
products become digitized, customer demands rise and the need for speed

increases. Few companies know this better than Adobe Systems, best known for its

Adobe Systems at
a Glance
} Founded: 1982
} Corporate headquarters:
San Jose, Calif.
} Revenue: $4.06 billion,
fiscal 2013
} Employees: More than
11,000 worldwide
} Products: Software for
creative and marketing
professionals
www.adobe.com
Source: Adobe Systems

desktop publishing and graphics editing programs Acrobat and Photoshop, as well as
a wide array of products made for creative and marketing professionals.
Over the past few years, Adobe’s business model

FIGURE 1

has fundamentally changed. Instead of selling
boxed software, its business is now driven by

Changes to Adobe’s
Business Model
The company’s business model has
fundamentally changed.

cloud-based subscriptions. And instead of products
being released every 18 months, new offerings and
upgrades are a constant. The company’s customer

Past

Present

Offerings

Sold by the
box

Sold by the
subscription

Distribution

Sold through
partners

Sold directly

Product
releases

18-month
cycles

Continuously
updated

Periodic

Ongoing
relationship

interactions—once periodic and performed through
resellers or partners—are now continuous and
occur across multiple channels, including social
media, display ads, e-mail, the call center, direct
sales and the Web (see Figure 1, “Changes to
Adobe’s Business Model”).

Customer
Source:
Adobe Systems

These shifts have transformed the types of

Source: Adobe Systems

interactions

customer, product and sales data to which Adobe

1. Prasad Bhandarkar spoke at a
recent Webinar.

FEBRUARY 2014 |

has access. Whereas customer information used to

the exact data they needed rather than sorting

be limited to name, address and billing information,

through data dumps. To accomplish both of these

Adobe now collects data on how customers use

goals, Adobe needed to enable cross-functional

its products, and in what context. Used correctly,

collaboration, integrate silos of data, deliver one

such data can lead to a better understanding of

version of performance metrics, react to customer

customer behavior and even future needs.

signals in milliseconds and enable data-driven action.

The problem was, while each of its engagement

According to Prasad Bhandarkar, director

channels provided customer insights, the views

of Adobe Information Services, these goals

were fractured and channel-specific. Adobe needed

were accomplished by leveraging in-memory

to gain a more holistic view of customers, as well

computing,1 which rapidly aggregates and analyzes

as real-time insights into their behavior to deliver a

vast amounts of numerous types of data. The

highly personalized, engaging experience. It had

use of in-memory computing and analytics tools

also become essential for the company to quickly

is the centerpiece of the company’s vision of

obtain up-to-the-moment business performance

“revolutionizing the way Adobe engages with

information so that workers could quickly find

information,” Bhandarkar said.

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

FIGURE 2

Respondents were asked, “How would you
rate your ability to quantify the impact of one channel’s
performance on another (e.g., online display advertising’s
impact on search marketing)?”

600 million desktops, and 90 percent of the world’s
creators use the graphics program. The company
also offers Creative Cloud, which enables access to
Adobe applications, and Adobe Marketing Cloud,
which provides analytics and other marketing tools.

Adobe’s Business
Challenges

Adobe faced many of the issues common to

} Transforming into a
cloud business
} Using real-time data
to tailor personalized
customer experiences
} Creating company-wide
performance KPIs and
holistic customer views
} Enabling consistent
messaging across
numerous marketing
channels
} Aggregating structured
and unstructured data
from multiple sources

Channel Quagmire

A Fractured Data Environment
Adobe’s Photoshop software is currently installed on

technology businesses grappling with this new age

I don’t know
7.7%

Very good
4.8%

Poor
18.8%

of producing and marketing software. Although the

Good
16.8%

Fair
51%

company could see how a customer responded to a
specific marketing initiative, for instance, it could not
easily combine that information with that customer’s
e-mail messages and social media sentiment. A

*Total does not equal 100% due to rounding

recent study found that most marketers do not

Source: The CMO Club 2

have a holistic view across channels (see Figure 2,
and dynamic access to data. Real-time data

“Channel Quagmire”).

acquisition puts instant decision-making at the
fingertips of people throughout the organization.

Further, performance reports were often
inaccurate and inconsistent. Analytics was highly

• Versatility. The platform enables employees to

fragmented across the company, with different

visualize data using a wide variety of charts and

groups producing different numbers. And because

graphs, so they can make connections in the

executives relied on IT to query data, they had to

data more easily and share their insights readily

wait for results. The time delay was increasingly

throughout the enterprise.

unacceptable for an Internet-based business in
which second-by-second customer activity can

To ensure that the dashboard optimizes

influence marketing and sales efforts.

decision-making, the team drew inspiration for
its visualization techniques from the Louvre in

Developing a Dashboard

Paris. “There is art and poetry to make this work,”

A key piece of Adobe’s data strategy is Adobe

Bhandarkar said. Users now get answers and

Dash, a business intelligence platform that connects

insights rather than tables and numbers, enabling

data across multiple sources in real time. Because

them to discover something new about the

traditional databases cannot aggregate data on the

business every time they use the system.

fly, the company turned to in-memory computing.
Adobe had used in-memory computing in the past to

Presenting data effectively is a key component of real-

analyze large data sets to stem software piracy, and

time analytics. In a 2013 study by TDWI Research,

the effort had quickly uncovered enough information

respondents named several business benefits of

about software misuse to suggest that the technology

data visualization technologies, including improved

offered significant revenue opportunities. Adobe Dash

operational efficiency (77 percent), faster response to

offers several benefits:

business change (62 percent) and the ability to identify

• Trust. Business performance KPIs are now timely,

new business opportunities (59 percent).4

3

2. The CMO Club and Visual IQ.
“Building Bridges to the Promised
Land: Big Data, Attribution
& Omni-Channel—A CMO
Perspective.” 2014
http://goo.gl/DaItYQ
3. SAP. “Adobe: HANA Customer
Testimonial Video.”
http://goo.gl/LD5Yxx
4. Stodder, David. “Data
Visualization and Discovery for
Better Business Decisions.” TDWI
Research, 2013.
http://goo.gl/xBYyLi

accurate and undisputed. With a single set of
KPIs, Adobe can now work from a single version

New Business Insights

of the truth.

With the ability to quickly aggregate information

• Speed. Business leaders now have direct

2

Bloomberg Businessweek Research Services

from all channels via in-memory computing, Adobe

RESEARCH UPDATE | Real-Time Business Case Studies

FIGURE 3

Preference for
Personalization

promotions. In the past, it was necessary to wait

Consumers increasingly expect
personalized interactions.

in-memory computing, that data is available within

(Percent of respondents)

Would trust businesses more if they explained how
they are using personal information to improve
their online experience

77%

Adobe’s IT
Solutions

Get frustrated with Web sites that display content,
offers, ads, promotions, etc., that have nothing to
do with their interests

74%

} Fully integrated and realtime customer profiles
across channels
} Easy-to-use dashboard
with a variety of
visualization tools
} In-memory computing
for instantaneous data
aggregation and analysis

Are OK with providing personal information on a
Web site as long as it is for their benefit and being
used in responsible ways
57%
Source: Janrain/Harris Interactive, 2013

24 hours to ascertain a promotion’s impact. With
minutes, enabling Adobe to tweak the promotion
immediately to improve results. Knowing what is
happening with promotions within a 15-minute
window is far more powerful than having a one-day
delay, and the agility for executive decision-making
is game changing, according to the company.
The best forward-looking measure for any cloud
business is how actively customers are using
the product. For example, if a customer’s usage
of the Marketing Cloud or Creative Cloud starts
to decrease a few months before the annual
subscription ends, that is a clear warning sign,
and the sooner that Adobe can see this trend
happening and respond to it, the better chance it

can now provide more personalized customer

has of retaining customers.

interactions and a consistent experience across
channels. For instance, when customers click on

Adobe executives can easily see everything in the

e-mails or display ads, the company can create an

digital pipeline, including top customer issues, and

identity composite for them, and tailor the message

for further information, they can drill-down on the

based on that information, as opposed to providing

fly. The company plans to enable this capability on

them with generic messaging. Such personalization

mobile devices in the future, as well. In fiscal 2013,

aligns with customer preferences; in a recent

Adobe saw an uptick for its efforts. Creative Cloud

study, consumers said they prized personalized

subscriptions grew by 1.1 million, and subscriptions

marketing that catered to their interests (see Figure

to Document Services doubled to more than 1.6

3, “Preference for Personalization”).

million. Adobe Marketing Cloud achieved a record
$1.02 billion in annual revenue, representing 26

On the business performance side, when

percent year-over-year growth.

Adobe employees have questions about order
management and booking, they can slice and dice

Using in-memory computing, data visualization

data in many ways—such as by financial quarter

and advanced analytics, Adobe is able to fully

or certain geographies—and receive an answer

operate as a cloud-based company. It can see a

in three seconds. “That capability never existed

complete and updated view of customers across

before,” Bhandarkar said. “As our business changed

channels, personalize customer interactions and

to a subscription model, it’s become even more

make profitable business decisions based on in-

important for us to know on a day-to-day basis

the-moment data. By leveraging real-time big data

what customers are doing inside the product.”

analytics, high-tech companies such as Adobe are

With Adobe’s in-memory system, an order that

laying the foundation needed to compete today and

was booked five seconds before shows up in the

in the future. •

aggregated numbers.
Additionally, Adobe can quickly analyze customer
acquisition and usage patterns to optimize

3

Bloomberg Businessweek Research Services

Joe Mullich is a freelance business and technology
writer based in Sherman Oaks, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Alliander at a glance
A regional grid operator for gas and electricity
in the Netherlands
Industry: utilities
Headquarters: Arnhem, Netherlands
Business units: Alliander manages the gas
and electricity grids in many areas of the Netherlands; Liandon works on energy infrastructures for high-voltage, complex medium-voltage and industrial installations
2013 Revenues: €1,744 million
Employees: 6,000
www.alliander.com
Source: Alliander

Page

10

RESEARCH UPDATE | Real-Time Business Case Studies

Alliander Energizes Its Business
with Real-Time Analytics
A Netherlands utility is using real-time business insights based on big data to boost reliability, lower
costs and transform customer relationships.
BY JOE MULLICH

A

lliander, a regional grid operator for gas and electricity in the Netherlands, is
grappling with an issue that is becoming widespread among utilities:

unpredictable demand due to rapid changes in customers’ energy consumption

Alliander at a
Glance

behavior. Energy-hungry devices such as plug-in electric vehicles (PEVs), as well as

Headquarters: Arnhem,
Netherlands
Business units: Alliander
manages the gas and
electricity grids in many
areas of the Netherlands;
Liandon works on
energy infrastructures for
high-voltage, complex
medium-voltage and
industrial installations
2013 Revenues: €1,744
million (US$2,386 million)
Employees: 6,000
www.alliander.com

unconventional energy sources such as solar and

FIGURE 1

wind, have fundamentally changed the energy

Respondents were asked in which areas they
see analytics having the greatest impact on smart solutions
deployment. (% responding)

Source: Alliander

landscape. Case in point: There are now over
1,030 public charging points for PEVs in the
regions where Alliander is active, of which more
than 300 were realized just last year.

1

Such changes are heightening the need for Alliander
to improve peak load forecasting in its networks
quickly and accurately. Failing to do so could lead to
higher operating costs or, worse, network outages
that leave customers angry and without power.
Consequently, a good part of Alliander’s future
hinges on using real-time data to make
“unpredictable demand” more predictable by
leveraging the information that smart meters, smart
grids and enhanced customer relationship
management systems provide. The utility is applying
this great mass of data to other real-time uses, as

Wide Range of Analytics Value

Grid operations


96%

Asset management

Outage management

AMI operations


92%

85%

77%

Demand response


73%

Customer operations


73%

Revenue protection/theft reduction

52%

well. Jill Feblowitz, vice president at consultancy IDC
Energy Insights, said that as utilities work to realize

Base: 54 utilities in 13 countries
Source: Accenture, 2013. http://goo.gl/mwjiLS

more value from their smart meter implementations,
“analytics will be the trend that has the most impact

Lots of Data, Big Payoff

over the next five years.”

In the utility industry, lots of data is accumulating rapidly:
Smart meters in consumer homes gather usage data;

1. Alliander. “Alliander is working
on a sustainable future.” Alliander
press release, Feb. 14, 2014.
2. Accenture. “Unlocking the Value
of Analytics.” Research report,
2013. http://goo.gl/mwjiLS.

MARCH 2014 |

Indeed, a 2013 Accenture survey revealed a broad

the smart grid collects data from the devices in the

array of business functions that utilities say would

network; and a significant amount of data comes

benefit from better analytics (see Figure 1, “Wide

courtesy of those who generate energy with solar

Range of Analytics Value”). The need to use

panels or wind power. And utilities expect a big return

dynamic and granular data to make decisions in the

from all this data. A 2013 survey by Tata Consultancy

moment is fast becoming an industry imperative.

Services found that both utilities and energy/resources

2

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

FIGURE 2

generating returns on investment in big data3 (see
Figure 2, “Big Data Expectations”).

Of all industries, utilities expects the biggest
returns on its big data investment. (mean percentage of
expected ROI for 2012 big data investments)

Alliander itself has been on a data quest. The utility

Utilities


dramatically increased the number of sensors

Alliander’s
Business
Challenges

throughout its grid, enabling it to gather larger data
volumes for analysis. Measurement data is sent at
five-minute intervals, and the sensors generate 3.15

} Improve forecasting of
peak energy usage.
} Provide customers with
greater insight into
energy consumption.
} Gain fast access to large
volumes of
measurement data for
analysis.

Big Data Expectations

companies have the highest expectations for

billion records every year—a huge repository to mine
for information and insights.4
To analyze the data quickly enough to apply insights
computing, technology that enables very large
volumes of diverse sources of data to be rapidly and
easily analyzed. The utility has seen a number of
benefits, including more accurate forecasting of

} Expanded network to
22,000 sensors spread
across 400 substations.
} Implemented in-memory
computing to speed
data analysis.
} Set up wireless mobile
telecommunications
network.

manual tasks, improved auditing and reduced

60.6%

High tech

52.4%
Average

45.5%
Banking/financial services

43.7%

in a timely fashion, Alliander turned to in-memory

Alliander’s IT
Solutions

Energy/resources


73.0%

Insurance
38.9%
Travel/hospitality/airlines

37.9%

energy demand, greater efficiency by automating
energy costs for customers.5

Telecommunications

37.9%

Transforming Customer Relations

Source: Tata Consultancy Services, 2013

According to a 2013 IDC Energy Insights study, the
highest business priority for utilities today is

meters send granular data on energy consumption directly

increasing customer satisfaction, followed closely by

to utility companies, and some utilities use small wireless

reliable service delivery and operational cost

displays to show people how much energy and money

reductions. Analytics helps utilities achieve this goal

they are spending in real time. A survey by uSwitch, an

by changing the customer relationship to a

energy price comparison service in the United Kingdom,

partnership. For instance, using smart meter data,

found that consumers with smart meters are more likely

utilities can work with customers on using energy

to partake in energy-saving behaviors 8 (see Figure 3,

more efficiently and reducing their bills.

“Satisfaction with Smart Meters”).

Customers can also play a role in helping utilities

At Alliander, customers who have real-time access to

achieve their own conservation goals. Robin

data about their energy usage have reduced energy bills

Hagemans, manager of grid information and control at

by 10 to 20 percent per month. “We need to help our

Alliander, noted the utility’s aggressive goals of reducing

customers at the household level to use their energy

carbon emissions by 20 percent by 2020 and boosting

much more wisely,” said Jeroen Scheer, manager

renewable energy use by the same amount. That

taskforce energy transition IT at Alliander.9

6

3. Tata Consultancy Services.
“The Emerging Big Returns from
Big Data.” Research report, 2013.
http://goo.gl/NhEUgW.
4. Tekurkar, Shailesh. “Leveraging
the ‘Smart Grid’ for Smart
Decisions on Network Asset
Replacements.” Analytics from
SAP blog, Nov. 13, 2012.
http://goo.gl/E5PD6V.
5. Shailesh Tekurkar.
6. Feblowitz, Jill. “The Digital
Utility.” IDC Energy Insights
executive summary. September
2013.
7. Koster, Stefan. “How Alliander
is accelerating its load forecasting
process using SAP Analytics.” SAP
presentation. May 28, 2013.

goal, he said, can be reached only if consumers

Forecasting Peak Loads

become more active participants in the process of
conserving energy and balancing their energy use.

7

Perhaps an even bigger advantage of analyzing data from
smart grids and smart meters in real time is the capability

2

The rapid speed of in-memory computing produces

to accurately forecast demand, which enables utilities to

the insights needed to do just that, and it helps

predict and head off likely outages, as well as to identify

Alliander better engage with its customers. Smart

leaks and fraud. Better forecasting enables utilities to plan

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

Satisfaction with Smart Meters

future investments that prevent network overloads.

FIGURE 3

Such forecasts are tricky, though, because the

Customers with smart meters report high
satisfaction with their provider. (% responding)

substation load depends on numerous variables—
demographic growth, seasonality, consumption
forecasts, specific events and more.

Are happy with their smart meter


Real-Time
Business Benefits
at Alliander

In the past, collecting and analyzing the enormous

Would recommend having a smart meter installed

87%

} Reduced time for
forecasting and grid
optimization from 10
weeks to three days.
} Implemented 85 new
business models to
analyze operations.
} Helped customers
reduce monthly energy
bills by 10 to 20 percent.

grid optimization once a year. With in-memory

amounts of data required 10 weeks of effort. As a
result, Alliander would only perform forecasting and
computing, that process can be accomplished in a
mere three days. Consequently, the utility can

92%

Use it to monitor energy usage and reduce
consumption
81%
Are more likely to turn off lights when not in use
51%

monitor the transformer stations, detect sensor
problems automatically and forecast future power
loads once a month. This provides a more
accurate forecast, much deeper insight and greater
opportunities to drive efficiency.10

Better understanding of which actions consume
the most energy
41%
Base: 5,057 U.K. households with a smart meter installed
Source: uSwitch, 2013

“We can optimize our grid and create new models
we couldn’t think of a year ago,” Scheer said.

Such efforts include setting up a wireless mobile

Indeed, as a result of the efforts, Alliander has

telecommunications network to facilitate the exchange

created 85 new models to analyze its operations

of all information within the utility’s grids. “The impact of

more effectively. “We found out that 5 percent of

the energy transition is becoming increasingly visible,”

the peaks determined last year were inaccurate,”

he said. “For instance, more and more renewable

according to Stefan Koster, BI & analytics solution

energy is being generated, and this will have major

architect at the utility. The new algorithms help

consequences for the networks in the long term.”14

detect more errors, leading to more efficiencies.

11

In the IDC Energy Insights report, Feblowitz

8. Martinelli, Michele. “New
research shows consumers are
happy with smart meters.” USwitch
news, Dec. 12, 2013.
http://goo.gl/0UDnUi.
9. Scheer, Jeroen. “Alliander
and SAP HANA.” SAP customer
testimonial video.
http://goo.gl/cS0CoV.
10. Courtney, Martin. “How
utilities are profiting from Big
Data analytics.” Engineering and
Technology Magazine, Jan. 20,
2014. http://goo.gl/r60uhi.
11. Stefan Koster.
12. Martin Courtney.
13. Alliander press release.
14. Alliander press release.
15. Hagemans, Robin. “Alliander
Smart Grid Analytic Use Cases
Based on a Live Mid-voltage Grid
Lab.” OSIsoft EMEA industry
session, 2013.
http://goo.gl/ubKnOy.
16. Szirtes, Tamas. “Business
Innovation Experience – a
resounding success.” Intenzz blog,
Feb. 6, 2013.
http://goo.gl/O9D3Wc.

Business Reinvention

recommended that utilities fortify their information

Market analyst firm GTM Research predicted

and telecommunications infrastructure and

global utility company expenditures on data and

applications so they can support advanced analytics

analytics will grow from $700 million in 2012 to

such as forecasting, predictive load, simulations and

$3.8 billion in 2020, with gas, electricity and water

optimization. One specific capability she cited is

suppliers in all regions of the world increasing

integrating demand information with geospatial

their investment. This will result in “a complete

visualization tools. Alliander is already going down

reinvention of the utility business,” according to

this track. 15

analyst David J. Leeds.

12

As Pieter den Hamer, manager of business intelligence
As Alliander looks to the future, it is seeking to boost

and analytics at the utility, put it: In the current utility

the insights gained from network data. Peter

landscape, “Innovation is not just something extra, but

Molengraaf, Alliander CEO, said the company’s main

it’s a necessity.”16 •

focus is “making the right choices for the future of
our networks. Whilst continuing to maintain and
replace our existing electricity and gas networks, we
are also preparing for the radically changing energy
landscape of the future.”

3

13

Bloomberg Businessweek Research Services

Joe Mullich is a freelance business and technology writer
based in Sherman Oaks, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

ARI at a glance
Largest privately held fleet management services
company in the world
Industry: automotive
Parent company: Holman Automotive Group
Employees: 2,400 worldwide
Headquarters: Mount Laurel, New Jersey
www.arifleet.com
Source: ARI

Page

14

RESEARCH UPDATE | Real-Time Business Case Studies

In-Memory Computing Drives
Fleet Savings at ARI
The world’s largest privately held vehicle management company is turning big data into
real-time insights and predictions that deliver unprecedented business value to customers.
BY ESTHER SHEIN WISHNOW

A

n employee driving a company car or truck may think he is doing the business a big
favor by purchasing gas at a low-cost fuel station a few miles out of his way. What he

cannot know is that the station has a higher incidence rate of accidents because it is located

at a dangerous intersection. But ARI knows. Thanks to

can be made in minutes, not months. With its data

AN EXCLUSIVE

in-memory technology, the company is quickly turning

volume doubling every 14 months, that has become an

RESEARCH REPORT

seemingly unrelated datapoints into insights its customers

ever-greater challenge, which is why ARI invested in an

FROM BLOOMBERG

can use to optimize fleet efficiency—before they make a

in-memory database. The solution has reduced response

BUSINESSWEEK

wrong turn.

times on delivering information to customers and solved

RESEARCH SERVICES

AT A GLANCE

its “data latency problem,” says Tony Candeloro, vice
ARI manages more than 950,000 vehicles in North

president of product development (see Figure 1, “In-

America and the United Kingdom. With its two million

Memory Computing: The Payoff for ARI”).

worldwide associates, the company collects up to 14,000
datapoints on each vehicle, including specifications,

Real-time analysis of very large date sets is possible with

ARI at a Glance

maintenance, fuel, safety and value. It also captures

high-performance, in-memory database technology, says

Industry:

telematics information through onboard computers,

Hyoun Park, principal analyst at Nucleus Research. HANA

Vehicle fleet management

including how fast a vehicle is moving, when it makes a

from SAP, for example, provides orders of magnitude

Company description:

left- or right-hand turn and where it has stopped.

performance increases by accelerating information delivery
and queries, he says. “A lot of processes that have slowed

Largest privately held fleet
management services

In the past, ARI used this information to provide reports

down as companies deal with huge amounts of data

company in the world

and recommendations to customers. But staying

are now being brought back to operational levels where

Parent company:

competitive today means delivering insights so decisions

companies can get data quickly again.”

Holman Automotive Group
Employees:
2,400 worldwide
Headquarters:
Mount Laurel, N.J.
Web site: www.arifleet.com

FIGURE 1

In-Memory Computing: The Payoff for ARI

Running a report or query before in-memory

Up to two hours; some reports were so complicated

technology

they would time-out after 24 hours

Running a report or query with in-memory technology

Three seconds

Number of datapoints captured per vehicle

14,000 (late 2011 into early 2012)

Number of vehicles in ARI’s fleet

Roughly 950,000 in North America

ROI

5% efficiency improvement in the call center

Source: ARI

JULY 2013 | © Copyright 2013. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

Speed Equals Value

Moving those large silos into a real-time environment was

This was the situation at ARI: the need to drive the

a challenge, says Bob White, senior vice president of

information it captured to its fullest potential—quickly.

client and fleet relations at ARI. “Before we implemented

“Once you have all the data, it’s about how you analyze

this technology, working with the data on a real-time

and correlate it to make better decisions,” Candeloro

basis to draw correlations and spot trends was difficult,”

says. “While we have always helped our clients manage

he says. The in-memory system provides employees

ARI’s Data
Challenges

their fleets efficiently and worked to deliver the lowest

with new real-time insights to create more value for

total cost of ownership possible, the time it took to

customers. “[We can] leverage that data in a timeframe

Manage data growth:

decipher all of the data and make day-to-day decisions

that meets the business need,” White says.

With 14,000 datapoints

was becoming more difficult as our data volumes grew.”
Now, if a technician is told that a brake fix on a truck

collected per vehicle, ARI’s
data volumes are doubling

For example, to manage the cost of vehicle repairs,

will cost $500, he can see 25 similar repairs on similar

every 14 months.

ARI’s technicians need to authorize the right repair at the

vehicles within an identified geographical radius. This

Speed decision-making:

right cost. “Historically, a vendor would call us seeking

information makes negotiating on the fly a lot easier.

Data volumes were

authorization for a repair. If our techs agreed with the

Before, “we were doing millions of transactions, so we

increasing the time it took to

diagnosis, they would negotiate the best possible price

didn’t even attempt it,” White says. When customers

run reports and queries.

for that repair by using their own expertise and the best

needed more granular data, it required a lot of manual

Improve insights:

information they had on hand at that time,” Candeloro says.

work. “Now, we can leverage more data to make better
decisions,” he says, “and we’ve also improved the overall

ARI wanted to arm fleet

transaction time by a little more than five percent.”

managers with real-time

As time went on, he says, ARI wanted a solution

insights so they could make

that would enable better and quicker decisions. The

decisions that optimized

company implemented a data warehousing strategy

A majority of ARI’s employees are using the system on

efficiency.

that ported data from its transactional database into a

a daily basis, and 80 customers are using it through

real-time in-memory database, built some data models

the customer portal, ARI insightsTM. When customers

and conducted a pilot with one of its customers. Then,

submitted inquiries in the past, employees would search

with the help of HP, ARI moved the system in-house in

for information in the various systems and create reports,

December 2011. By the start of 2012, Candeloro says,

which could take several days to produce. “Now, our

ARI was up and running, building queries and “data

frontline employees can run the queries themselves,”

universes” based on detailed data previously segmented

White says. “By putting the tool in a customer’s hands,

into separate silos on disparate systems.

we are empowering our clients to make better decisions.”

FIGURE 2

ARI’s In-Memory Technology: What the Future Holds

Capability

Example

Predictive data mining: Spotting trends and patterns

Recommending a repair before a failure occurs.

ahead of time to be proactive rather than reactive.
Benchmarking: Designing models that gather trend data

Calculating a cost-of-ownership baseline across

on all vehicles to create a baseline and then identifying

fleets with similar vehicles and identifying those that

outliers.

exceed the baseline.

Changing driver behavior: Finding correlations between

Discovering a link between fueling locations and

events that seem unrelated at first glance and using that

accidents.

information to make recommendations.
Source: ARI

2

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

ARI’s salespeople can also work more effectively with

FIGURE 3

customers and prospects, he adds. And in its call
centers, which include about 400 employees, ARI has

A Surge in Predictive Analytics

increased efficiencies by about 5 percent, White says.

Primarily using predictive analytics
12%

33%

“That one area alone has probably more than covered our
investment, and we’ve just begun to discover all of the

Elements of
ARI’s Real-Time
Analytics Solution

ways to leverage it,” he says.

Looking Ahead

In-memory database:

Candeloro says the company has only skimmed the

Using an in-memory

surface in terms of realizing the full potential of in-

database, ARI can quickly turn

memory technology (see Figure 2, “ARI’s In-Memory

data into insights that help

Technology: What the Future Holds”). ARI is planning

its customers optimize fleet

to use data mining capabilities to spot trends and

efficiency.

patterns “so we don’t just react to a phone call but

Integrated data:

get ahead of it and use the predictive angle,” he says.

Data “universes,” created

For example, White says, employees have already

within the in-memory

detected trends that predict needed repairs on a truck

database, integrate data from

before a major failure occurs. “We can recommend to

disparate systems.

our customer that they preemptively have that repair

Customer portal:

done,” he says.

A majority of ARI’s employees

Primarily using retrospective analytics

31%

29%
Using both equally


28%

2009
2012

50%

Don’t know
1%
10%
Base: 600 companies in the United States and United Kingdom
with 1,000-plus employees
Source: Accenture

station example. “If, for example, you know a driver
fuels at a particular gas station, and you also know this

use the system daily, and

Another goal is to begin benchmarking, building models

group of vehicles has a higher percentage of accidents,

select customers run their

to look at all similar vehicles managed by ARI and

once you look at those two together, you may make a

own queries using the

determining their baseline cost. This way, the company

recommendation not to fuel at that location depending on

customer portal.

can easily identify the outliers and take corrective action,

what the data actually reveals,” he says.

Data mining:

Candeloro says.

ARI plans to use predictive

According to a 2013 study by Accenture, more than

analytics to spot trends and

Keeping up with all of the variables involved in the cost

twice as many respondents are now using analytics

patterns among seemingly

of fleet management—where vehicles are used, who is

primarily as a predictive tool than in 2009 (see Figure 3,

unrelated data points.

driving them, the environment in which they operate, the

“A Surge in Predictive Analytics”). “This surge reflects

time of day, accidents, driving patterns and the amount

a growing sophistication in analytics capabilities that

of idle running time—is ARI’s main challenge. “We try

anticipate tomorrow rather than explain yesterday,”

to track and manage those variables, but a lot of them

according to Accenture.

interact with and impact each other,” Candeloro notes.
“If you’re idling a vehicle a lot, you may need to do

White says ARI is continuously thinking about whether the

preventive maintenance more often. And because we

data it is collecting can predict an outcome. “The ability

have the ability to look at that information, we can push

has always been there,” he says. Until now, “we just

out recommendations to our customers. That was very

didn’t have the tools to unlock it.” •

difficult to do in the past.”
As the company moves further into predictive analytics,
Candeloro says ARI hopes to find the not-so-obvious
correlations between seemingly unrelated events, such
as how fuel patterns impact accidents, as in the gas

3

Bloomberg Businessweek Research Services

Esther Shein Wishnow is a freelance writer and editor
whose work has appeared in several online and print
publications including Computerworld, InformationWeek, BYTE, Network Computing and CIO.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

CareFusion at a glance
Makes products that help reduce medication errors
and reduce health-associated infections
Industry: healthcare
Headquarters: San Diego, California
Customers: more than 25,000 worldwide, including
hospitals, surgery centers, long-term care facilities,
outpatient and ambulatory clinics, governments and
insurance providers
Focus areas: medication management; infection prevention and surveillance; operating room effectiveness;
device connectivity; data and analytics; respiratory care
Revenues: $3.55 billion (fiscal 2013)
Employees: more than 14,000
www.carefusion.com
Source: CareFusion

Page

18

RESEARCH UPDATE | Real-Time Business Case Studies

Real-Time Business Leads to Healthy
Performance at CareFusion
CareFusion employs in-memory computing to transform its business, improve operating
margins and accelerate revenue growth.
BY JOE MULLICH

CareFusion at a
Glance
Headquarters:
San Diego, Calif.
Customers: More than
25,000 worldwide,
including hospitals,
surgery centers, longterm care facilities,
outpatient and ambulatory
clinics, governments and
insurance providers
Focus areas: Medication
management; infection
prevention and
surveillance; operating
room effectiveness;
device connectivity; data
and analytics; respiratory
care
Revenues: $3.55 billion
(fiscal 2013)
Employees: More than
14,000

A

round the globe, demands for healthcare reform are causing the life sciences
industry and its customers, the care providers, to look for efficiencies. CareFusion,

the $3.5 billion maker of products that help reduce medication errors and reduce health-

Meeting the Challenge to Change

associated infections, intends to be at the front line

FIGURE 1

of this transformation, promising quality and safety
at reasonable cost.

Life sciences CEOs view data and analytics
among the initiatives that are critical to transformation.
(% responding)

In its efforts to achieve this goal, CareFusion has

Channels to market


averaged one major acquisition annually since its
spinoff from Cardinal Health in 2009. To date, the
acquisitions have bolstered CareFusion’s product
line with technologies that improve respiratory care
and deliver intravenous drugs to patients. But they
have also created management challenges.
Each of the acquired companies had its own
systems for strategic planning, which made it
difficult for CareFusion to get a global view of its
data. Yet comprehensive planning was essential for

57%

Use and management of data and data analytics
56%
M&A strategies, joint ventures or strategic alliances

55%
Customer growth and retention strategies

50%
Approach to managing risk


50%

Source: PricewaterhouseCoopers, 2014. http://goo.gl/QgoZwG

the company to reach its aggressive goals. “The first

www.carefusion.com

two years of growth we called a ‘standup’ phase,

CareFusion found a way to assemble a global view of its

Source: CareFusion

which was the separation” from Cardinal Health,

operations to improve the collection and consolidation of

CareFusion CEO Kieran T. Gallahue told analysts in

information it needs for better planning and strategic

2013. “The last two years began what we call the

decision-making. The company is using financial

‘building the foundations for growth’ stage,” which,

forecasting and planning software in combination with

he said, could only be achieved by streamlining the

in-memory computing, a new database and analytics

organization and reducing costs.1

platform that enables very large volumes of data to be
aggregated and analyzed quickly to answer any question

1. Nasdaq information on
CareFusion. http://goo.gl/1Ncrfb.
2. PricewaterhouseCoopers Global
CEO Survey: Pharmaceuticals and
Life Sciences. 2014.
http://goo.gl/QgoZwG.

MAY 2014 |

The same theme resonates throughout the life

almost instantly. Organizations frequently use in-memory

sciences industry. An annual global survey of

technology to make more accurate budget forecasts, run

pharmaceutical and life sciences CEOs by

“what-if” scenarios faster and gain better insight into

PricewaterhouseCoopers found transformation on

customer relationships.

their corporate agendas, including new business
structures, technology investments, and the use of

“The entire healthcare industry has been inefficient

data and analytics2 (see Figure 1, “Meeting the

relative to other industries,” observed Mike Zill, executive

Challenge to Change”).

vice president and CIO at CareFusion. “That needs to

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

CareFusion’s Complex Operations

change, and we are dedicated to being a force that

FIGURE 2

helps lead the change.”

The company needs to consolidate and analyze
data about two dozen major brands in four product areas.

A Unified View
More than 14,000 CareFusion employees around the
world manufacture products purchased by more than

CareFusion’s
Challenges

25,000 healthcare providers. That makes the

} An acquisition spree
resulted in disparate
ERP systems that could
not share data.
} Financial, employee
and customer data was
difficult to consolidate and
analyze in a timely way.
} Executives lacked
confidence in the
accuracy of the data
used to make decisions.

explained (see Figure 2, “CareFusion’s Complex

company’s operations complex to manage, Zill
Operations”). Meanwhile, the pace of business
demands that CareFusion be able to run multiple
business scenarios quickly, using the most accurate

Product area

Number of brands

Infection prevention

4

Respiratory care

6

Medication management

8

Operating room effectiveness

6

Source: CareFusion. http://goo.gl/rtgQkn

data possible.
it would take to run one, Zill said. Current numbers

CareFusion’s
Solutions
} Deployed realtime planning and
consolidation software
that automates and
streamlines planning,
budgeting, forecasting
and consolidation
activities.
} Adopted in-memory
computing to speed
data collection and
analysis.

Yet data from each unit had to be pulled out manually.

lead to better estimates, more precise analysis and

Only averaged, historical numbers were available for

improved decisions. CareFusion can determine

analysis. As a result, reports were produced slowly,

within minutes how departments are performing and

and their reliability was hard to assess. “Data is a

the potential impact of adjustments. Michael DeLeo,

reflection of the organization,” said Wayne Eckerson,

financial manager for financial systems at

director of the research, business applications and

CareFusion, said the company’s efforts are in line

architecture group at consultancy TechTarget. “If you

with an industry trend to compile and consume data

have fragmented, autonomous business units, you’ll

more rapidly.3

have fragmented data.”

More Timely Action
So the CareFusion finance team led the charge to

What is more, because CareFusion executives can

unify the company using real-time analytics. “There is

now accurately track, in real time, how their

a saying: Time kills all deals,” Zill continued. “If the

adjustments play out, they can more quickly agree on

executives are having a discussion, they won’t accept

specific actions that different groups need to take to

waiting while you pull together the data they need.”

achieve financial goals.

A survey by IDG Enterprise found improving the
quality of decision-making, making quicker decisions,

When building a budget or forecast, for example,

and improving planning and forecasting to be the top

CareFusion often needs to model changes to

business drivers for investing in analytics (see Figure

employee-related costs, like benefits, tax rates and

3, “Better Decisions Through Data”).

international currency changes. Previously, adding a
new benefit or calculating the impact of a health

During each fiscal year, CareFusion compiles and

insurance cost increase required a lot of manual

reviews several iterations of its budget, adjusting for

work. Information would be gathered from local

business results. Before the company was able to

controllers and payroll groups to determine which

quickly assemble and analyze its financial data, it

employees would be affected. The financial

was difficult to determine whether departments were

department then would forecast the impact of the

meeting their individual targets. Without this

proposed changes and apply the anticipated cost for

information, CareFusion could not make timely

each group to its budget.

course corrections.
3. “Controlling 2013 Speaker
Profile: Michael DeLeo, Finance
Systems Manager at CareFusion,
Inc.” ERP Corp. blog, 2013.
http://goo.gl/PZGAZx.

The process took a week or more, and verifying the

2

With real-time data, however, the company can run

accuracy of the data was difficult. “There was no easy

more—and more sophisticated—models in the time

method to ensure that all required employees and cost

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

centers have been accounted for in the adjustment,”
Zill said. If the actual costs turned out to be different
than the forecast, it was equally challenging to
determine exactly why. The variance could be due
to one or more factors—including incorrect
calculation methods or changes in expected

FIGURE 3 Better Decisions Through Data
Business drivers for investment in analytics

include the following. (% responding)

Improving the quality of decision-making


Benefits of RealTime Business at
CareFusion

employee headcount or benefit eligibility.

Making quicker decisions


Now, the company can make more precise

} Increased availability:
Information to make
key decisions that took
more than a week to
pull together can now
be delivered in minutes.
} Deeper insight:
Analysts can explore
questions of profitability
in detail at both the
customer and the
product level, as well
as run more “what-if”
scenarios.
} Improved forecasts:
By using real-time data,
and gaining flexibility
to include more data
sources in its analyses,
CareFusion can
create more accurate
forecasting models.

forecasts at the enterprise level, and make them in

Improving planning and forecasting


near real time. And when variances between
planned and actual costs occur, CareFusion can
determine the reason more easily, according to Zill,
and decide quickly the best way to bring the budget

59%

53%

47%

Developing new products, services and
revenue streams

47%
Source: IDG Enterprise Big Data Study, 2014. http://goo.gl/BNImWX

back in line. That is essential to achieving the
efficiencies the life sciences industry seeks, he said.

big payoff, both to expanding margins and the
bottom line.4 Now that the company has proven that

New Perspectives and Insights

the in-memory platform and advanced analytics

Zill added that the most valuable benefit of having

models enable it to understand its costs at a greater

real-time data is obtaining new insights. For

level of detail, with more accuracy and in less time, it

example, CareFusion can model profitability down to

intends to expand these capabilities to other models

both product and customer levels, giving it a more

and other data sources, Zill said. 

granular view to aid decision-making.
For example, he added, for consumable products,
In the past, Zill said, the company might have only

CareFusion plans to model sales based on historical

been able to get a partial view of its relationship

trends and seasonality.

with a customer. Now that it can consolidate and
analyze all the data from different units,

“These revenue models will provide us with a basis

CareFusion will use this technology to discover, in

for forecasting manufacturing costs and profit

the moment, which units customers purchase

margins,” Zill said. “They will allow us to further

from and how best to allocate company resources

improve our accuracy, efficiency and ability to plan

to properly serve customers. 

for changing business needs.” 

“We can approach the model-making at a much

Zill envisions expanding the use of in-memory

greater level of detail,” Zill explained. “This happens

computing to many additional areas—including

because we no longer have to worry about the size

mergers and acquisitions, research and

of the data anymore. In the old days, you had to

development, sales and marketing—which will bring

think in terms of the minimum amount of data you

the enterprise-wide improvements that are needed

could bring together and still answer the question.

to propel CareFusion, and its healthcare customers,

Now we don’t have to be so smart about eliminating

to a new era of higher efficiency. •

information, so we don’t throw away nuggets. That’s
mind-freeing and time-freeing.”

Consider More Data
According to CareFusion’s Gallahue, the intense

4. Nasdaq information on
CareFusion. http://goo.gl/1Ncrfb.

business integration work has already produced a

3

Bloomberg Businessweek Research Services

Joe Mullich is a freelance business and technology
writer based in Sherman Oaks, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

City of Boston, Massachusetts at a glance
Capital of the State of Massachusetts, founded in
1630
Industry: public sector
Population: 626,000
Size: 48 square miles
City employees: 16,173
Education: 53 institutions of higher education
Firsts: U.S. public school, subway system
www.cityofboston.gov
Source: City of Boston

Page

22

RESEARCH UPDATE | Real-Time Enterprise Case Studies

Boston’s Better Community Connections Through Big Data and Analytics
With in-memory computing and analytics tools, the City of Boston is providing better service to
citizens and engaging more with the community.
BY JOE MULLICH

M

any government agencies talk about the transformational power of big data and analytics.
Bill Oates, chief information officer for the City of Boston, is doing something about it. He says

this starts with making better connections—between citizens and the community, multiple government
departments and even other cities.

Boston at a Glance
} Founded: 1630

“Business process change is table stakes at this point,”
Oates says. “The importance of the technology is its
ability to engage and empower our constituents.”

} Population: 626,000

Citizens Connect: Empowering
Constituents with Big Data and
Analytics
} 34% of citizen reports via mobile and online app
} 89% of citizens would recommend it
} 21% rise in constituent satisfaction
} Pothole repair time cut in half

} Size: 48 square miles

For Boston, a new form of engagement began in 2008

} City employees: 16,173

with the launch of Citizens Connect1, a system that

} Education: 53 institutions
of higher education

enables citizens to report potholes, graffiti, damaged

} Firsts: U.S. public
school, subway system

their smartphones. A unique twist of the technology,
then and now, is that citizens do not simply report

Like many cities, Boston has a growing number of sources

www.cityofboston.gov/

the problems to the government. Rather, reports and

of data to analyze. To help it cope, the city is ahead in

Source: City of Boston

photos are published anonymously online, spreading

taking visual analytics to a new level. For example, in 2010

word of the issues and inviting discussion and

the Boston Police Department opened a “real-time crime

participation in Citizen Connect.

center” that receives dozens of feeds from street cameras

signs and other issues through the Internet and, later,

around the city. The resulting data gives researchers
Since then, Boston has introduced Street Bump ,

the potential to visually analyze and match videos from

which enables people to use their smartphone’s

incidents to help identify suspects, mobilize resources and

accelerometer—a motion detector in the device—to

even map evacuation routes during emergencies.

2

record road conditions and send data to public works
employees. Unlike Citizens Connect, the Street Bump

Big Data Makes More Satisfied Citizens

app does not require a citizen to take action to report

Boston’s experience with in-memory computing and

issues. He simply turns on the app and, as he drives,

big data analytics reveals intriguing insights about

data is automatically collected and sent to the city.

the opportunity for collecting and using big data. For
example, residents were polled on why they failed to

Street Bump was expected to identify the location of

contact the city about maintenance issues before the

potholes—a top concern of Boston residents. Thanks to

Citizens Connect app. Their answer: When they call the

analytics, the early data has provided some unexpected

city, they feel like they are complaining; when they use the

insights: trouble spots are eight times more likely to be

app, they feel like they are helping.

“castings,” those manhole covers, grates and other cast-

1. Citizens Connect: Making Boston
Beautiful.
http://tinyurl.com/642ymk3
2. Street Bump.
http://tinyurl.com/mjeb4q8

metal lids that are supposed to be flush with the roadway

The ability to rapidly share data and analytics has had a

surface but instead heave up due to the extreme cold of

measurable effect. Today, 20 percent of citizen reports

a New England winter. Hundreds of these castings have

come through the Citizens Connect app and another

been repaired as a result.

14 percent through the city’s Web site. The number of

SEPTEMBER 2013 | © Copyright 2013. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

citizen reports has doubled, as well, from 40,000 a year
prior to the technology to 80,000 a year today. A reason

Boston’s IT Challenges

for the greater participation may be the quick results that

} Quicken innovation

follow. Since the city implemented Citizens Connect, the

} Encourage citizen involvement

response time to fill a pothole has been cut from three

} Share big data across departments

days on average to half that amount.

“We met with interested

Similarly, the original prototype of Street Bump could not

researchers, technol-

distinguish between potholes, manhole covers, bridge
surfaces and other obstacles, so the app generated a lot

ogists and community

of false positives in the field.3 A crowdsource challenge

members to figure out

enabled the city to implement a new algorithm to analyze

how we could use data

the big data coming in more accurately.

} Speed repair of potholes and other issues

Boston’s IT Solutions
} Formed the Office of New Urban Mechanics—
an incubator that pilots new ideas quickly
} Partnered with citizen groups, businesses and
universities to share data and ideas
} Developed apps that enable citizens to report
issues easily
} Developed apps that enable citizens to collect data

to improve quality of life

In Oates’ view, big data is all about information sharing in the

issues. Being able to

about road conditions automatically as they drive

public sector. He has found that the combination of the right

connect newly available

data, timely analysis and visualization is most effective when

city data with some of

information and analytics are shared across departments.

It also indicates the new thinking that is needed to

the real big data out

“In the past, an agency might crunch its own data to

leverage the power of big data. Oates points to the Office

there in the world can

get a historical comparison on how quickly it is fixing

of New Urban Mechanics, an initiative that began in

potholes,” he says. “Now, by combining data, we can see

Boston and is now shared with the City of Philadelphia

what areas of the city aren’t getting phone calls, which

and serves as each city’s innovation incubator. The

may indicate problems no one knows about yet.”

office builds partnerships between city agencies, outside

make city government
more proactive—and
more effective.”

institutions and entrepreneurs to pilot projects in the two
Boston has put significant effort into making data and

cities that address resident and business needs.5 Several

INFORMATION OFFICER, CITY

analytics available to both agencies and the community.

projects have involved data sharing and analytics, such

OF BOSTON

Oates points to the Boston Area Research Initiative4 as

as the Street Bump initiative.

—BILL OATES, CHIEF

an example. Here, the city confers with the many
universities in the area about original urban research on

“Government agencies on the whole aren’t great in

the cutting edge of social science and public policy. For

responding to unsolicited ideas and opportunities, and

us, “this is a matter of digging a little deeper,” Oates says.

they are engineered to put tightly prescribed solutions out

“We met with interested researchers, technologists and

to bid,” Oates says. But “we have a model that allows

community members to figure out how we could use data

us to respond quickly to opportunity.” The city is now

to improve quality of life issues. Being able to connect

collaborating with the Commonwealth of Massachusetts

newly available city data with some of the real big data

to deliver a Citizens Connect-like mobile app that will

out there in the world can make city government more

engage citizens and produce important performance data.

proactive—and more effective.”
Boston officials are also talking with cities around the

3. Bertolucci, Jeff. “Smartphones,
Big Data Help Fix Boston’s Potholes.”
InformationWeek, July 25, 2012.
http://tinyurl.com/a9nfkdp
4. Boston Area Research Initiative.
http://tinyurl.com/kgu2q46
5. New Urban Mechanics: a city
movement focused on civic innovation.
http://tinyurl.com/a3jodpv

Planning for Tomorrow

world about similar initiatives. “All of us in city govern-

Oates contends that what has been accomplished so far

ment are looking at ways to our data move valuable,”

is just the beginning. By using information to interact better

Oates says, “and to be part of these exciting cross-ju-

with neighborhood leaders and citizens, for example, the

risdictional initiatives.”•

city can respond faster and better to local events, enabling
it to more efficiently deploy police to ensure public safety.
“Our ability to engage in those conversations is a critical
part of successfully using technology,” he says.

2

Bloomberg Businessweek Research Services

Joe Mullich is a freelance business and technology
writer based in Sherman Oaks, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

City of Cape Town, South Africa at a glance
Second largest city in South Africa, whose government
was forged in 2000 by a consolidation of seven
municipalities into one “unicity”
Industry: public sector
Population: 3.7 million
Size: 950 square miles
City employees: 25,500
Number of police stations: 60
Number of fire stations: 29
www.capetown.gov.za
Source: City of Cape Town

Page

25

RESEARCH UPDATE | Real-Time Enterprise Case Studies

Real-Time Data Speeds Services in
“The Mother City” of Cape Town
With in-memory computing and analytics tools, Cape Town is improving public safety and
energy/water management at the same time.
BY JOE MULLICH

C

ape Town, the second largest city in South Africa, has long been called “The Mother City.”
Andre Stelzner, chief information officer for Cape Town, provides a tongue-in-cheek explanation

for the nickname: “People say that’s because everything here takes nine months” to accomplish.
Jokes aside about the slow pace of government, Cape

Cape Town at a
Glance
} Population: 3.7 million
} Size: 950 square miles
} City employees: 25,500
} Number of police stations:
60
} Number of fire stations:
29

Town realized that many pressing issues—such as
improving public safety and managing water and energy
use more effectively—required faster action than is
typical of large bureaucracies. Research by the city’s IT
team indicated that success could only be achieved by
collecting and analyzing real-time data.
Cape Town’s government, which was forged in 2000 by a
consolidation of seven municipalities into a single “unicity,”

www.capetown.gov.za/

delivers all the services that are used by its population

Source: City of Cape Town

of 3.7 million. This includes electricity, water, healthcare,
sanitation, transportation, refuse collection, libraries, and
police and fire protection, to name a few.
In 2003, the city started down a path toward better
use of information by implementing an enterprise

FIGURE 1

Tech Hit Parade

Respondents were asked: Currently, how important are each
of the following capabilities to your agency, institution or
organization now and in two years? (percent of respondents
indicating “important”)

Currently Important

Important in Two Years

Share data and analytics across organization

85%

89%

Provide field staff with data from internal systems on
apps


84%
87%
Offer constituents access to operational systems

83%
85%
Ability to understand stakeholder sentiment via social
media analysis

72%
81%

resource planning (ERP) system. It is now one of the
largest ERP deployments in any city government in the
world, encapsulating 450 business processes. Tangible
benefits include providing insight for reducing debt and
enabling Cape Town to achieve an A+ credit rating. The
need for faster response times has led the city to big
data analytics and in-memory computing, which can
analyze huge amounts of data quickly.

Ability to correlate location and other asset data

73%
77%
Communicate with stakeholders via social media

73%
74%
Real-time sensor feeds from assets

61%
71%
Base: 103 executives at small, midsize and large public agencies worldwide
Source: Bloomberg Businessweek Research Services 2013 Agency Analytics Study

It Starts with Smart Metering
Cape Town’s initial foray into in-memory computing

For example, “If we have real-time information about

will most likely come from the need to analyze large

the supply and demand for water and power, we

quantities of data gathered by smart meters that

can keep them in sync with dynamic tariffs,” Stelzner

monitor water and energy use. Currently, the system is

says. By raising tariffs in times of rising demand, the

limited to large corporate users, but over the next two

city can encourage conservation and reduce the risk

years it will expand significantly and result in a host of

of unstable power supplies that can lead to national

new services.

blackouts. “We need to find ways to get people to

DECEMBER 2013 | © Copyright 2013. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

change their behavior about the amount of water and
electricity they use,” he says.

Cape Town’s Challenges
} Improve water/energy conservation

Real-time access to water and energy data will provide
other benefits, as well. “We will be able to pick up a leak
in a main water line immediately,” Stelzner says. “In the
past, it could take us days to identify a leak in a remote
area, which resulted in a significant amount of spillage.”

} Provide better waste management to over one
million households
} Increase citizen safety and provide “intelligent
policing”

Cape Town’s IT Solutions

Cape Town’s
Government
Milestones

For waste management, trash containers will be

} Equip trash containers with RFID tags

equipped with RFID tags so the citizens can be charged

} Consolidate emergency services/data into a

} Fiscal management

for garbage collection based on the weight of their refuse.

} Implement real-time smart metering

“At the moment, everyone pays the same, so the costs

and A+ credit rating

are not divided equitably and there is no incentive for

} Use of big data

single platform
} Implement big data analytics and in-memory
computing

people to behave more efficiently,” Stelzner points out.

analysis to conserve
water and energy

Consolidating Emergency Information

are many of the types of activities already underway in

to optimize waste

Stelzner sees what may be an even bigger payoff by

Cape Town, including sharing data and analytics across

management

applying in-memory computing to emergency services.

the organization and correlating location with other data

At present, the city’s emergency services—from law

assets (see Figure 1, “Tech Hit Parade”).

} Use of RFID tags

} Near-real-time
response to public-

enforcement to disaster management—tend to operate

safety events

in silos. As a result, information from one department that

In Cape Town, the use of in-memory computing is being

could potentially be used by another is not shared. To

expanded to also enable more “intelligent policing,”

solve the problem, the city is developing an emergency

meaning the city can use more data sources to respond

control platform that will consolidate data sets, leveraging

more clinically to security events. “In some areas, security

the power of in-memory computing across agencies.

issues are a perception,” Stelzner says, “and in some
cases, they are a reality.” If by using real-time sensors

As an example, the city currently collects information

and other sources “we have the ability to get a better

on 1.5 million non-emergency events a year. “There

understanding of the true situation, then we’ll be able to

is a lot of information that is not now visible to the

apply resources more effectively,” he says.

emergency controller, even though this information is
interrelated to the work they do,” Stelzner says. He

As an example of future public safety benefits, Stelzner

goes on to explain: “A traffic probe that shows highway

uses a fireman and a burning building. The fire captain

traffic has slowed to almost zero speed could inform

back at headquarters will be able to pull up the

you of another event, like a major accident before the

building plan from the land-use management system,

accident is reported. By consolidating this information

instantly locate potentially dangerous gas cylinders in

on a single platform, we can be more proactive and not

the structure, note how to avoid them and then alert

depend entirely on the community to report events.”

the fireman on his handheld device as he enters the
building. “That is the future we envision,” Stelzner says.

The idea of sharing access to real-time public data and

“It’s a future that depends on enormous and rapid

analytics across public agencies is not unique to Cape

computing power—because you can’t wait for a batch

Town. In fact, some 81 percent of managers among

job to run when a building is on fire.”•

government entities around the world responding to
a 2013 global survey by Bloomberg Businessweek
Research Services strongly agree that big data is crucial
to meeting their mission. High on their list of requirements

2

Bloomberg Businessweek Research Services

Joe Mullich is a freelance business and technology
writer based in Sherman Oaks, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Commonwealth Bank of Australia at a Glance
Australia’s leading provider of integrated financial
services
Industry: banking
2012 revenue: $47.2 billion
Profits: $7.09 billion
Number of employees: 51,000
Markets: Australia, New Zealand, China, Vietnam and
Indonesia, with branches in New York, Tokyo and
Hong Kong
www.commbank.com.au
Source: Commonwealth Bank of Australia

Page

28

RESEARCH UPDATE | Real-Time Banking Case Studies

CBA Offers More Personalized Banking
Through Big Data and Analytics
With new data sources and tools, Commonwealth Bank of Australia is providing more personalized
service to customers and building loyalty within the community.
BY TOM GROENFELDT

C

ommonwealth Bank of Australia (CBA) knows a lot about its customers. That is partly because
it has a huge footprint in the country—it processes nine million transactions per day, handles 40

percent of the card transactions in Australia and maintains 12 million account profiles. More important
than company size or number of transactions is how CBA uses its wealth of customer data, along with

Commonwealth
Bank of Australia
at a Glance
} Description: Australia’s
leading provider of
integrated financial
services
} 2012 Revenue: $47.2
billion

real-time analytics, to build loyalty and provide superior
customer service.
Like CBA, “Most banks have incredibly rich data sets,
especially those derived from payments and credit data,”
notes Andy Lark, CBA’s outgoing chief marketing officer.
Far fewer have learned how to combine this “big data”
with other information resources and then put it to work to
create better products and services.

} Profits: $7.09 billion
} Number of Employees:
51,000
} Markets: Australia, New
Zealand, China, Vietnam
and Indonesia, with
branches in New York,
Tokyo and Hong Kong

What has put CBA out front in this area is a recent

Key Features of CBA’s New Web Site
} Magazine-style section provides content based
on customers’ key life events
} Integrates data from social interactions, on-site
behaviors and browsing history
} Support forum where customers seek support
and advice about the bank’s products and
services
} Uses principles of responsive Web design to look
good on all devices, including PCs, smartphones
and tablets

modernization of its IT systems, followed by strategic
investments in social media, analytics and mobility. All of

that prospect has been looking at properties, the site is able

this has unified the bank’s data foundation and “put us

to display more relevant offers—home loan, insurance and

in an enviable position,” Lark says. Thanks in part to big

other related product information. The site can even analyze

data and real-time analytics, CBA has reduced check

a customer’s Web searches to provide a very specific offer

fraud by 50 percent and Internet fraud by 80 percent.

on the spot, in real time.

www.commbank.com.au

Equally important, he says, is how analytics now “gives our

Source: Commonwealth Bank
of Australia

customer service the advantage of clarity of purpose.”

The CBA site is a good example of how customers want
to communicate with banks on their terms, when and

All banks strive to provide superior customer service.

where they are ready. According to Andrew Hagger,

CBA made real progress once it realized customers

general manager—head transformation and analytics at

want individualized attention. “I guess one of the largest

CBA, “Analytics underpins the ability to offer the right

surprises to us was the extent to which customers wanted

products to clients.”1

the site personalized to them,” Lark says of the bank’s
Web service, NetBank. “So the strategy became making

More Than a Smarter Web Site

the entire site relevant and meaningful for the customers.”

But CBA’s focus on customer service extends well beyond
the Web. The more accounts a customer has with the

1. Wisniewski, Mary. “5 Takeaways from
SAP’s Client Conference: Reporter’s
Notebook.” American Banker, October 25,
2012. http://goo.gl/noH0qI

Visitors can see the difference. For example, say a prospect

bank, the more helpful CBA can be with pricing and

has been viewing properties online and then visits the CBA

advice. If a household has its mortgage, checking, savings

site. Not too long ago, “you might have gotten a banner with

and credit cards with CBA, the bank’s analytical tools can

a standard offer for a travel money card—something far from

suggest the most appropriate products and offer pricing to

interesting at that point in time,” Lark says. Today, knowing

fit the customer’s needs, both in person and online. CBA

SEPTEMBER 2013 | © Copyright 2013. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

can even offer them a report on their spending through a
visual and interactive hub site called Signals.2
To be customer centric, it is important to provide access
to data across the enterprise to individual users at the
point of decision-making, in addition to having clean
data and an integrated analytics platform that enables
collaboration across the various departments and
processes. CBA’s IT infrastructure demonstrates this well.
“We have the strength of the relationship data and the
customer-centric architecture, which I believe will set us

CBA’s Products and Services
} Retail Banking: Home loans, credit cards,
personal loans, transaction accounts, and
demand and term deposits
} Commercial Banking: Business loans,
equipment and trade finance, and rural and
agribusiness products
} Corporate Financial Markets Services:
Securities underwriting, trading and distribution,
corporate finance, equities, payments and
transaction services, investment management
and custody services

apart from the competition on an enduring basis,” says
CBA CIO Michael Harte.3 CBA has also been working on
incorporating innovations such as in-memory computing
to power up its strategy.

that, together with analytics, runs well and looks good on
desktop, tablet and smartphone devices.

Harte says the bank has developed a strategy to collect
transaction and other data, analyze it and use it to determine

Conclusion

the right pricing and financial strategies for an individual or

As CBA demonstrates, the future is bright for banks that

an entire household. As Lark puts it, “The more information

learn to use big data and analytics to gain a competitive

you have, the more inclined you will be to make better

edge. However, dealing with all that data is not always

informed financial decisions.” The ability to forecast trends,

easy and progress can take time, says David Tanis,

model options and predict outcomes is another important

manager of information systems and frontline analytics at

aspect of gaining customer trust and loyalty.

CBA. At the Gartner Business Intelligence & Information
Management Summit 2013 in Sydney in February, Tanis

Increasingly, more customer and prospect data is coming

said every analytics project is a learning experience,

from sources outside the bank. An early and active user of

especially when it involves big data.4

social media, CBA has dedicated social media teams who
monitor social sites 24 hours a day looking for prospects

“We’re still trying to understand what the capabilities and

who might be dissatisfied with another bank and seeking

skills are in terms of pulling as much out of the big data

a new financial services home. The teams also look for

as we can,” Tanis says. CBA deals with the wide varierty

potential problems within CBA and respond to them

of big data sources every day as it tries to derive business

quickly. “I was surprised at how much benefit we could get

intelligence from that data.

from social data,” Lark says.
According to Lark, many institutions are still in the early

2. Langlois, Christophe. “BIG DATA: Top
Australian Banks Launch Social Media
Spending Comparison Sites.” Visible
Banking, March 7, 2013.
http://goo.gl/0MEoxE
3. “We’re changing the game:
CommBank.” The Sydney Morning Herald,
May 29, 2012. http://goo.gl/zEq8w
4. Lui, Spandas. “Half of analytics
investments will be a waste:
Commonwealth Bank.” ZDNet, February
25, 2013. http://goo.gl/h385jv

Skyrocketing use of smartphones and other mobile

stages “of being able to fully utilize their data” to develop

devices is also quickly filling the bank’s data coffers. CBA

insights and better meet customer needs. “It’s not just the

saw its mobile users jump from 19 percent to 32 percent

new data sets, or the size of the data, that is driving this,”

in less than a year. “Mobile is going to be even more

he says. “It’s also the awareness that in the future, you’ll

significant in the future, as more and more happens on

need to meet the customer before they start the search.

the smartphone,” Lark predicts. “Being relevant isn’t just

That’s where the winners will win.” •

going to be about the relevant offer; it also means being
contextually relevant to where I am and what I am doing.”
CBA uses a combination of ad serving, smart media
buying and personalization engines on its mobile Web site

2

Bloomberg Businessweek Research Services

Tom Groenfeldt is a freelance writer in based in
Sturgeon Bay, Wis., who has written for many financial,
business and technology publications.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

ConAgra at a glance
Consumer products giant produces brand-name foods
such as Healthy Choice, Marie Callender’s and Orville
Redenbacher’s, among others
Industry: consumer products
Category leaders: 27 of its consumer brands are
No. 1 or No. 2 in their category; 23 consumer brands
generate more than $100 million in retail sales
each year
Founded: 1919
Headquarters: Omaha, Nebraska
Sales: $18 billion
Employees: 36,000
www.conagra.com
Source: ConAgra

Page

31

RESEARCH UPDATE | Real-Time Business Case Studies

Real-Time Business Leads
ConAgra to Profitable Insights
The consumer products giant is reducing costs, improving pricing and forging closer
relationships with retailers using in-memory computing.
BY JOE MULLICH

ConAgra at a
Glance
Segments: Consumer
foods, private brands,
commercial foods
Category leaders: 27 of
its consumer brands are
No. 1 or No. 2 in their
category; 23 consumer
brands generate more
than $100 million in retail
sales each year
Founded: 1919
Headquarters:
Omaha, Neb.
Sales: $18 billion
Employees: 36,000
www.conagra.com
Source: ConAgra

C

onAgra, the $18 billion consumer products (CP) giant, produces brand-name
foods such as Healthy Choice, Marie Callender’s and Orville Redenbacher’s,

among others, that can be found in almost everyone’s refrigerator or pantry. Yet it

faces the same challenges that pressure the entire
food industry: figuring out the optimal pricing for its
products in an environment where consumers are
hyper-sensitive, while coping with the everfluctuating costs for 4,000 raw materials used in

FIGURE 1

How Analytics Contributes to
Business Decisions

Areas where food and beverage companies use data and
analytics to support strategic decisions (percent responding)

some 20,000 products.

Customer insights


According to a 2013 study by KPMG,1 51 percent of

Brand and product management
58%

59%

food industry executives said pricing pressures
remain the highest barrier to growth, up from 42
percent a year earlier. Volatile commodity prices—
the amount manufacturers pay for ingredients—are
another major obstacle.
“If the price of beef goes up on the commodity

Pricing decisions

56%
Operating model optimization
52%
Market expansion
43%

exchange, what is that going to do to our margin?”
asked Mindy Simon, ConAgra’s vice president of IT.
Being able to answer such questions is of
paramount interest to the company, because
commodity prices affect its earnings and its stock

Portfolio rationalization


42%

Source: KPMG 2013 Food and Beverage Industry Outlook Survey.
http://goo.gl/me3va8

price. In the past, ConAgra has warned that

ConAgra decision-makers have real-time insight into

earnings would be impacted by materials prices that

the company’s costs and consumers’ demands.

were rising faster than expected.2
“We’ve developed much better capabilities in pricing

1. KPMG. 2013 Food and
Beverage Industry Outlook Survey.
PDF. http://goo.gl/me3va8.
2. Rappeport, Alan. “ConAgra hit
by surging raw material costs.”
Financial Times. Sept. 20, 2011.
http://goo.gl/yih35b.
3. Thompson Reuters Streetevents.
“ConAgra Foods at CAGNY
Conference. ” Edited transcript.
Feb. 18, 2014.
http://goo.gl/QGrc9a.

March 2014 |

So ConAgra puts great emphasis on optimizing its

analytics as part of an overall revenue growth

prices, which in turn requires getting ever better

management approach,” ConAgra CEO Gary

prices for commodities such as wheat, corn, oats,

Rodkin told analysts in February 2014.3 Rodkin’s

soybean meal, soybean oil, meat, dairy products and

remarks echoed the KPMG survey findings: Food

sugar. The company turned to in-memory computing,

and beverage executives reported they rely more on

which loads extremely large volumes of data from

data and analytics to support their pricing decisions,

multiple sources into one database and enables

understand customers better, and support brand

users to answer questions almost instantly. Access to

and product management decisions (see Figure 1,

great volumes of rapidly processed data means

“How Analytics Contributes to Business Decisions”).

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

ConAgra’s
Challenges

Real-Time Data Means Faster Decisions
ConAgra has priced products appropriately when it

} Gain in-the-moment
insight into the cost of
raw materials.
} Acquire more accurate
consumer purchase
information to improve
merchandizing.
} Forge closer ties with
retailers.

FIGURE 2

Consumer Products Companies’
Data Challenges

delivers value to consumers and earns a profit. For

They want timelier information. (percent responding)

example, the company has 140 meal products, such as

Timeliness for decision-making
69%

potpies, that sell for less than $3. “Banquet potpies sell
for less than $1, and Marie Callender’s potpies are
around $2.50,” Rodkin explained.4 Having a variety of
products at different price points makes ConAgra
competitive within the categories it serves, as does
doing a better job of getting retail prices right than its

ConAgra’s
Solutions

competitors. Any price increases prompted by rising

} Implemented in-memory
technology to speed
analysis.
} Gathered new sources
of data about consumer
behavior.
} Shared data-driven
insights with retailers.

consumer expectations, observed Bob Nolan,

manufacturing costs have to take into account
ConAgra’s vice president of customer insights and

Quality
67%
Integration
57%
Availability


53%

Source: Accenture, “Building an Analytics Driven Organization,” 2013.
http://goo.gl/KBfJnv

analytics. Consumers might be willing to pay 10 percent
more for a gallon of gas, he said, but not for popcorn.5

Improving their ability to model alternative business
scenarios is becoming a critical goal for CP

CP companies have traditionally approached key

companies that want to stay ahead. A recent

business decisions, such as pricing, through a

Aberdeen Group study10 looked at how behavior

periodic planning process. However, as the cost of

differs among companies that are aware of the

manufacturing and consumer demand become more

business drivers, such as costs or pricing, that

volatile, so do revenues. Business risks also

impact their performance compared to those who

increase. Companies now realize that planning

are not aware. The results found companies that

should be a continuous activity based on real-time

take business drivers into account when creating

information. Yet the majority of CP companies are

their business plans are nearly three times as likely

failing, thus far, to put real-time analytics at the heart

to make what-if analyses a priority.

of their decision-making processes, according to a

4. Thompson Reuters
Streetevents.
5. Nolan, Bob. “ConAgra’s VP of
Analytics on Big Data & Careers in
Retail.” Video. Jan. 9, 2014.
http://goo.gl/PS1ozI.
6. Accenture. “Building an
Analytics-driven Organization:
Organizing, Governing, Sourcing
and Growing Analytics Capabilities
in CPG.” PDF. Feb. 19, 2014.
http://goo.gl/KBfJnv.
7. Henschen, Doug. “Can SAP
Master Cloud & On-Premises?”
InformationWeek. Feb. 5, 2014.
http://goo.gl/G1yJoA.
8. SAP. “SAP HANA: An InMemory Data Platform for RealTime Business.” PDF. 2012.
http://goo.gl/gDicpN.
9. Doug Henschen.
10. Castellina, Nick. “Don’t Fly
Blind When Budgeting and
Forecasting: The Value of Being
Driver-Conscious.” Aberdeen PDF.
November 2014.
http://goo.gl/7VWSGj.
11. Bob Nolan.
12. Accenture.

new Accenture study.6 The top challenge for CP

By focusing on a key pain point—costs—ConAgra

companies, cited by 69 percent, is lack of timely

has convincingly demonstrated the business value of

data (see Figure 2, “Consumer Products Companies’

its in-memory computing investment, observed Chris

Data Challenges”).

Cicarello, senior director, pricing and customer
analytics at ConAgra.11 Choosing an important

To gather more timely data and enable faster

business problem to address, as ConAgra did, is a

decision-making, ConAgra turned to in-memory

savvy strategy for CP companies that are engaging in

computing in numerous areas of its business. The

cutting-edge analytics. According to Accenture,

“most revolutionary” use now is forecasting materials

companies often launch such efforts without knowing

costs, Simon offered.

what they want to accomplish, and they end up

7

spending a lot of time—and money on technology—
ConAgra has been able to speed up the collection of

without having much impact on the business.12

its data related to commodities purchases from 9 hours
to 20 minutes8 and to reduce its month-end forecasting

Capitalizing on New Data Sources

process by three days. By collecting and analyzing the

Another reason why ConAgra needs to process

data more quickly, the company is able to consider

massive amounts of data quickly: the company

timelier what-if scenarios, giving it more ways to adjust

uses more types of data in its analysis. For

its strategies for buying materials, observed Simon

example, the CP giant is adding shopper-specific

(see Figure 3, “Better Decisions Through Data”).

data that it gets directly from retailers and

9

2

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

analyzing that data in new ways to better
understand consumers and respond to their
needs. That goes beyond how ConAgra uses
internal data to forecast demand and increase
sales, and speaks to how it applies aggregated
retail data to plan promotions and strengthen its

The Benefits of
Real-Time
Business at
ConAgra

include the following. (% responding)

Improving the quality of decision-making


supply chains.

Making quicker decisions


As ConAgra searches these new data stores, it is

Improving planning and forecasting


finding surprising insights that enable better

} Expanded options:
ConAgra is able to
analyze multiple “what-if”
scenarios when
considering its strategies
for purchasing
commodities.
} Better merchandizing:
Using external data,
such as consumer data
provided by retailers,
delivers real-time insight
into how to merchandize
products more effectively
and increase margins.
} Closer relationships
with retailers: Sharing
data-driven
recommendations with
retailers helps ConAgra
build trust and become
an indispensible partner.

FIGURE 3 Better Decisions Through Data
Business drivers for investment in analytics


product merchandizing. For example, the
company learned that people who buy one type
of single-serving frozen food tend to buy several
other single-serving varieties at the same time.

59%

53%

47%

Developing new products, services and
revenue streams

47%
Source: IDG Enterprise Big Data Study, 2014. http://goo.gl/BNImWX

Because of that, ConAgra suggested that retailers
group the packages with smaller portions

Enhancing Relationships

together, instead of stocking single-serve pizzas

To develop a strong relationship with retailers,

with family-size pizzas.

ConAgra realized that it could not simply provide
self-serving data about its own products. Nolan

Such findings enable ConAgra to forge stronger

pointed out that data sharing requires

ties with retailers: The company is giving the

transparency: Retailers should fully understand

retailers data that, in turn, enables them to improve

why ConAgra is making recommendations about

their own operations. The deeper understanding

which products to put on the shelf. In some cases,

about prices ConAgra gains not only helps the

the company’s recommendations might even

company manage itself efficiently, it also helps

include adding a competitor’s products. “We try to

ConAgra guide retailers on how to price products

be objective and give recommendations that allow

on the shelf. That, along with controlling costs, is

[retailers] to grow their entire store, not just our

the other crucial element in maximizing profits,

business,” he said. “It’s almost like being a

according to ConAgra executives.

consultant. We want to become the indispensable

13

partner to our customers.”14
Aberdeen Group Analyst Nick Castellina said
best-in-class companies—the ones that shape

Nolan said this objectivity demonstrates to

their plans around business drivers—are twice as

supermarkets and retailers that ConAgra’s data-

likely to share information with suppliers,

driven suggestions are based on what will most

customers, resellers and regulatory bodies. But the

benefit the retailers’ bottom lines. This tactic builds

data has to be accurate and recent, or it is not

trust as ConAgra develops relationships with the

useful. The high-performing companies that

retailers. As a result, he thinks ConAgra will profit and

Aberdeen identified as sharing information are

“win the ties” when retailers debate whether to add

nearly three times more likely to have real-time

ConAgra products or those from another company.15

financial metrics.
It is another innovative way that data drives
“Having accurate demand forecasting and
inventory is important in consumer goods,”
Castellina said. “This is especially important in
the food industry because of shelf life and the

13. Bob Nolan.
14. Bob Nolan.
15. Bob Nolan.

capability for materials to go bad.”

3

Bloomberg Businessweek Research Services

ConAgra’s sales and boosts the bottom line. •
Joe Mullich is a freelance business and technology
writer based in Sherman Oakes, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

eBay at a glance
Leading online retailer provides consumer-toconsumer sales services via the Internet
Industry: high tech
Founded: 1995
Headquarters: San Jose, California
Brands: eBay, PayPal, eBay Enterprises, StubHub
Buyers worldwide: 145 million
Active users worldwide: 128 million
Number of items listed for sale: 650+ million
2013 revenue: $16.0 billion
www.ebay.com
Source: eBay

Page

35

RESEARCH UPDATE | Real-Time Business Case Studies

Big Benefits from Big Data at eBay
Online marketplace provider eBay uses predictive analytics and in-memory computing to better
serve customers and bolster the bottom line.
B Y L A R RY L A N G E

O
eBay at a Glance
} Founded: 1995
} Headquarters: San Jose,
Calif.
} Brands: eBay, PayPal,
eBay Enterprises,
StubHub
} Buyers worldwide: 145
million
} Active users worldwide:
128 million
} Number of items listed for
sale: 650+ million
} Revenue (fiscal 2013):
$16.0 billion

nline retailers face two big challenges: improving customer service, and keeping
partners and suppliers satisfied. Both are vital, because online competition is fierce. If

shoppers aren’t happy with their site experience—from browsing to buying—they can easily
go elsewhere; competitors are just a click away. It’s
the same for an online retailer’s suppliers. If they

FIGURE 1

Predictive Analytics:
What Is It Good For?

don’t like certain terms and conditions, or consider

(percentage of survey respondents)

technical features too basic, they won’t stay loyal.

Achieve competitive advantage


68%

The stakes for online retailers are huge. Worldwide
B2C ecommerce sales will increase more than 20
percent this year, reaching $1.5 trillion, predicts
research firm eMarketer.

1

New revenue opportunities


55%

Increased profitability
52%

Leading online retailer eBay is meeting both

www.ebay.com

challenges by deploying business analytics to provide

Source: eBay

online sellers with real-time information about their
eBay-enabled sales. Sellers can use this information
to sell more goods more efficiently and effectively.

Increased customer service
45%
Operational efficiencies
44%

Because eBay is better serving its sellers, it is able to
indirectly better satisfy buyers with a speedier,
optimized shopping experience. As for eBay’s bottom

Source: Ventana Research predictive analytics benchmark research, 2012.
http://goo.gl/k5lkGk

line? It gets a cut of every sale, regardless of which

and services that empower customers to perform a variety

customer is buying or selling. Simply put, the new

of business tasks (see Figure 1, “Predictive Analytics: What

analytics program is a win-win-win.

Is It Good For?”).

Analyzing Analytics

Many organizations use predictive analytics (see Figure

The move is significant for another reason:

2, “Predictive Analytics: What It Is Used For”). Netflix

Although many ecommerce companies find the

commissioned two TV shows, “Orange Is the New

promise of big data compelling, few have realized

Black” and “House of Cards,” knowing beforehand,

its business benefits. Now, though, early adopters

thanks to predictive analytics, that a big chunk of its

like eBay are achieving new revenue streams,

customer base would loyally watch them.2

greater speed-to-market and enhanced business

1. eMarketer. “Global B2C Ecommerce
Sales to Hit $1.5 Trillion This Year Driven
by Growth in Emerging Markets.” Feb. 3.
2014. http://goo.gl/K8l0Vt.
2. Carr, David. “Giving Viewers What
They Want.” The New York Times, Feb.
24, 2013. http://goo.gl/Tr4wAw.

flexibility. Among the approaches yielding results,

A mining company uses predictive analytics to better

predictive analytics stands out.

maintain equipment. The company, as described by Henry
Morris, senior vice president of software and services

Predictive analytics helps companies extract

research at market researcher IDC, deploys Caterpillar

information from mountains of data, forecast customer

machinery that, in the past, was manually checked and

trends and patterns of behavior, and create products

maintained only on an infrequent and irregular basis.

AUGUST 2014 | © Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

Now equipment is continuously monitored. “The

FIGURE 2

company can detect a ‘signal,’ or datapoint anomaly, on
a machine that predicts when the machine is likely to fail,”
Morris explains. “Then they can send someone out to
repair it.”
Speed is an important benefit of predictive analytics. A

Benefits of
In-Memory
Computing at eBay

new, faster technology, known as in-memory computing,

} Sellers get relevant,
real-time information
about their own
customers and eBay
buyers
} More in-depth data
analysis; faster
anomaly detection and
notification
} Dashboard lets
analysts visualize
relevant information in
several categories
} Tasks that previously
took a month can now
be done in one day
} Data is delivered
to the entire team
of eBay analysts
instantaneously

“In-Memory vs. Disk: The Shootout”). In-memory

keeps data in a computer system’s RAM rather than
storing it on traditional physical disks (see Figure 3,

Predictive Analytics:
What It Is Used For

(percentage of survey respondents)
Currently using


24%


22%

45%
34%

Product offers
43%

consultancy PricewaterhouseCoopers (PwC), says
improved productivity, enhanced customer experience
and loyalty, and lower costs.”3

67%

Customer service

and analyze vast amounts of data from multiple data

in-memory computing can deliver “increased innovation,

72%

Marketing

computing helps predictive analytics systems aggregate
sources in nearly real time. Anand Rao, a principal at

Plan to add in future

Forecasting

22%

Fraud detection
34%
31%

Many enterprise software providers offer automated
platforms based on in-memory computing. These

Source: Ventana Research predictive analytics benchmark research, 2013.
http://goo.gl/1kUhOz

systems run data through myriad preconfigured
metrics, quickly send those metrics to users and

To stay competitive, eBay employs 5,000 data analysts

provide dashboards for users to disseminate data.

worldwide who sift through as much as 100 petabytes of

Researchers at audit and consulting firm Deloitte say

data. Until recently, analysts used Microsoft Excel

new in-memory platforms offer query response times

spreadsheets. But the process wasn’t scalable, and

that are thousands of times faster than more

errors were common.6 Given the huge amount of data

conventional approaches; transactions can be

and eBay’s pressing business needs, the case for

processed as much as 20,000 times faster.

automation was easily made.

These and other related benefits are making predictive

eBay’s first test project, launched in 2013, combined

analytics a serious business. Research firm

predictive analytics and in-memory computing. The

MarketsandMarkets forecasts the global market for

result empowered the North American marketplace

predictive analytics systems reaching $5.24 billion in

team of 300 data analysts to provide sellers with

2018, up from $1.7 billion last year.

forecasts, as well as relevant and real-time information

4

5

about sellers’ own customers or eBay buyers.
3. PricewaterhouseCoopers. “6th Annual
Digital IQ Survey.” http://goo.gl/1dQiyn.
Comments by Anand Rao in “Digital IQ
2014 10 Technology Trends for Business.”
http://goo.gl/IpJsLw.
4. Deloitte University Press. “Tech Trends
2014: Inspiring Disruption.”
http://goo.gl/E3f6z3.
5. MarketsandMarkets. “Predictive
Analytics Worldwide Forecasts
(2013–2018).” http://goo.gl/4fEhBg.
6. SAP. “Optimizing eBay’s Signal
Detection with SAP HANA.”
http://goo.gl/UFHy7j.
7. Schwarzbach, David. “SAP
Sapphire Conference Presentation:
Target Business-Critical Processes for
Transformation.” http://goo.gl/uIv6Zu.

Up, Up and eBay

Information was provided as actionable metrics,

eBay recognizes the value of predictive analytics and

including customer tastes and preferences, market

in-memory computing. It uses the technology to score

conditions, and timely supply and demand information.

both business and technology benefits.
Consider the popular category of collectible men’s

2

Data at eBay is certainly big: It serves some 20 million

basketball sneakers. “If we know that ‘collectible

sellers offering wares in more than 4,500 product

sneakers for the Olympics’ are selling really well, we

categories and 145 million active buyers in 100+

want to tell our sellers as soon as we know it,” says

countries. Now eBay is feeling pressure to keep

David Schwarzbach, vice president and CFO of eBay

business competitive and customers loyal.

North America. “That’s the value of speed.”7 The

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

sellers, equipped with this
knowledge, can then run special

FIGURE 3


promotions for those sneakers.

Keys to the Kingdom
The eBay team had worked alone on a

In-Memory vs. Disk: The Shootout
How these two technologies compare on two important factors.

Infrastructure

Finding Data

In-memory
computing

Data is stored in the
machine’s main system
memory, enabling
in-line processing and
manipulation.

Streamlined data retrieval
and processing means no
mechanical parts, no
movement and no need
for alignment.

Disk-based

Data is mechanically
recorded on a spinning
disk, often on a large
array of networked
storage appliances.

For data to be read or
written, the correct
address must first be
found on the physical
disk. Overhead for input/
output activities can
cause delays to jobs that
are large or complicated.

scalable and configurable automated

eBay’s Business
Challenges

predictive analytics system for two years.

} Data analysis was
manual; the process
wasn’t scalable, and
errors were common
} Difficult to coordinate
analyst’s efforts,
diagnose problems
and make accurate
decisions on seller
recommendations

Schwarzbach’s team began working

eBay’s Solutions

eBay honed in on two core requirements: greater

a method to deliver items before a customer orders

} Deploy advanced
business analytics
} Combine predictive
analytics and inmemory computing
} Partner with in-memory
platform vendor

analysis of data, and faster detection and notification of

them. In deciding what to ship, Amazon will leverage its

anomalies—or signal detection. The platform delivered

trove of customer data—and its predictive analytics

several tools, including a dashboard that lets eBay

system—to take into account a customer’s previous

North America’s analysts visualize relevant information in

orders, product searches, wish lists and more.10

But the payoff came when
with an in-memory platform vendor.
“There was a thrilling, magic moment,”
he says, when the team knew they
could transfer their data analysis
operation over to an in-memory platform.
Schwarzbach adds: “We’d cracked it.”
Source: Deloitte, “Tech Trends 2014: Inspiring Disruption”

By deploying the in-memory platform,

several categories and that flashes data anomaly alerts.
Similarly, UPS wants to deploy prescriptive analytics on
Thanks to in-memory computing, tasks that previously

all its data feeds, including GPS tracking, driver routes

took a month now take a day. Gagandeep Bawa, a

and workloads, traffic patterns and delays, and

manager in eBay North America’s financial planning

customer delivery requirements. The goal: a real-time,

group, says this real-time speed frees up data

constantly adapting operational system that optimizes

analysts’ time, and he calls the system “inherently

any task performed by the company’s drivers.11

intelligent and configurable.”8
PwC says the future of enterprise applications will
Next, eBay will offer this data directly to sellers, either

combine predictive analytics with mindflows—basically,

on their personalized Web pages or via a mobile app.

a person’s thoughts—to create “mindful apps.” These

Schwarzbach says his team is “taking this to

apps will combine data generated by tracking what

production right now.” Morris of IDC expects this will

people think, their behavior patterns and data already

give eBay a big competitive edge. “Other auction firms

being aggregated by a firm’s predictive analytics

don’t offer this kind of data analysis as a service,” he

program. That information will help employees make

explains. “So this makes eBay very compelling for

optimal decisions, all served up via a mobile app.12

9

8. Bawa, Gagandeep. “eBay’s Early
Signal Detection System Runs Machine
Learning & Predictive Powered by SAP
HANA.” http://goo.gl/282uJB.
9. David Schwarzbach.
10. Bensinger, Greg. “Amazon Wants to
Ship Your Package Before You Buy It.”
The Wall Street Journal, Jan. 17, 2014.
http://goo.gl/Vz1U9i.
11. Hemsoth, Nicole. “UPS Delivers on
Prescriptive Analytics.” Datanami, Feb.
23, 2013. http://goo.gl/PP4GjV. Schultz,
Beth. “Inside Analytics: UPS Delivers
the Goods.” All Analytics, May 9, 2013.
http://goo.gl/iEfm4U.
12. Baya, Vinod, Galen Gruman and Bo
Parker. “The future of enterprise apps:
Moving beyond workflows to mindflows.”
PricewaterhouseCoopers.
http://goo.gl/GqCOLH.

customers to use for selling their goods.”
If you were using one of these programs, you’d already

The Future Is Predictive
Impressive as these gains are, several companies are
pushing new developments that will make data
analytics even more useful. Amazon was recently
granted a patent for what it calls anticipatory shipping,

3

Bloomberg Businessweek Research Services

know that! •
Larry Lange is a freelance business and technology
writer based in Jacksonville, Fla.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

EMC at a glance
IT as a service, cloud computing. 25 distinct product
families span hardware, software and services,
addressing storage, trusted infrastructure, cloud
computing and big data
Industry: high tech
Headquarters: Hopkinton, Massachusetts
Founded: 1979
2013 revenues: $23.2 billion
Acquisitions to date: 70
Employees: 60,000 in 86 countries
www.emc.com
Source: EMC

Page

39

RESEARCH UPDATE | Real-Time Business Case Studies

The Key to EMC’s Technology
Growth: Integrated Acquisitions
Integrating the systems and business processes of acquired companies is often overlooked. EMC,
with its 70 acquisitions and counting, has a winning formula.
BY ALAN RADDING

T

he rise of so-called SMAC technologies—social, mobile, analytics and cloud—
presents a new challenge to large technology suppliers. On the one hand, these

companies must respond to their customers’ rising demands for these new technologies.

EMC at a Glance
Industry: IT as a service,
cloud computing
Company description: 25
distinct product families
span hardware, software
and services, addressing
storage, trusted
infrastructure, cloud
computing and big data
Headquarters:
Hopkinton, Mass.
Founded: 1979
Revenues:
$23.2 billion (2013)
Acquisitions to date: 70
Employees:
60,000 in 86 countries

Yet on the other hand, doing so is costly, time-consuming and complicated.
To meet this challenge, many large technology

FIGURE 1

companies are turning to mergers and acquisitions
(M&A). They are buying smaller suppliers that have
developed solutions in one of these areas, and

(% reporting deal objective was “very important” and
“completely achieved”)

then integrating them into their product mix and
operations. Among the firms that have spent
millions, even billions, of dollars to acquire SMAC
suppliers are IBM, Google, Microsoft and EMC.
Rob Fisher, U.S. technology industry deals leader at
PricewaterhouseCoopers (PwC), an audit, tax and
consulting firm, said these companies essentially
have no choice. SMAC, he said, changes “the
nature of the business, especially when software is

Acquisitions Do Not
Always Deliver

Very important
All respondents

Completely achieved
All respondents

Very important
Technology respondents

Completely achieved
Technology respondents

Access to new brands, technologies or products

56%
82%


40%



47%

www.emc.com

involved.” Acquisitions are also a way for large

Access to new markets


Source: EMC

technology suppliers to enter new markets at lower



risk. “Upstarts are prepared to lose hundreds of



millions of dollars of venture capital before becoming



profitable,” Fisher explained. “But established
players cannot absorb those kinds of losses.”
PwC recently completed a three-year study of
mergers and acquisitions in technology,
information, communications and entertainment.
As part of the study, the firm asked C-level

70%
75%
58%

38%

Access to management or technical talent

43%


59%

36%


31%

Source: PricewaterhouseCoopers, 2014 original rendering

executives to name their most important deal
objectives. Among executives in the technology

percent of the technology executives (see Figure 1,

sector, two goals came out on top: access to new

“Acquisitions Do Not Always Deliver”).

brands, technology and products, cited by more

MARCH 2014 |

than 80 percent of respondents; and access to

However, simply acquiring a smaller technology

new markets, also cited by 75 percent. The next

company is not a panacea. The acquired company

closest was access to talent, cited by nearly 60

must also be integrated into the larger company, and

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

that includes its IT architecture, systems and

FIGURE 2

survey identified IT integration as the number one
post-M&A closing difficulty. It was followed by the
related challenge of integrating operating
procedures and business processes.

EMC’s Challenges
} Support both current
and anticipated future
businesses.
} Manage a large number
(70+) of acquisitions,
and integrate business
and operational systems.
} Enable current products
with mobility and cloud
computing.
} Update legacy ERP
system to support
variable pricing,
especially pay-as-you-go
models.

This is essentially an information-platform challenge.
The acquiring company must meld disparate
processes and technologies, most originally
intended to support different business models,
customer bases, development cycles and product-

Transformation via Acquisition
(% of acquisition type, based on the largest
acquisition in the past three years)

applications. This work is far from simple. PwC’s

All respondents

Technology respondents

Transformational


Absorption



44%
53%

29%
29%

Source: PricewaterhouseCoopers, 2014

release expectations. And with cloud technology
enabling a software supplier to shift its business

Originally founded as a provider of data-storage

model from licensed products to hosted services,

systems to large enterprises, EMC is today a $23.2

even the most basic accounting systems may

billion (revenue) supplier of 25 distinct product families

require major adjustments.

that span hardware, software and services. These
products address not only storage, but also what the

As a result of this complexity and difficulty, many

company calls “trusted infrastructure,” cloud computing

acquisitions fall short of achieving their goals.

and big data.

PwC’s survey found that fewer than one-third of
executives at acquiring technologies companies

EMC’s customer base has expanded to now include both

reported competence in integration. The results

small and midsize companies. As a result, it engages both

were striking: Fewer than half (47 percent) of the

direct and in-direct sales channels. But its typical order

executives said their acquisitions actually

size has shrunk. In response, EMC embarked on a leaner

delivered access to new brands, technologies and

operating strategy, methodically cut costs and adopted a

products—goals the deals were created to deliver.

high-volume/low-touch business model, much like the

As for gaining access to new markets and new

best SMAC players. And at the manufacturing end, EMC

talent, the results were even worse; only 38

operations now rely on more than 50 suppliers worldwide,

percent said their acquisition met expectations for

up from a small handful in 2004, as well as several

new markets, while a mere 31 percent said it met

contract manufacturers.

expectations for talent. “Transformational deals
are much harder due to the increased complexity

Internally, EMC is a very different company, too. As of

of the integration,” said Gregg Nahass, U.S. M&A

2013, EMC had 60,000 internal users, more than twice

integration leader at PwC (see Figure 2,

the number it had in 2004. The company now has more

“Transformation via Acquisition”).

than 400,000 customers and partners, six times the
number it had when a previous ERP system was

The Integration Hurdle

deployed. Similarly, EMC’s roster of applications and tools

Integrating systems, therefore, is a key differentiator

has grown to 500, up from 400 in 2004. Even more

between acquisitions of SMAC companies that

important, the way the company handles its workload has

succeed at meeting their goals and those that fail.

changed dramatically; EMC now operates more than more

One company aware of this challenge, and working

than 10,000 virtualized systems, amounting to 93 percent

hard to master it, is EMC. Over the past decade,

of all its servers (see Figure 3, “EMC’s Evolving IT”).

EMC has acquired no fewer than 70 companies.

2

What is more, these acquisitions have enabled EMC

With all these changes, EMC found it also needed to

to radically change the nature of its business.

change its internal IT environment. The ERP system

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

that had suited the company so well in 2004 was

FIGURE 3

EMC’s Evolving IT

by 2013 no longer serving the business. EMC
now needed to accommodate dozens of business
units supporting varied product families being
sold via multiple channels to different types of
customers. A new system was clearly needed,

EMC’s Solutions

one that could support myriad types of pricing,
from conventional on-premises licenses to various

} Move to an open ERP
system.
} Create six new
principles for any future
system.
} Launch Project Propel,
an enterprise system
initiative designed to
transform 125+
business processes.
} Deploy a set of
virtualized enterprise
apps that can be
adapted to changing
future needs.
} Plan to add new
capabilities, including
CRM, scheduled for
2015 deployment.

subscription and pay-as-you-go models—and
whatever might come next. And the company
would need to help its staff work seamlessly. No
matter which EMC business units they were in,
workers needed to be able to share information,



2004

2013

Internal users 24,000

60,000

IT environment



5 datacenters,
~13 petabytes
of storage

5 datacenters,
960 terabytes
of storage

Business ~400 ~500
applications
Virtualization


2,000 physical 93%, ~10,000
servers
OS images

Source: EMC Corp.

collaborate and innovate with one another.
The EMC team began with a question inspired by one of

Beyond Integration

its acquisitions: What if the same principles that

Clearly, EMC needed a solution that went far

transformed a single acquisition, delivering

beyond merely upgrading its existing ERP system

unprecedented value for customers, were applied to the

with a few cloud or mobile capabilities. Instead, the

entire company?

company needed a system that would integrate its
acquired companies and support its new business

In answering that question, EMC officials realized they
would need to abandon their legacy ERP system. The

“Now that we’re in the hardware

replacement, they realized, would need to be based on

business, the software business,

open systems. It would need to enable widespread

and very much into mergers

virtualization. And it would need to support EMC’s
journey to cloud and mobile computing. Above all, EMC

and acquisitions, we needed

needed a system that could integrate everything and

to reinvent our ERP system to

share information, even with future acquisitions.

support not just the business

To find the right solution, EMC highlighted six key

that we had evolved into but the

principles:

businesses that we will continue
to evolve into going forward.”
—M I C H A E L H A R D I N G , P R O J E C T L E A D
T E C H N I C A L A R C H I T E C T, E M C

• Design for the future state of the business.
• Minimize customizations and commit to the vendor’s
upgrade path.
• Move fast to mitigate system risk.
• Use a phased approach to realize value as quickly
as possible.

processes, customer types and business models. A
conventional upgrade would not suffice. “Now that
we’re in the hardware business, the software

• Recognize and manage the cultural change and
transformation the new system entailed.
• Prepare the staff with new skills and competencies.

business, and very much into mergers and

1. “HANA Customer Spotlight.”
SAP, 2013.
http://goo.gl/UtnxDU.

acquisitions, we needed to reinvent our ERP system

After a careful search, EMC settled on a solution supplied

to support not just the business that we had evolved

by an industry-leading enterprise systems vendor. The

into but the businesses that we will continue to

solution would support from the outset open systems,

evolve into going forward,” said Michael Harding,

virtualization and cloud computing. To do that, while

project lead technical architect at EMC.

ensuring performance and flexibility, the new vendor also

1

3

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

Project Propel at
a Glance
} Overall mission:
Support both EMC’s
current and anticipated
future businesses.
} Key dates: Phase
1 launched in 2013;
Phase 2 (adding RSA
and services groups)
is scheduled for 2014;
Phase 3 (adding CRM
capabilities) is scheduled
for 2015.
} Business benefits
include: Reduced
capital and operating
expenses, improved
business performance,
the ability to leverage
commodity IT hardware,
improved security and
easy information sharing
to facilitate innovation.
} Business applications:
approximately 500.
} Transformation: More
than 125 EMC business
processes have been
added; 65 legacy
applications have been
retired.
} In-memory processing:
Four third-party
appliances.
} Product families:
More than 24, including
hardware, software and
business services.
} Training: 103 classes
have been completed,
training 1,200 “super
users.”
} Phase 1
implementation: 40,000
users at 316 sites in just
four days.

brought a slew of the latest technology advances,

acquired vFabric, GemFire, Cetas and Cloud

including in-memory processing.

Foundry). The combined service now provides data
warehouse protection, data deduplication and

Transformation Project

backup services.

The new enterprise system initiative, referred to
internally as Project Propel, was designed to

The new integration and innovation capabilities of

transform more than 125 EMC business processes

Project Propel have also helped EMC provide

by deploying 65 integrated, multi-module enterprise

real-time financial reporting. “The end-of-quarter

applications. Project Propel has also enabled EMC to

process [is] a huge amount of pressure,” Tony

deploy an integrated set of virtualized enterprise

Pagliarulo, EMC’s senior VP and chief operating

applications that can be adapted to support both the
way EMC works now and the way it is likely to work

“The key to innovation is to

in the future as it pursues ongoing innovation.

leverage technology for multiple

Project Propel’s initial rollout in 2013 involved some 20

departments. It’s being informed

modules. These included core ERP, business

that creates the basis for

intelligence (BI), supplier relationship management

sustainable innovation.”

(SRM) and advanced planning and optimizing (APO),
as well as some portals and various third-party
applications. Despite the project’s massive scale, it
was deployed to EMC’s internal users in just four days.

— G R E G S C H U L Z , S E N I O R A N A LY S T A N D
FOUNDER, STORAGEIO

officer, said at a recent investment analyst briefing.
“So it was critical for us to have real-time reporting

The effort was intended from the start as a

at a very detailed level.” Thanks to Propel, he

multi-stage rollout. The last stage, expected to go

added, “We were able to make that available to

live in 2015, will add customer relationship

users so they can make real-time decisions about

management (CRM) capabilities to bring the sales

which customers got what product. It was huge—it

groups under the same information-sharing

really saved our bacon.”2

umbrella, enabling all groups to see the same
information. At that point, information should flow

Project Propel is the largest IT transformation in

efficiently and seamlessly through major swaths of

EMC’s history. It delivers new technology, enables

the sprawling company, with innovation following

EMC to redesign key business processes and

right along.

ensures an agile approach to deployments. This, in
turn, helps EMC respond quickly and completely to

This information flow will facilitate another EMC

customer requests, provide a better mix-and-

objective, sustainable innovation, said Greg Schulz,

match of products and services, and share

senior analyst and founder of StorageIO, an IT

information internally.

consulting firm. “The key to innovation is to leverage
technology for multiple departments,” he added.

These types of capabilities are important, not only to

“It’s being informed that creates the basis for

EMC but to the entire IT industry. As the market

sustainable innovation.”

leaders continue to grow and gain capabilities with
acquisitions, the need to create open, integrated

Source: EMC Corp.

An early example of that type of innovation is EMC’s
creation of Pivotal, its agile infrastructure service.

2. “Transform Business
with an Innovation-Driven
Enterprise.” SAP Webcast,
2013.
http://goo.gl/trhTSI.

EMC formed Pivotal by combining capabilities it
gained through the acquisitions of Pivotal Labs,
Greenplum and VMware (which, in turn, had

4

Bloomberg Businessweek Research Services

systems will only grow.•
Alan Radding is a freelance business and technology
writer based in Newton, Mass.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Florida Crystals at a glance
A subsidiary of Fanjul Corp., Florida Crystals is the
world’s largest sugar refiner. A vertically integrated
company, it operates two sugar mills, a sugar refinery,
a packaging and distribution center, a rice mill and a
renewable energy power plant
Industry: consumer products and agriculture
Headquarters: West Palm Beach, Florida
Farmland: 155,000 acres
Products: organic and natural sugar; refined sugar;
organic and premium rice
Raw sugar production: 800,000 tons per year
Refined sugar production: 500,000 tons per year
Annual revenues: $5.5 billion (Fanjul Corp.)
Employees: 2,000
www.floridacrystals.com
Source: Florida Crystals

Page

44

RESEARCH UPDATE | Real-Time Business Case Studies

Real-Time Business Sweetens
Performance at Florida Crystals
In-memory computing leads to more effective decision-making and energizes an aggressive
growth strategy at the world’s largest sugar refiner.
BY STEPHANIE OVERBY

Florida Crystals At
a Glance
Industry: Agriculture and
consumer products
Company Description:
A subsidiary of Fanjul
Corp., Florida Crystals
is the world’s largest
sugar refiner. A vertically
integrated company,
it operates two sugar
mills, a sugar refinery,
a packaging and
distribution center, a rice
mill and a renewableenergy power plant.
Headquarters: West Palm
Beach, Fla.
Farmland: 155,000 acres
Products: Organic and
natural sugar; refined
sugar; organic and
premium rice
Raw sugar production:
800,000 tons per year
Refined sugar production:
500,000 tons per year
Annual Revenues: $5.5
billion (Fanjul Corp.)
Employees: 2,000

E

arly in 2014, due to global oversupply, sugar prices sank to less than 15 cents a
pound on the IntercontinentalExchange—the lowest price in three-and-a-half

years.1 But unlike manufacturers in other industries, Florida Crystals cannot cut

Real Time vs. Reality

production or hold back supply to compensate

FIGURE 1

when prices fall. Sugar cane, once planted,

Many companies struggle to deliver
in-the-moment business data in real time. (% of global
companies with one-day or near-real-time visibility)

produces a crop for several years, and mills must
extract the raw sugar from the freshly harvested
cane soon after each new crop ripens.

Cash positions/liquidity


Meanwhile, in a commodity industry such as sugar

Customer information/business volume

43%  

that is dominated by a few large players, it is difficult
for firms to differentiate their products, noted Simon
Ellis, practice director of supply chain strategies at
IDC. As a result, profit margins for sugar companies
are tight and cost efficiencies are key to profitability.
Florida Crystals faces another challenge, too:
business complexity resulting from an aggressive
growth-by-acquisition strategy and vertically
integrated operations that cover every step of sugar
production, from planting to distribution.
What began as a family-run sugar farm in Cuba in

57%

Working capital
39%
Supplier base/spend volume

28%
Financial performance

24%
Operational risk

17%
Source: The Hackett Group, 2013

the 1850s is now the largest sugar refiner in the

could quickly deliver the real-time capabilities

world. The company is involved in planting,

necessary for increased flexibility and better

harvesting, processing, packaging, marketing and

decision-making.

www.floridacrystals.com

distribution—all within its own farms and facilities.

Source: Florida Crystals

Recently, Florida Crystals expanded operations to

A Way to Stay Ahead

Europe and Latin America via acquisitions and

Florida Crystals likes to be out front. More than a

investment. It is also looking at opportunities in

decade ago, it was the first to mill certified organic

China and Africa.

sugar to be sold in the United States. That has
been true of its approach to using information

1. International Sugar and
Sweetener Report. “Raw sugar
futures fall below 15 cents/lb for
the first time since June 2010.”
Informa, Jan. 23, 2014.
http://goo.gl/OFuOKu.

March 2014 |

To improve agility in its competitive cost-

technology, too. The company has always situated

conscious industry, as well as to better manage

itself on the leading edge of IT, from being among

its broad range of business activities and

the first to roll out an ERP system in 1995 to its

aggressive growth strategy, Florida Crystals’

early adoption of cloud computing when it rid itself

leaders looked to information technology that

of its datacenter in 2010.

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

Florida Crystals’
Challenges

But in 2013, Florida Crystals was like many companies

} Standardize and simplify
infrastructure and
applications.
} Create agile processes
to facilitate growth
through acquisition.
} Deliver data and enable
analysis in real time.

and analytics environment: It was running numerous

struggling with the limitations of its existing applications
batch processes that delayed data delivery and analysis,
and it had devised workarounds that further complicated
already complex business processes. Also like others,
Florida Crystals lacked real-time visibility into key

FIGURE 2 Better Decisions Through Data
Business drivers for investment in analytics

include the following. (% responding)

Improving the quality of decision-making

Making quicker decisions


59%

53%

business information. A study of global companies by
The Hackett Group found that fewer than half have
real-time data about customers, suppliers or financial
performance (see Figure 1, “Real Time vs. Reality”).

Florida Crystals’
Solutions

Furthermore, more than 40 percent of IT managers

} Deploy an in-memory
suite of enterprise
applications to speed
information delivery to
business users.
} Move mission-critical
business applications to
a managed cloud service
with flexible capacity
to support geographic
expansion.
} Use real-time analytics
to enable employees to
make better operational
decisions.

responding to a recent IDC survey say that users

Improving planning and forecasting


47%

Developing new products, services and
revenue streams

47%
Source: IDG Enterprise Big Data Study, 2014. http://goo.gl/BNImWX

could not perform predictive analysis or work with
real-time data because they have to wait between

from re-imagining business processes to take advantage of

two and 10 days for their data to be processed.

it, noted business transformation expert Behnam Tabrizi,

2

consulting professor at Stanford University’s department of
Managers at Florida Crystals used to spend much of

management science and engineering.

their time waiting for reports to run or devising their
own spreadsheet analyses. But Vice President and

No More Waiting for Data

CIO Don Whittington chose to move the company’s

It took two months for Florida Crystals to migrate its full

most important business systems to an in-memory

stack of ERP software, from finance and materials

platform that could deliver data to employees much

management to sales and distribution, to a managed

more quickly than overnight batch processing. He

cloud service. Then the company switched over to the

also chose to run those systems using a managed

in-memory platform during a long weekend, keeping

cloud service with the capacity to process petabytes

terabytes of data in sync with no disruption to the

of data. The flexible capacity would accommodate

thousands of employees who use that data in three

the company’s expansion plans more cost effectively.

countries on a 24-hour basis. The migration began late

But Florida Crystals’ goal goes beyond merely

on a Friday and, Whittington said, “it was literally

producing reports faster. Ultimately, business leaders

business as usual on Monday.”

3

plan to transform the way the company operates.
Only it was more than business as usual. Key

2. Olofson, Carl W. and Henry D.
Morris. “Blending Transactions and
Analytics in a Single In-Memory
Platform: Key to the Real-Time
Enterprise.” IDC, February 2013.
http://goo.gl/e0vZP3.

With in-memory computing in the cloud, business

performance processes such as accounts payable

users can process reports on-demand, on their own

analysis doubled in speed. Cost center reports that used

and in real time—without waiting for IT to provide

to take minutes took milliseconds. Programs that ran for

data. Employees can now devote their days to the

hours finished in minutes. End-of-month workloads that

analysis and business decision-making that will

took three days to complete now run in about four hours.

underpin the company’s growth and differentiation

In fact, response times for most business transactions

strategy. As batch jobs are replaced by real-time

have improved by anywhere from 50 percent to 500

processing, the company can get information from its

percent, according to Whittington. “We don’t just make

supply chain faster than ever before, and thus get

work faster,” he said. “Work goes away.”

answers to customers more quickly.

3. SAP Technology. “Florida
Crystals Speeds Up Supply Chain
With Enterprise HANA Cloud.”
YouTube, July 8, 2013.
http://goo.gl/1KVrEy.

When employees do not have to download data to a

2

Eliminating batch processes is only the beginning,

spreadsheet, format it, upload it again and then

however. The greatest benefits from real-time data come

reconcile it with the four or five other reports their

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

Benefits of RealTime Business at
Florida Crystals

colleagues have created, they have more time to

} Self-service: Business
users can process
reports on demand,
without going through IT.
} Faster analysis: Most
business transactions
are 50 percent to 500
percent quicker, so
business users have
more time to study
their data.
} Improved flexibility
to support growth:
A scalable cloud
infrastructure
helps mergers and
acquisitions go more
smoothly and reduces
IT costs.
} New value creation:
With access to real-time
data, Florida Crystals
can focus more on
value-added work,
such as improving
inventory management;
developing new
formulations, products
or packaging; or
planning expansion into
new markets.

Center for Digital Business, and his colleagues, found

FIGURE
3


Real-Time Businesses
Outperform Peers

study the data and use it to make decisions.



Research by Erik Brynjolfsson, director of the MIT

Compared to other companies in their industries, firms using
advanced analytics are:

that among companies using data in their decisionmaking, productivity increases by 5 percent to 6
percent.4 Meanwhile, a survey of IT decision-makers
by publisher IDG Enterprise found that companies are
investing in analytics primarily to improve the quality

200% a s likely to be in the top quartile of financial
performance
300% as likely to execute decisions as intended

and speed of their decision-making (see Figure 2,

500% a s likely to make decisions much faster than
market peers

“Better Decisions Through Data”).

Source: Bain and Company Insights, 2013. http://goo.gl/lY1IvA

A Real-Time Transformation

There have been benefits for IT, as well, in line with Florida

Now, Florida Crystals’ executives are on the way to

Crystals’ cost-cutting goals. Total cost of ownership for

transforming the company into a real-time

computing and storage is down by an average of 30

business. “Your day is no longer spent running

percent. And by embracing the cloud, Whittington’s

transactions,” Whittington explained. “It’s [spent

technology group does not need dedicated resources or

taking] the results of those transactions and [using]

expertise to manage the in-memory platform. That will

that to a business advantage.”

“empower IT groups to become that part of the business
and not worry about the technology,” he said. “We leave

When it comes to implementing new technologies,

that to our partners.”

such as in-memory and cloud computing, said
Narendra Mulani, senior managing director at

And the more flexible systems will make the technology

Accenture Analytics, “the greatest value will come

transitions for future corporate acquisitions and mergers

from the ability to enable decision-making at the

go more smoothly. In the past, some of the acquired

right time.”

companies did not come with their technology
applications, requiring Florida Crystals to get off the

It is not so much that such new business systems are

seller’s technology in as little as 90 days. “A flexible

simpler, said Robert Parker, vice president of research

analytic model and underpinning technology can

at IDC Manufacturing Insights; it is that they are more

actually be hugely beneficial by allowing the company to

flexible. The same core technology can be used to

evaluate performance even if systems aren’t fully

meet varied and changing business demands,

converted yet,” IDC Manufacturing Insights’ Parker said.

without having to reprogram them constantly. “These
approaches create the necessary resiliency that

That should give Florida Crystals a leg up in its industry.

allows a company to be more responsive to market

A 2013 global survey of 400 large companies by Bain &

conditions,” he said. They enable more data-driven

Company found that firms using advanced analytics are

decision-making at the strategic level and greater

more likely to be in the top quartile of financial

agility when responding to events in real time.

performance within their industries, to execute decisions
as intended, to use data very frequently when making

4. Brynjolfsson, Erik, Lorin Hitt and
Kim Heekyun. “How Does DataDriven Decisionmaking Affect Firm
Performance?” 2012.
http://goo.gl/Wkav0C and http://
goo.gl/9VUMG6.

In a highly competitive and constrained market,

decisions and to make decisions faster than market

having flexible technology means Florida Crystals

peers5 (see Figure 3, “Real-Time Businesses Outperform

can focus on value-added activities that will

Peers”). Said Whittington, “It’s a game changer.” •

5. Pearson, Travis and Rasmus
Wegener. “Big Data: The
Organizational Challenge.” Bain and
Company Insights, Sept. 11, 2013.
http://goo.gl/lY1IvA.

management of inventory; new formulations,

distinguish it from the rest, whether it is better
products or packaging; or planned expansion into
emerging markets.

3

Bloomberg Businessweek Research Services

Stephanie Overby is a freelance business and
technology writer based in Boston.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Globus at a glance
Globus is the premier department store subsidiary of
The Federation of Migros Cooperative, the largest retailer and employer in Switzerland. The cooperative has
more than 40 business enterprises that are divided
into five strategic business units: Cooperative Retailing,
Commerce, Industry & Wholesale, Financial Services
and Travel
Industry: retail
2012 revenue: $849 million
Headquarters: The Spreitenbach, near Zürich,
Switzerland
Products: high-end fashion, beauty, living and
gourmet products
Employees: more than 3,000
www.globus.ch/en/index.html
Source: Globus

Page

48

RESEARCH UPDATE | Real-Time Business Case Studies

Globus Is Always in Style with
In-Memory Technology
Real-time insights enable Switzerland’s high-fashion department store to keep up with
fast-changing consumer preferences and optimize its supply chain.
BY JOE MULLICH

Globus at a Glance

T

he Federation of Migros Cooperative, the largest retailer and employer in
Switzerland, has long been noted for its supply chain excellence and creative

} Industry: Retail

thinking about logistics. Last year, for example, the company was honored with a

} Company description:
Globus is the premier
department store subsidiary of The Federation
of Migros Cooperative,
the largest retailer and
employer in Switzerland.
The cooperative has
more than 40 business
enterprises that are
divided into five strategic
business units: Cooperative Retailing, Commerce,
Industry & Wholesale,
Financial Services and
Travel

prestigious Swiss Logistics Award for determining the best transport routes for its

} Annual Revenue: 2012
gross revenue was $849
million using current
exchange rates1
} Headquarters: The
Spreitenbach, near
Zürich, Switzerland
} Products: High-end
fashion, beauty, living
and gourmet products
} Employees: More than
3,000
http://www.globus.ch/en/
index.html
Source: Globus

goods. It is not surprising that a company recognized
as the most innovative retailer in Switzerland,
according to a survey by the University of St.
Gallen, would also be a leader in finding better

FIGURE 1

Ready for Mobile Offerings

Respondents were asked which of the following
they would use if offered on their mobile device
while in-store.

and merchandizing techniques.2

Gather loyalty points or savings as you shop,
based on current promotions
88%

A prime example is Globus, Migros Cooperative’s

Real-time promotions

ways to leverage data to improve its supply chain

premier department store subsidiary. Founded in
1907, Globus operates 14 big retail stores that sell
clothing, cosmetics, jewelry, household supplies and
other upscale goods. The retailer’s need for continual
supply chain improvement is driven by higher
production costs, a weak Euro and rising raw material
prices. Consumers, meanwhile, are more demanding
and harder to please, which requires Globus to stay
on top of retail and fashion trends that can change as
fast as someone posts a new YouTube video.

88%

Order out-of-stock items in-store for home
delivery or put items on a wish list
82%
Shopping list, item locator and store navigator
79%
Scan products as you put them in your
shopping cart
77%
Base: 6,000 consumers from eight countries
Source: “Accenture Seamless Retail Study,” April 2013

Like many worldwide retailers, Globus operates
in a competitive landscape, in which consumer

sales performance data to identify merchandise

expectations are increasingly influenced by mobile

that is selling slowly. Such goods are a costly

device capabilities such as comparing competitive

issue for many retailers. Studies have shown the

offerings and sharing their opinions on social media

cost of owning excess inventory is approximately

(see Figure 1, “Ready for Mobile Offerings”).

2.5 percent per month, or 30 percent per year,
according to consulting firm The Retail Management

1. Globus Web site.
http://tinyurl.com/myfoz4k
2. Migros Web site.
http://tinyurl.com/m3f5o7s
3. Carter, Linda. “What Is Stock Turn Rate,
And Just Why Is It So Important?” The
Retail Management Advisors.
http://tinyurl.com/mg5urrh

AUGUST 2013 |

Insights at the Shelf Level

Advisors. Costs include interest, insurance, buying

With this relentless pressure, Globus depends on

expenses, receiving department expenses, property

timely, accurate reporting and analysis of sales

taxes, markdowns and shrinkage, the firm says.3

performance data to identify consumer trends so

Another issue is customer satisfaction—if store shelves

it can change its pricing and marketing strategies

contain too many items that customers do not want,

as the market changes. In particular, Globus uses

that leaves less room for the goods they do want.

© Copyright 2013. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

Globus needed to find a way to track slow-sellers

FIGURE 2

so it could then discount or promote those products
to clear precious shelf space for hot products.
Enabling this type of analysis was no easy matter,

Speeding Insights with
In-Memory Computing

Globus has seen quantifiable speed benefits from its
in-memory computing system.

considering the large data volumes involved. Globus
offers roughly 800,000 products through a network

Globus’ Data
Analytics
Challenges

of some 3,500 suppliers. With increasing sales

} Speed reporting. The
retailer wanted to
generate reports more
quickly so it could
stay on top of rapidly
changing fashion trends.

decisions was spiraling out of control.4

volumes and transaction data, the amount of time it
took Globus to generate reports used for inventory

Analytics at the Speed of Business
To get quicker insights, Globus implemented
in-memory database technology. By leveraging

} Minimize excess inventory:
Globus wanted to
reduce the amount of
slow-selling inventory to
make more shelf space
for hot items.

in-memory computing, Globus can now instantly
explore and analyze data from numerous sources.
Operational data is captured in-memory as

Before

After

Data
warehouse
capacity

550 gigabytes

60 gigabytes
(due to data
compression)

Time to
generate a
report on
slow-selling
items

22 minutes
(reports did
not include all
product lines)

17 seconds
(including all
product lines)

Time to
generate a
sales report

7 minutes

60 seconds

Source: IBM

transactions occur, permitting analytics to be

} Improve efficiency: The
retailer wanted to reduce
the volume of data it
stored while increasing
the insights and
information that data
provided.

performed against rich data sources and providing
the type of real-time insights that were simply not
Sales promotion reports, which once took seven

possible before.

minutes to complete, can be produced in a mere

Elements of Globus’
Analytics Solution
} An in-memory
technology-based
analytics platform
that helps to quickly
generate insights,
resulting in better
demand planning,
merchandizing and
marketing in real time.

This approach has provided numerous benefits.

60 seconds. “Previously, if we needed sales

For example, Globus used to store 550 gigabytes

figures of our 14 big stores, [we] had to generate

of data in its data warehouse. Thanks to its in-

14 separate reports and then combine the results

memory approach, that has decreased to only

manually,” Weiss says. “Now we can simply

60 gigabytes, one-ninth the original size. “This is

create one report at the touch of a button.” He

important, because the less memory we need, the

adds, “we can now process more complex and

lower our licensing fees and maintenance costs,”

comprehensive requests within seconds, providing

says Alexander Weiss, team leader, processes and

a range of new insights that were simply not

business warehouse at the company.

available without in-memory processing.”9

Queries and even forecasts that call up archive data

The insights culled from this approach have

are now faster than ever, dramatically improving the

increased employee readiness to embrace

speed of insights (see Figure 2, “Speeding Insights

analytics. Before the use of in-memory technology,

with In-Memory Computing”). “Previously, it took

“acceptance of the company’s key performance

22 minutes to generate a basic slow-seller report

indicator dashboard was low among managers,”

that did not include the whole product line,” Weiss

Weiss says. “With the new solution, the figures are

says. “Access to these reports had to be planned

referred to and used regularly, helping the company

in advance because of the processing time.”7 But

to manage its retail business more efficiently.”10

5

6

after implementing the in-memory database system,

4., 5., 6. SAP Web site.
http://tinyurl.com/lqvgz4k
7., 8., 9., 10. IBM. “Swiss Retailer Migros
Spots Consumer Trends in Real Time with
SAP HANA.” March 21, 2013.
http://tinyurl.com/lfvruwk

Globus can generate a slow-seller report for the entire

All this leads to better inventory decisions, a

product line in just 17 seconds. Employees obtain

stronger bottom line—and happier customers. •

needed information 98 percent faster, eliminating the
wait time by two hours per employee per day, so
decisions can be made on up-to-the-minute data.8

2

Bloomberg Businessweek Research Services

Joe Mullich is a freelance business and technology
writer based in Sherman Oaks, Calif.

Real-Time Enterprises

A Research Collection

Hewlett-Packard at a glance
Provides hardware, software and services to
consumers, small and midsize businesses, and large
enterprises, including customers in the government,
health and education industries
Industry: high tech
Products: computer hardware and software; IT services; IT consulting
Founded: 1939
Headquartered: Palo Alto, Calif.
Sales: $112 billion
Employees: 331,800
www.hp.com
Source: Hewlett-Packard

Page

51

RESEARCH UPDATE | Real-Time Enterprise Case Studies

HP Paves the Future with
Real-Time Insights
For the high-tech giant, in-memory-enabled speed is a business game changer.
BY JOE MULLICH

F

or the past several years, the high-tech industry has faced the challenges of
rising customer demand, shortened product lifecycles and constant innovation.

Now that technology has become a fundamental element of not just the workplace
but also everyday consumer life, however, the pressure to execute quickly against
these traditional challenges has never been greater.
Succeeding in this pressurized environment

Hewlett-Packard
at a Glance
} Products: computer
hardware and
software; IT services;
IT consulting
} Founded: 1939
} Headquartered:
Palo Alto, Calif.
} Sales: $112 billion
} Employees: 331,800
www.hp.com
Source: Hewlett-Packard

FIGURE 1

requires high-tech businesses to acquire realtime intelligence—about customer tastes and
preferences, market conditions, supply and
demand—and to take immediate action. For all of

Big Returns From Big Data
High tech expects above-average
returns on big data investments.

Utilities

these reasons, the high-tech industry has become

Energy & resources

one of the leading users of big data and analytics,



gleaning insights from the huge volumes of data

High tech

produced internally, by the business, as well as



externally, from its customers and partners.

60.6%
52.4%

Average


Technology firms are seeing a payoff from their



45.5%

initiatives. In a study by Tata Consultancy Services,

Banking/financial services


43.7%

high tech was among the top four industries in

Insurance

terms of spending on big data and in the top three



for expected return on investment (see Figure 1,
“Big Returns From Big Data”).

Travel/hospitality/airlines

37.9%

Hewlett-Packard, the $112 billion technology giant,

Telecommunications

37.9%

is a leading proponent of the value of big data. “We
eat, sleep and drink very large databases and big
data as a present reality,” said Dave Carlisle, chief
architect and strategist for HP’s Enterprise Group.1
“We are under increasing pressure. Business
expectations—and particularly user experience
expectations—are increasing significantly.”

73.0%



(Mean percentage
of expected ROI
for 2012 big data
investments.)

38.9%

Retail
36.4%
Life sciences
35.3%
Manufacturing
28.9%



Source: Tata Consultancy Services.
“The Emerging Big Returns From Big Data.” 2013

Consider, for instance, HP’s supply chain. Every

1. Dave Carlisle spoke recently in a
recorded Webcast.

FEBRUARY 2014 |

60 seconds, HP delivers 120 PCs, 100 printers,

servers. Every one of those shipments is the

1,200 ink and toner cartridges, seven network

result of countless actions and decisions made

devices, seven terabytes of storage and five

throughout the global supply chain. The question

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

FIGURE 2

In-Memory Initiatives
HP is focused on three strategic initiatives, powered by in-memory computing.

Strategic Initiative

Business Innovation

Data Consumption

Financial planning

• Drive accelerated and sophisticated scenario

1–2 terabytes of data and 400

planning in real time

business intelligence users

• Engage users with instantaneous results when
executing simulations and what-if scenarios
Quote-to-cash

• Accelerate core ERP processes in key areas,
such as order management administration,

28 terabytes of data and 1,000
business intelligence users

month/quarter/fiscal year-end processing and
live operational reporting, delivering modern
“experience at scale” to users
Next-generation

• Drive on-demand visibility and improved

business warehouse
analytics

inventory leveling in the product supply chain
• Enable near-real-time account visibility in the

7–10 terabytes of data; 1,500
business intelligence users;
3 predictive users

global quote-to-cash process
Source: Hewlett-Packard

Hewlett-Packard’s
Business
Challenges

the tech giant faces is, how to coordinate all those

After running numerous tests, HP discovered query

decisions to optimize pricing, reduce out-of-stocks

speeds had improved from an average of two hours

and shift manufacturing to align with customer

using traditional databases to just 88.23 seconds using

} Respond quickly to
changing conditions via
fast analysis of real-time
information
} Enable employees to
analyze data quickly and
intuitively
} Optimize the use of data
volumes generated by
the supply chain

demand. “To succeed, organizations need to

in-memory computing. As a result, HP employees will

make fast, informed decisions by extracting large

no longer experience radical swings in processing times

amounts of raw data from their systems to turn it

that vary depending on where data is stored. With user-

into information that is meaningful,” said Bill Veghte,

driven, powerful analysis and simulation capabilities, HP

chief operating officer at HP.2

workers will obtain immediate answers to virtually any
business question—with minimal help from IT.

To succeed in this endeavor, HP is embracing

2. Hewlett-Packard. “HP Opens
New Center of Excellence for
In-Memory Computing.” HP press
release, Jan. 10, 2013.
http://goo.gl/P80n5J.

2

in-memory computing, which enables real-time

The increased speed will have a wide-ranging impact

decisions through instantaneous analysis of big

on employee satisfaction and on meeting market demands

data sets. In-memory computing will enable HP to

and customers’ changing expectations. With built-in

take immediate action based on up-to-the-second

analytics, dashboards and reporting tools, data can be

insights into its financial planning, ERP and inventory

digested and presented intuitively, enabling employees to

processes (see Figure 2, “In-Memory Initiatives”).

quickly take corrective action and seize opportunities.

From Hours to Seconds

“At the end of the day, speed is a business enabler,”

The ability to analyze massive amounts of fast-

Carlisle said. “It’s cool from a technical standpoint

changing data in real time provides numerous benefits,

that a report that used to run in three hours can now

according to Carlisle. What HP employees will really

be done in 30 seconds. But the key is using speed to

notice is the unprecedented speed of accessing

rethink business experiences and processes in ways

information to make decisions, he said, particularly

not possible before.” For instance, employees will gain

given the vast size of HP’s underlying databases and

self-service access to financial information, enabling

the global scale of its multifaceted business.

more rapid analysis and reporting capabilities and

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

significantly reducing the time needed for closing
processes at the end of the month, quarter and
fiscal year.
With better—and faster—visibility into financial,
inventory and supply-chain information, HP will

Hewlett-Packard’s
IT Solutions

be able to detect and respond to issues and

} Use in-memory
computing to analyze
vast amounts of data
quickly
} Begin with a critical
system involving small
data sets
} Develop next-generation
business warehouse
analytics

managing risk and forecasting demand. HP could

exceptions more quickly, in addition to proactively
potentially accelerate inventory turns and ensure
profitable service delivery by instantly evaluating
and making granular changes in supply and

FIGURE 3

Order Management
Complexity

For each process, respondents were asked how many
IT systems are required to support it.

One System Two Systems
Three or More Systems
Order management
55%
21%

21%

Demand management
53%

15%

ERP
56% 9%

demand, reducing out-of-stocks and lost sales.

Warehouse management

34%
21%

Transforming processes and enabling new

Price management

32% 15%

capabilities are at the core of what manufacturers
are looking to achieve with analytics. “In our
research, only 10 percent of manufacturing
companies are satisfied with their ‘what-if’
capabilities, and only 24 percent of companies can
easily determine the profitability of decisions,” said

19%

28%
23%

Production planning

32% 11%

30%

Tactical supply planning

36%
17%

15%

Lora Cecere, founder of Supply Chain Insights.

Transportation planning

36% 9%

Tackling Order Management

Manufacturing execution systems
23% 15%
23%

HP’s in-memory computing efforts began with
a focus on its largest single ERP environment,
which includes order management administration,
month/quarter/fiscal year-end processing and live
operational reporting, accounting for over $41 billion

21%

15%

Product lifecycle management

34% 9% 11%
Source: Supply Chain Insights. “Go Big or Go Home?” July 2012.
http://goo.gl/p3x8B

in revenues. The HP Account Management Portal

Throughout 2014, HP will use in-memory computing

is used by thousands of HP order administrators

to provide better data visualization, and it will begin

worldwide. In-memory computing slashed the

to incorporate mobile capabilities. Taking a staged

time required to run a report from upwards of

approach to in-memory computing enabled HP to

seven minutes to 40 seconds. “Users can get their

scale out its knowledge from both a technical and a

display in real time while they talk with customers

“comfort level” standpoint. “We are starting to deliver

on the phone,” Carlisle said. What made this so

disruptive capabilities now,” Carlisle said, “while

compelling, he added, is that there was no need to

understanding and planning for even larger scale

retrain users, which increased the time to value. “It is

changes over the coming years.”

a good first step that brings material change without
disruption.”

With the combination of its real-time big data anlytics
foundation and strong 2013 performance,3 HP seems

Streamlining order management is a challenge for
many companies. According to a study by Supply
Chain Insights, order management often requires

3. Meola, Andrew. “Why HewlettPackard is Up Today.” The Street,
Jan. 13, 2014.
http://goo.gl/v8OtZs.

more than one system (see Figure 3, “Order
Management Complexity”).

3

Bloomberg Businessweek Research Services

poised to do just that.”•
Joe Mullich is a freelance business and technology
writer based in Sherman Oaks, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

HSE24 Germany, Austria, Switzerland at a glance
A leading home-shopping network based in Germany
Industry: retail
Founded: 1995
2012 sales: €515 million
Employees: 725 at HSE24; approximately 2,100
external (call center, logistics)
Customers: 8 million people have shopped at HSE24,
equivalent to more than 10 percent of Germans over the
age of 18
Products: 20,000 different products are sold each year
Product segments: fashion (35 percent), beauty/wellness (23 percent), jewelry (21 percent) and home living/
household and DIY (21 percent)
www.hse24.de
Source: HSE24

Page

55

RESEARCH UPDATE | Real-Time Big Data Analytics Case Studies

Using Real-Time Insights, HSE24
Gets Closer to Customers
With in-memory computing and predictive analytics tools, Europe’s home-shopping network can
offer a personalized experience—and solve costly issues—in real time.
BY JOE MULLICH

HSE24 Germany,
Austria,
Switzerland at a
Glance
} Founded: 1995
} Sales: €515 million
(2012)
} Employees: 725 at
HSE24; approximately
2,100 external (call
center, logistics)
} Customers: 8 million
people have shopped
at HSE24, equivalent
to more than 10
percent of Germans
over the age of 18
} Products: 20,000
different products are
sold each year
} Product segments:
fashion (35 percent),
beauty/wellness (23
percent), jewelry (21
percent) and home
living/household and
DIY (21 percent)
www.hse24.de

HSE24, a leading home-shopping network based in Germany, measures its business
in milliseconds. The 18-year-old company reaches 41 million households in Germany, Austria and Switzerland, and it has now expanded into Italy and Russia. All of its
home-shopping channnels must stay aware of customer buying patterns and behaviors and respond to them in real time. For example, if it appears that a sales spike is
depleting inventory after one of the channels
displays a red shirt, it must immediately switch to
promoting a blue shirt to encourage purchases of
stock on-hand.
Considering that a new customer call comes
through every two seconds, it is easy to
understand the company’s need for speed.
Retailers generally are moving to real-time
strategies. But because home-shopping networks
are based on “selling live,” the growing trends
of big data analytics and real-time retailing are
particularly crucial for this retail niche.
“The amount of data available to retailers is

FIGURE 1

Sharpening Insights in a
Digital Shopping World

Retailers understand the value of data but struggle to
turn it into profitable insights. (percent of respondents)

Proprietary data can help differentiate the
retailer’s products and services
67%
Harvesting customer insight from data is a
key challenge
58%
Data collection is a key challenge
52%
Active users of analytics that extensively use their
data to generate new ideas and opportunities
25%

enormous,” said Don Peppers, an author and
founding partner of Peppers & Rogers Group,

Source: Accenture. “Seamless Analytics: Three Imperatives for the Retail
Digital Marketplace.” 2013. http://goo.gl/aFFy85.

a marketing consultancy that specializes in
customer-centric practices. Retailers are working

immediate action on the insights gleaned. The

to find ways of using their data to improve

approach enables the company to engage more

operations and gain insights into what customers

personally with its customers and create highly

want at the exact moment of need (see Figure 1,

targeted marketing campaigns. Additionally, it

“Sharpening Insights in a Digital Shopping World”).

will help reduce product returns significantly—
an historically costly issue, particularly for

Source: HSE24

As HSE24 continues its rapid expansion across

omnichannel retailers.

Europe—and fortifies its increasingly omnichannel

JANUARY 2014 |

strategy, including mobile, social networks and

A Complex and Growing Business

the Web—the company is turning to in-memory

In the German-speaking market, HSE24 operates 18

computing as a foundation for success. This

call centers and four logistics centers. It processes

technology is enabling HSE24 to rapidly analyze

orders for more than 1.5 million customers each year

huge stores of customer information and take

with strong partners such as DHL. For each hour of

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

live broadcasting, the retailer offers two to three new

FIGURE 2

products that range in price from €20 to €150, on

On any given day in 2013, HSE24 serviced
thousands of customers.

average, and up to €35,000. In 2013, the company
fielded 14.6 million calls and shipped 11.2 million



Calls Received Parcels Shipped

packages (see Figure 2, “A Day in the Life”).



(Daily)

“We are running seven days [a week], 365 days a year,”

HSE24’s
Challenges

said Christian Schnetzer, CRM team lead at HSE24.

1

“We need our systems every minute, every day.”

} Capture, analyze and
respond to customer
data in real time.
} Build highly targeted and
personalized marketing
campaigns.
} Provide marketers with
do-it-yourself tools to
reduce IT overhead.
} Reduce costly product
returns.
} Maintain a consistent
customer experience
across channels.

A Day in the Life

(Every Weekday)

Average 40,000

37,000

Peak 100,000

74,000

Source: HSE24

The challenge for HSE24 is developing deep
relationships with its customers to both attend to

In-memory computing enables companies to

and even anticipate their needs, despite no face-to-

quickly analyze very large volumes of up-to-the-

face interaction. Doing so is becoming even more

second and fast-changing data from diverse

complex as the company expands (see Figure 3,

sources, including sales and customer data from

“Geographic and Channel Expansion”).

internal systems and social media sentiment from
the Web. As such, in-memory computing seemed

HSE24 increasingly interacts with customers on

like an ideal way for HSE24 to keep pace with

digital channels, including online, mobile apps

the increased complexity of doing business by

and social media. In fact, its electronic and mobile

gleaning insights from its growing data volumes in

commerce segments have grown at nearly twice the

real time.

rate of the company’s business as a whole.
Because nontechnical users can ask complex

1. Christian Schnetzer spoke at
a July 23, 2013, SAP Webinar
titled “HSE24 Runs SAP HANA.”
http://goo.gl/jTgTNq
2. Michael Kuenzl spoke at a
July 23, 2013, SAP Webinar
titled “HSE24 Runs SAP HANA.”
http://goo.gl/jTgTNq

These developments have caused an exponential

questions of current data and receive answers in

increase in customer data, as well as the need

real time, they can take meaningful action during

to keep up with dramatic shifts in taste from one

small windows of opportunity, when the chance of

country to the next. Michael Kuenzl, senior vice

success is greatest. Additionally, these users can

president of IT systems at HSE24, described

obtain a complete picture of customer desires,

the channel expansion as moving from “simple”

enabling them to provide a personalized experience

multichannel to “complex” multichannel. “They are

and avoid costly errors in how they sell or market.

a community buying with us and open to sharing

“More and more, the value of big data is finding an

their experience with the community,” whether on

immediate reaction,” Peppers said. “Retailers want

Facebook, Twitter or YouTube, he said.

to be living in the ‘now’ moment.”

2

The “Now” Moment

HSE24 applied in-memory computing to some of its

It is now critical for HSE24 to monitor customers’

most pressing challenges in campaign optimization

opinions, likes and dislikes, because the “digital

and product returns. Before, when the marketing

footprints” that Web shoppers leave behind can

department wanted to target the customer

profoundly influence marketing, inventory and

segments that would be most likely to respond to

customer service. Not to mention customers

specific campaigns, it would need the business

themselves, who express comments on social media

intelligence group to analyze this information. That

and expect service representatives to listen and

process could take a week or more.

respond—quickly. It is fast becoming a necessity to

2

develop an intimate understanding of customers’

Now, using customer engagement intelligence

diverse and changing tastes, as well as to act

applications running on in-memory computing,

instantly on these insights.

marketers can perform the analysis themselves.

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

Through an intuitive user interface, they can query

FIGURE 3

the data in real time to detect customer buying
patterns based on granular demographics, such
as age or where they live, Kuenzl said.

Launch

Germany

October 1995

Marketing staff can now drill down into millions

Austria

October 1996

of customer records in seconds, using recent

Switzerland

December 1997

16 hours of live
shopping each day

May 1998

Online store

December 1998

HSE24 Digital (renamed
HSE24 EXTRA) as a
second TV station

September 2005

HSE24 TREND “lifestyle”
TV channel

September 2010

Shopping app for
smartphones

November 2010

Italy

June 2011

buyers intend to return a product when they order

Russia

April 2012

it, 40 percent order more variations of a product

Shopping app for iPad

November 2011

Shopping app on
Google TV

June 2013

charts, making it easy to see data patterns.
} Implement a new
in-memory customer
engagement intelligence
solution.
} Provide marketers with
intuitive and user-friendly
customer segmentation
tools.
} Implement predictive
analytics to uncover
hidden customer trends.

data from a wide variety of sources. “We can do
the selection in seconds, and we don’t need the
business intelligence department,” Kuenzl said.
“We can play with the data.”

Reducing Costly Returns
HSE24 is also looking to in-memory computing
to reduce return rates and improve margins.
According to global management consultancy
Kurt Salmon, the cost of processing a return
can be two or three times that of an outbound
shipment of the same item.3 The National Retail
Federation, meanwhile, found that 40 percent of

and 40 percent of all product returns are due to
poor product information.4
For Web and phone- or mail-order companies, the

3. Morrell, Liz. “The Value of
Returns: What Does it Mean for
your Business?” RetailWeek,
Feb. 19, 2013.
http://goo.gl/4SPGz1
4. Informatica. “How Rich Data
Sells in Multichannel Commerce.”
On-demand Webinar.
http://goo.gl/6jZkog

Source: HSE24

freight and handling costs of returned goods are

Once it detected this pattern, HSE24 could take

particularly high. For HSE24, reducing returns by

appropriate action. For example, it could improve

one percent can lead to a seven-digit improvement

its product descriptions to help customers more

in the bottom line. Given these high stakes, the

accurately select the right products on the very first

company demonstrated how it could study clusters

order. It also could develop a promotional campaign

of customers who exhibit similar returns behavior

to reward high-return customers if they lower their

with the goal of reducing return rates.

return rates over a specific period of time.

In the demo, HSE24 identified different groups of

Best of all, Kuenzl said, marketers can e-mail

customers who frequently return products. Using

information to campaign managers so insights can be

predictive analytics and in-memory computing,

translated into action immediately. This is something

it analyzed a particular group based on two

HSE24 expects to do frequently in the future, as

elements: how many products they order and

it explores more real-time uses for in-memory

how quickly they pay for those products. It soon

computing and its ever-growing mounds of data. •

became clear that these customers tend to
order products in a variety of sizes or colors to
determine which they want to keep and which
they would return.

3

HSE24 has grown by establishing businesses in new
countries, new TV channels and new digital platforms.

New Business
The tools represent the analysis in graphics and

HSE24’s Solutions

Geographic and Channel
Expansion

Bloomberg Businessweek Research Services

Joe Mullich is a freelance business and technology
writer based in Sherman Oaks, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Johnsonville Sausage at a glance
Family owned company produces fresh, precooked
and smoked sausage
Industry: consumer products
Headquarters: Sheboygan Falls, Wis.
Founded: 1945, family owned, privately held
Employees: 1,400
Presence: 6 manufacturing facilities in the United
States; products available across the U.S. and in 30
other countries; sales offices in Canada, China, Japan
and Mexico
www.johnsonville.com
Source: Johnsonville Sausage

Page

59

RESEARCH UPDATE | Real-Time Business Case Studies

Johnsonville Cooks Up a
Real-Time Recipe

Real-time business enables the nation’s leading sausage brand to continuously innovate,
optimize performance and plan for the future.
BY MICHAEL S. GOLDBERG

I

nnovation and consumer products go hand-in-hand. In today’s global
marketplace, new offers, products and services need to be well-targeted,

and they need to be implemented quickly. That is the mindset that drives

Johnsonville
Sausage at a
Glance

Johnsonville Sausage, a family-owned enterprise

promotions, according to a recent study by AMG

that has built a leading brand of sausage products in

Strategic Advisors.1 Immediate insights from analytics

Industry: Fresh, precooked
and smoked sausage
Headquarters: Sheboygan
Falls, Wis.
Founded: 1945, familyowned, privately held
Employees: 1,400
Presence: 6 manufacturing
facilities in the United
States; products available
across the U.S. and in
30 other countries; sales
offices in Canada, China,
Japan and Mexico

the United States, to invest in real-time analytics.

would enable Johnsonville to track special offers, such

www.johnsonville.com

as coupons. With real-time data, Johnsonville could
To become more agile and ready to optimize

correlate the offers with sales performance and adjust

opportunities, the company is working to shift toward

the programs based on those insights.

an analytics-driven culture, says Ron Gilson, CIO and
vice president at Johnsonville. The goal, he says, is to

The IT foundation for Johnsonville’s analytics

embed real-time data-driven decision-making

capabilities, which will be built over multiple years, is

throughout the enterprise to anticipate future business

based on real-time processing, enabled by in-memory

needs rather than just respond to past events.

computing. In-memory computing allows very large
volumes of data, from multiple sources, to be rapidly

One high-profile example is trade promotions. On

and easily analyzed. The deployment also extends

average, consumer products (CP) companies spend

data visualization to mobile devices, to maximize

13.7 percent of their gross sales on trade

end-user interaction. But the strategy goes well

Source: Johnsonville Sausage

FIGURE 1

Most Consumer Products Companies in Early Analytics Stages
(adoption rates of new technologies, %)

Completed
100
90

26%

Implementing
4%
44%

Piloting or budgeting
7%
45%

No plans
4%
33%

80
70

48%
15%

40

AUGUST 2014 |

41%

37%

30
22%

19%

10
0

67%

44%

50

1. AMG Strategic Advisors.
“The Trend Behind the Spend:
A Study of Trade Promotion and
Merchandising Spending in the
Consumer Packaged Goods (CPG)
Industry.” Acosta, 2012.
http://goo.gl/Lnwhsg.

11%

55%

60

20

4%
19%

22%

7%

4%

Software as a
service (SaaS)

22%

Digital media

Mobile
platforms

Social network
collaboration

Base: 27 leading CP companies
Source: Grocery Manufacturers Association and The Boston Consulting Group, 2013. http://goo.gl/dFnylX

© Copyright 2014. Bloomberg L.P. All rights reserved.

Advanced
analytics

Big data

RESEARCH UPDATE | Real-Time Business Case Studies

FIGURE 2

Analytics Vision

J ohnsonville Sausage expects to gain more visibility into its operations by collecting
and analyzing data in real time for all sources. Areas targeted for improvement include:

A Quest for Growth
Johnsonville is pursuing its growth strategy
from a position of market leadership in the

Trade promotion management
and optimization

Track performance of retail promotions in real time, respond to
market trends, measure results and optimize outcomes.

United States. Three out of four bratwurst sold

Integrated data repositories

Provide sales, marketing, supply chain and other functions with a
consistent view of key performance indicators.

national brand of Italian sausage, smoked-

Mobile device dashboards

Deliver and update results quickly to encourage users to explore
data trends on devices such as tablets.

Johnsonville’s reach expands across North

Pricing

Analyze retail point-of-sale activity in real time to optimize prices
and maximize revenue based on demand fluctuations and supply.

Product launches

Collect data on new product sales to analyze sales trends and
anticipate future performance.

Supply chain management

Gain real-time visibility into inventory, tracking movement from
factory to store to consumer.

report-building efforts on preparing data for

Manufacturing operations

Analyze shop floor data to predict when machines will need
maintenance.

with limited forward-looking or predictive

Source: Johnsonville Sausage

in the U.S. are Johnsonville. It’s also the No. 1
cooked links and fresh breakfast sausage links.
America and to about 30 additional countries.
Even with its strong market posture, the
company was spending 80 percent of its
analysis. Data was primarily historical in nature,
capabilities. Shop floor data was collected but
not queried, analyzed or combined in an

Benefits of
In-Memory
Computing at
Johnsonville
} Improved query
performance time
} Positive executive
response to tablet-based
visual data presentations
} Ability to meet business
objectives, such as more
accurate sales forecasts
and marketing plans,
optimized promotions,
visibility into competitive
posture, increased agility
and responsiveness, and
increased profitability

beyond IT, as business leaders and managers

efficient or standard manner. Promoting business

transition from a mindset of making gut-based

intelligence reports using advanced data visualization

decisions, based on decades of experience, to what

was in its infancy. Viewed as a whole, the company’s

Gilson calls “fact-based decisions.”

analytics efforts were a collection of disconnected silos
that made it difficult to share information across

“We get new insights when we can put different

business functions.

people with different perspectives in front of our
data. That is what it’s all about: How can we

An example is Johnsonville’s efforts to understand data

generate new insights—because insights are the

about market demand, Gilson says: “When we talk about

catalyst for innovation,” Gilson says. “That can be a

demand signals, we have different languages. Marketing

new product innovation; it can be a new service. It

speaks in marketing speak. Supply chain speaks in

could be a new process innovation within our

supply chain speak. Sales speaks in sales speak. We’ve

facilities or in our support groups.”

got to get rid of that.” Unifying its approach to analytics
means creating an integrated and harmonized view of

Throughout the CP industry, businesses are

data, so everyone can examine the same data.

harnessing new IT capabilities like real-time big data

2

analytics to pursue growth and innovation initiatives,

The catalyst for investing in new IT capabilities was

notes the Boston Consulting Group (BCG). In a 2013

Johnsonville’s need to optimize its trade promotions

BCG study, 75 percent of CIOs at CP companies

program. Timely tracking of its retail promotional activities

said a top IT objective was supporting business

is essential to managing its relationships with retailers,

growth, compared with fewer than 20 percent in

analyzing revenue and spending trends, and evaluating

2010. That said, the industry as a whole is still in the

promotion effectiveness. This requires combining different

early stages of incorporating analytics into

data sets to derive insights about sales, correlated with

operations, with most respondents piloting big data

special offers like coupons and other retail promotions.

and advanced analytics projects and few having

Until recently, it has been an extremely manual and

completed their implementations (see Figure 1,

time-consuming effort to connect these dots in a way

“Most Consumer Products Companies in Early

that enables decision-makers to assess performance and

Analytics Stages”).

plan for the future.

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

Johnsonville’s
Business
Challenges

Gilson says the company chose systems that enabled

} Optimize spending on
trade promotions by
measuring results and
making adjustments in
real time to maximize
returns
} Create an integrated
and harmonized view
of information across
business functions
} Enable decision-makers
to assess performance
and plan for the future

relevant applications that collect and prepare data for

it to modernize existing business intelligence and data
warehouse systems with the in-memory platform and
analysis. Adding on to existing systems also enables
the IT staff to develop new skills in managing the
systems. Other business use cases add to the
expected return on investment (see Figure 2,
“Analytics Vision”).

Future Opportunities
The first phase of the in-memory platform went live in
May 2014, and Gilson says early indications are

FIGURE 3 Better Decisions Through Data
Business drivers for investment in analytics

include the following. (% responding)

Improving the quality of decision-making

Making quicker decisions

Improving planning and forecasting


59%

53%

47%

Developing new products, services and
revenue streams

47%
Source: IDG Enterprise Big Data Study, 2014. http://goo.gl/BNImWX

positive. He has seen performance improvements in

Johnsonville’s
Solutions
} Modernize existing
business intelligence
and data warehouse
systems with real-time
analytics, enabled by an
in-memory computing
platform
} Centralize data in a
harmonized repository
to track retail point-ofsale data and provide
views into supply chain
operations
} Extend data visualization
to mobile devices

query times, and the new tablet-based visual data

processes to design, build and deliver products and

presentations are popular among executives.

services, Morris says.

Johnsonville plans to build on these early successes,

Picking Up Signals

using a more centralized approach to analytics.

Johnsonville exemplifies these trends by working to

Establishing a harmonized data repository will enable

speed the collection of market demand signals and

the company to track retail point-of-sale data, as

develop truly real-time capabilities. It can analyze

well as provide views into supply chain operations,

product and promotion performance data by collecting

such as shipments and inventory. Adding third-party

market data from sales systems, retailers’ point-of-sale

data sets, such as syndicated market data, will

systems and syndicated research data. The analytics

enable business analysts to gauge market trends. All

platform lets Johnsonville test promotions, measure the

of these activities are tied to critical business

results and improve execution to maximize returns.

objectives: improving sales forecasts and marketing

“They can continually fine-tune things,” Morris says,

plans; optimizing promotions to occur at the right

“and make adjustments based on the outcome.”

time and value; simplifying and integrating market
analysis and Johnsonville’s competitive posture;

With Johnsonville’s program underway, Gilson says the

setting prices; increasing business agility and

company believes in an “all-in” approach. “We’ve got to

responsiveness; and increasing profitability.

be able to be generating these insights daily, bring them
through the innovation pipeline and execute on them.

Efforts at Johnsonville to inject more and better data

This is a critical point,” the CIO says. “It’s not about giving

more quickly into business decision-making are

an elite few the opportunity to do the analysis and do the

emblematic of the real-time business and big data

analytics and create insight. It’s about every member in

analytics trend, says Henry Morris, senior vice

Johnsonville on a daily basis, whether that is a small

president of worldwide software and services at IDC

insight driven through some predictive analytics for

(see Figure 3, “Better Decisions Through Data”).

maintenance, or some other transactional-oriented

Companies across industries are pursuing strategies

analytics, or it’s in sales and marketing going after the big

to measure and improve the performance of

wins. Really, it’s about orienting the entire organization’s

business processes and to experiment with

analytics on the future.” •

opportunities to cut costs or drive revenue, using
data to assess value and make changes in real time.
Data analytics is being targeted at financial
processes, risk assessment, relationships and

3

Bloomberg Businessweek Research Services

Michael S. Goldberg is a business and technology writer
and editor based in the Boston area.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Kaeser Kompressoren SE at a glance
One of the largest providers of compressed air
systems and compressed air consulting services
in the world
Industry: industrial machinery & components
Headquarters: Coburg, Bayern, Germany
Year founded: 1919
Number of employees: 4,800 worldwide
Countries of operation: 91
www.kaeser.com
Source: Kaeser Kompressoren SE

Page

63

RESEARCH UPDATE | Real-Time Business Case Studies

Kaeser Puts Customers First with
Big Data and Real-Time Business
The privately held German maker of air compressor systems and services taps predictive
maintenance to drive ROI and a better experience for its customers.
B Y L A U R E N G I B B O N S PA U L

Kaeser
Kompressoren SE
at a Glance
Industry: Manufacturing
and services solutions
Headquarters: Coburg,
Bayern, Germany
Year founded: 1919
Number of employees:
4,800 worldwide
Countries of operation: 91
www.kaeser.com
Source: Kaeser Kompressoren SE

Makers of heavy industrial goods aren’t exactly famous for their focus on the
customer experience. But a leading maker of compressed air systems is trying to
change that perception. Family-owned since 1919, Kaeser Kompressoren SE is
one of the largest providers of compressed air

improve after-sales service. The company

systems and compressed air consulting services

implemented a real-time business solution powered by

in the world. Its roughly 4,800 employees operate

an in-memory computing platform, which is able to

in nearly 100 countries across the globe.

analyze vast amounts of granular, real-time data
produced by a machine-to-machine (M2M) interface.

For a company that sells an industrial product in a

This platform enables Kaeser to automatically monitor air

business-to-business (B2B) environment, Kaeser

compressors in use at customer sites. Kaeser is hardly

is uncommonly focused on customers. The

the only company using this technology: Companies are

company’s Web site says its goal is to “provide

forecast to step up their investments in M2M technology

exceptional customer service coupled with

over the medium term (see Figure 1, “Global M2M

innovative products and progressive system

Market Growth”).

solutions.” Privately held Kaeser stands out in
another way, as well, as the site makes clear:

FIGURE 1

“You are doing business with a company with a

Use of the technology that underlies predictive
maintenance, machine-to-machine communication,
will expand along with maintenance analytics.
(total annual revenues, M2M tech producers)

family tradition of producing quality equipment,
not a company focused on meeting Wall Street
estimates. Thomas Kaeser is proud to put his
name, his father’s name and his father’s father’s

Global M2M Market Growth

2011

$21.52 billion

name on every product.”
The Kaeser line of air compression systems

$85.96 billion

2017

includes machines many have never heard of:
rotary
screw compressors, vacuum packages,

Source: MarketsandMarkets.com. http://goo.gl/l1QTsO

refrigerated and desiccant dryers and

condensate management systems, as well as

The Kaeser system is capable of running analytics

portable compressors, filters and
blowers. As

against the vast amounts of M2M data generated from

important as the quality of those products is

the systems’ sensors and meters, including energy

Kaeser’s commitment to after-sale service.

consumption, operational status and compressed air
quality. The objective: to predict which equipment will

September 2014 |

Predictive Maintenance
Powered by Big Data

need service, and when. Predictive analytics gives

In fact, Kaeser recently made a significant

avoiding unexpected outages, which can cause

investment to harness the power of big data to

grievous injury to the bottom line.

© Copyright 2014. Bloomberg L.P. All rights reserved.

customers the luxury of planning downtime and

RESEARCH UPDATE | Real-Time Business Case Studies

Kaeser
Kompressoren
Business
Challenges

“Our customers simply can’t afford any
unplanned system downtime,” noted Kaeser

FIGURE 2

ABI Research forecasts predictive and prescriptive
maintenance analytics will dominate the analytics market
within five years. (advanced maintenance analytics
percentage of total analytics market)

Kompressoren AG CIO Falko Lameter in a
recent article.1 The company’s predictive

} Make maintenance and
other services offerings
more cost-efficient
and more valuable to
customers
} Streamline the supply
chain
} Innovate through new
technologies and
business models

maintenance ensures that its superior products
stay that way even after years of use. “Our

Advanced Maintenance Analytics to Rise

2014

23%

products are built for a lifetime,” Lameter said.
“But to get optimal longevity and performance,
they must be maintained properly.” Kaeser’s

60%

2019

real-time predictive maintenance services help
customers achieve nearly 100 percent reliability.

Kaeser
Kompressoren
Solutions

Source: ABI Research. http://goo.gl/9oJm67

Crucially, customers no longer have to monitor

breakdown gets to occur, so over time both

their mission-critical air compressors around the

parties can save money.

clock. Kaeser handles that chore through its M2M

} Implement a real-time
business solution
powered by an inmemory computing
platform to enable
automatic monitoring
of customer site air
compressors
} Use predictive analytics
to help customers plan
downtime and avoid
unexpected outages
} Use an M2M interface
to monitor customers’
mission-critical air
compressors around the
clock, with resources on
call to address issues
swiftly
} Establish a portal to
accelerate problem
resolution and enable
customer
service
personnel to be more
proactive and more
customer-oriented

interface, with resources on call to address issues

“We’re always thinking of new ways to run things

swiftly. The system has direct, M2M connections

better and innovate new technologies and business

and real-time alerts, so potential failures can be

models,” Lameter explained. Case in point: Kaeser’s

detected before they occur, with corrective action

transformation into a real-time business that puts the

undertaken before business is affected.

customer at the center and focuses on delivering
solutions, not mere products. The services-based

Lameter believes the addition of predictive analytics

business model not only secures the company’s

for its equipment sets Kaeser apart from the

market position and keeps it one step ahead of

competition—a belief that is driving investment

increasing customer demands, it also improves

across the business spectrum (see Figure 2,

margins and revenues. In fact, total revenues from the

“Advanced Maintenance Analytics to Rise”).

sort of predictive analytics that Kaeser uses are
expected to grow sharply in coming years (see Figure

ABI Research principal analyst Aapo Markkanen

3, “A Growing Market”).

says the cost savings associated with the ability
to predict equipment breakdowns before they occur

Using real-time analytics, Kaeser can monitor

is potentially huge, both for Kaeser (or any other

key
parameters in real time, including power

solutions manufacturer and service provider)

consumption, operational availability and
safety or

and its customers. “From the manufacturer’s

compressed air quality at each customer air station

perspective, the key benefit is the ability to

against
minimum and maximum allowed values.

transform a product business into a product-

Service engineers can analyze this
real-time data from

and-service business,” he says.

a portal without having to visit the customer site.
Serving key data to the portal accelerates the

“Many manufacturers have been trying to do this

resolution of any problem, keeping customer

for years, with their maintenance and other services

operations reliable
and efficient. With the

offerings, but what makes the difference here is

comprehensive view that the portal provides,

that the combination of [M2M communication] and

customer
service personnel have become more

analytics can make such services more cost-

proactive and ever more customer-oriented.

efficient from the vendor’s point of view, as well as

1. http://goo.gl/VHzpWK

2

more valuable from the customer’s point of view,”

“What makes our predictive maintenance solution

Markkanen says. Maintenance is conducted only

cutting-edge is its computational
complexity combined

when truly needed, he says, but still before a

with the scale on which it operates,” wrote Lameter in

Bloomberg
Bloomberg Businessweek
Businessweek Research
ResearchServices
Services

RESEARCH UPDATE | Real-Time Business Case Studies

a recent blog post.2 “It collects thousands
of

Benefits of
In-Memory
Computing
at Kaeser
Kompressoren

real-time data streams from customer air stations;

FIGURE 3

big data scales into the
terabyte range. We
collect, analyze and act upon that huge amount of

A Growing Market

ABI Research forecasts worldwide maintenance
analytics revenues for the next five years will top
$24 billion. (projected revenues from maintenance
analytics, CAGR: 22%)

data
as part of our routine operations.”

} Improved
equipment
uptime
} Decreased time to
problem resolution
} Reduced operational
risks
} Accelerated innovation
cycles
} Better alignment
between Kaeser’s
products and services
and its customers’
needs

2014

$9.1 billion

The predictive maintenance portal handles
these
complexities while providing service engineers
with user-friendly, Web-based and mobile access.

$24.7 billion

2019

As a result, the portal keeps Kaeser service
engineers fully
informed of equipment status at

Source: ABI Research. http://goo.gl/9oJm67

customer sites so they can provide a
consistently
positive customer experience.

and
development of our next-generation
equipment,” Lameter wrote.

The power and scale of the system provide a real
advantage. “We had to harness the power of big

This is an important benefit, Markkanen says.

data to remain at the vanguard of our
industry in

“Manufacturers are able to study their products’

the 21 Century,” Lameter said recently. At the

behavior in the field more closely than what has

same time, the company simplified its software

been possible before, so much of the analysis done

landscape by migrating its CRM application to a

for maintenance purposes can be used to steer the

robust in-memory platform. The in-memory

product development work, too,” he says. “If certain,

platform helped Kaeser accelerate its core

previously hidden circumstances prove detrimental

business processes and achieve
operational

to the product time and again, it may be possible to

excellence, he wrote.

address them when designing the product.”

Running on the in-memory platform, database

In this way, product development can become more

response times are now
five times faster than

of an iterative process, with manufacturers

before. “This has allowed us to bring the

continuously learning about their products and

entire
lifecycle of the sales process under careful

improving them accordingly. “All this can make a

scrutiny—from lead management to
requirements

manufacturer like Kaeser more competitive in its

analysis, solution planning and solution

market,” Markkanen says.

st

implementation. And with
real-time information,
we have streamlined our supply chain to deliver

The big data and in-memory platform that form the

on
customers’ changing needs while generating

basis of Kaeser’s predictive maintenance service have

healthy margins,” Lameter wrote in the blog post.

produced substantial benefits for the nearly 100-yearold company. According to Lameter, “We are seeing

Aligning Product Development with
Customer Needs

improved
uptime of equipment, decreased time to

The predictive maintenance system has had a

innovation cycles. Most importantly, we have been able

significant, unforeseen side effect. Stored in

to align our
products and services more closely with

Kaeser datacenters, the big data
culled from

our customers’ needs.”•

monitoring machine operations forms the basis for
sophisticated data analysis, including insights
relating to new product development. “This helps

resolution, reduced operational risks and
accelerated

Lauren Gibbons Paul has written extensively on
customer relationship management and customer
experience management for more than 15 years.

us further optimize our
service processes and
furnishes highly valuable input for the research

2. http://goo.gl/iyjdoy

3

Bloomberg Businessweek Research Services

This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Maple Leaf Foods at a glance
A leading CP company that specializes in meat and
bakery products as well as agribusiness
Industry: consumer products
Headquarters: Toronto, Canada
Founded: 1991
2012 revenues: $4.9 billion (Canadian)
Employees: 1,200
www.mapleleaf.ca
Source: Maple Leaf Foods

Page

67

RESEARCH UPDATE | Real-Time Business Case Studies

Maple Leaf Foods Turns Over a New
Leaf with Up-to-the-Minute Insights
Real-time business enables Maple Leaf Foods to keep pace with fast-changing market conditions,
increase profitability and hone a competitive edge.
BY JOE MULLICH

I

n a world that moves at Internet speed, consumer products (CP) companies
face a particular challenge in responding to fast-changing tastes. And taste is

literally the issue for Maple Leaf Foods, a leading CP company that specializes in

Maple Leaf Foods
at a Glance

meat and bakery products, headquartered in Toronto. Product pricing is also a

Industry: Bakery, meat,
agribusiness
Headquarters: Toronto,
Canada
Founded: 1991
Revenues (2012): $4.9
billion (Canadian)
Employees: 1,200

make-or-break issue, with ever-fluctuating

www.mapleleaf.ca

customer satisfaction.

consumer demand and commodity prices.

FIGURE 1

Because its primary products have extremely short
shelf lives (see Figure 1, “Three Core Businesses”),
Maple Leaf needs to move swiftly to ensure its new
product introductions, marketing and pricing
strategies will translate into sales, profits and

Three Core Businesses
Maple Leaf Foods is organized into three
major groups.

Meat Products
Bakery Products


Agribusiness
Products

Packaged
meats and
meals

Premium fresh,
frozen and
specialty bakery
products

Hog production

Fresh pork,
poultry
and turkey
products

Fresh pasta and
sauces

Rendering and
biodiesel
operations

Source: Maple Leaf Foods

To meet these challenges, Maple Leaf needed a
real-time understanding of its complex business
operations. Over the years, the company has
grown through dozens of acquisitions, leaving it
with a multitude of systems. That is why, about five

Source: Maple Leaf Foods

years ago, Maple Leaf launched an initiative to

Number One in Many Markets

coordinate its diverse data volumes and is now

Open a cupboard or refrigerator in the typical

embracing in-memory computing—technology that

Canadian home, and you are likely to find Maple Leaf,

enables multiple sources of data to be rapidly and

Schneiders, Dempster’s or one of the company’s other

easily analyzed.

brands. Maple Leaf Foods ranks number one in market
share in many Canadian food categories, including

1. Canadian Financial Executives
Research Foundation. “Real Time
Business: Making The Most Of Big
Data.” 2012. http://goo.gl/TujxFE.

MARCH 2014 |

The company’s efforts have resulted in integrated

fresh bakery products, branded prepared meats,

analytics across business functions and

chilled ready-made meals, branded fresh poultry, and

instantaneous insights to support real-time

fresh pasta and sauce. Additionally, the company has

decision-making. This is a critical issue for many

operations in the United States, the United Kingdom,

CP companies, which need to respond quickly to

Asia and Mexico. To stay ahead of the competition,

rapidly changing market conditions. “Ultimately,

Maple Leaf introduces 100 or more new products

the big piece is profitable growth so we can

every year, such as its Maple Leaf Natural Selections,

actually understand what’s happening in the

a line of deli meats that contain no added

marketplace quickly and secure more profitable

preservatives, artificial ingredients, fillers or MSG.

growth as a result,” said Michael Correa, vice
president, Information Solutions, at Maple Leaf

Although an acquisition spree was key to Maple Leaf’s

Foods.1

growth, it also left the company with 65 plants and 35

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

Benefits of RealTime Business at
Maple Leaf Foods

enterprise resource planning (ERP) systems. Because

this meant consolidating its data into a single ERP

of the difficulty connecting information among these

system, enabling integrated analytics across business

isolated systems, Maple Leaf relied on weekly

functions and developing the ability to analyze its data in

} Standardized view
across the enterprise:
System consolidation
and process
standardization have led
to improved operations
through the use of
in-memory analytics for
management.
} Faster analysis
speeds: Business users
are experiencing speeds
that are 100 to 1,000
times faster than with
traditional databases.
} Self-service: Users can
now run their own ad
hoc queries and reports.
} Real-time pricing
analysis: Maple Leaf
will be able to price
products based on the
cost fluctuations of raw
materials by combining
syndicated data with
supply and demand
information from
transactional systems.
} Future use cases: The
company is evaluating
the use of in-memory
analytics for recipe
development, demand
planning, production
planning and trade
promotion to help it
further improve decisions
and profitability.

summaries of business performance data, which

real time. The first move in this direction began in 2008,

hampered its ability to respond to fluctuations in supply

when Maple Leaf launched Project LeapFrog, in which it

and demand. In addition, business users were unable

consolidated its many ERP systems and implemented

to easily drill down into reports to truly understand the

common business processes across the organization.

supply and demand of individual products.
“A big part of the business is protein—poultry, hog and
These issues grew particularly acute between 2009

prepared meats—and each had their own way of doing

and 2011, when the Canadian dollar appreciated

work,” Hutchinson said. “And if you go over to the bakery

by 50 percent, resulting in Maple Leaf operating at

side, like Dempster’s or frozen foods, each of them ran

a cost gap of 15 percent to 25 percent versus its

almost every process internally their own way.”3

U.S. competitors. “If [Maple Leaf is] going to grow,
it can’t rely on the exchange of the U.S. dollar,”

An important data source that Maple Leaf needed to

said Dr. E. Jeffrey Hutchinson, global CIO of Maple

integrate with its internal systems was the fluctuating

Leaf Foods. “If it’s going to compete against the

market prices for “hogs and hams,” Correa said, which

U.S. and European players, it needs the right

can change throughout the day. Because the company

capabilities in house.”

trades such products on the mercantile exchange, he

2

said, “We’re looking at real-time, live information.”

Building the Analytics Foundation

Maple Leaf needs to combine supply and demand

As the competitive landscape toughened, the

information from its transactional systems with data

company realized it needed a better handle on its

generated by the marketplace to enable real-time

cross-organizational performance. For Maple Leaf,

pricing analysis.

FIGURE 2

Most CP Companies in Early Analytics Stages
(adoption rates of new technologies, %)

Completed
100

26%

90

Implementing
4%
44%

Piloting or budgeting
7%
45%

No plans
4%
33%

55%

48%
44%

60

15%

50
40

41%

37%

30
20

22%
19%

10

2. Schick, Shane. “Maple Leaf
Foods’ ERP system project: A CIO
strategy.” IT World Canada, April
18, 2011. http://goo.gl/8daaTX.
3. Schick, Shane. “Maple Leaf
Foods’ ERP system project: A CIO
strategy.” IT World Canada, April
18, 2011. http://goo.gl/8daaTX.

0

22%

22%

7%

4%
Software as a
service (SaaS)

Digital media

Mobile
platforms

Social network
collaboration

Base: 27 leading CP companies
Source: Grocery Manufacturers Association and The Boston Consulting Group, 2013. http://goo.gl/dFnylX

2

11%
67%

80
70

4%
19%

Bloomberg Businessweek Research Services

Advanced
analytics

Big data

RESEARCH UPDATE | Real-Time Business Case Studies

Maple Leaf
Foods’ Business
Challenges

To enable real-time insights and provide employees

} Real-time information
and analytics were
required to optimize
product pricing and
enable other business
performance insights.
} Data needed to be
consolidated from 35
ERP systems.
} Processes needed to be
standardized across the
enterprise.
} Business users needed
the ability to drill down
into reports.

project focused on customer data that contributes

with a range of analytics tools, Maple Leaf
embraced in-memory computing. Its first in-memory
to profitability, such as profit and loss, price
elasticity, and sales and marketing data, all of which
amounted to about one terabyte of data. Although

FIGURE 3 Better Decisions Through Data
Business drivers for investment in analytics

include the following. (% responding)

Improving the quality of decision-making

Making quicker decisions


59%

53%

Maple Leaf had used analytics for more than a
decade, in-memory computing enables the
company to ask entirely new questions; for example,
“How should products be priced tomorrow in line

Improving planning and forecasting


47%

with supply and demand?”

Developing new products, services and
revenue streams

47%

The In-Memory Edge

Source: IDG Enterprise Big Data Study, 2014. http://goo.gl/BNImWX

The ability to answer such questions through

Maple Leaf Foods’
Solutions
} Consolidated systems
and standardized
processes
} In-memory technology
to provide instantaneous
analysis of disparate data
} Analysis and visualization
tools for hundreds of
users

4. Schick, Shane. “Maple Leaf
Foods’ ERP system project: A CIO
strategy.” IT World Canada, April
18, 2011. http://goo.gl/8daaTX.
5. Yuhanna, Noel, Holger Kisker,
Ph.D. and David Murphy. “Case
Study: Maple Leaf Foods Relies
On SAP HANA To Enable Faster
Business Analytics.” Forrester
Research, Oct. 28, 2013.
http://goo.gl/QGBfXt.
6. Henschen, Doug. “Oracle
In-Memory Apps: Hunting Hana.”
InformationWeek, April 11, 2013.
http://goo.gl/nGvZns.
7. Yuhanna, Noel, Holger Kisker,
Ph.D. and David Murphy. “Case
Study: Maple Leaf Foods Relies
On SAP HANA To Enable Faster
Business Analytics.” Forrester
Research, Oct. 28, 2013.
http://goo.gl/QGBfXt.

analytics puts Maple Leaf ahead of the pack.

databases.5 For example, profit-and-loss analysis previously

According to a late 2013 study by the Grocery

required 15 to 18 minutes, but it now takes 15 to 18

Manufacturers Association and The Boston

seconds with in-memory computing, according to Correa.6

Consulting Group, only 23 percent of CP

The in-memory computing system has also enabled a

companies had implemented or completed an

self-service data platform on which users can run ad hoc

advanced analytics initiative (see Figure 2, “Most

queries and reports (see Figure 3, “Better Decisions

CP Companies in Early Analytics Stages”).

Through Data”).

And according to Lora Cecere, head of research

The use of in-memory computing has simplified Maple

firm Supply Chain Insights, only a small percentage

Leaf’s business rules, processes and data, removing

of companies are satisfied with their “what-if”

complexity and enabling collaboration. Business users

capabilities and few can easily determine the

can create more reports and queries, rather than

profitability of decisions. “They need more real-time

relying on the old system of canned reports. At the

monitoring, dashboards, early-warning systems and

same time, the company has achieved a standardized

other imperatives that can only be accomplished

view across the enterprise, enabling it to better

through smarter use of analytics,” she said.

manage its operations.

In Maple Leaf’s case, such insights could potentially

As Maple Leaf begins using predictive analytics supported

guide the company on product introductions, as

by in-memory computing, it plans to price products based

well. “We’ll start to see what the reality is and be

on the cost fluctuations of raw materials—such as wheat,

much faster at adjusting to market conditions as

pork and chicken—and combine this information with

they change,” Hutchinson said. “We’ll be able to

syndicated data from sources like Nielsen to obtain

make sure that our trade promotion monies, for

real-time pricing information. The company is also

example, are giving us what we want to get out of

evaluating many new use cases, such as recipe

them. Too often, unless you are very proactive there,

development, demand planning, production planning and

it just becomes a slush fund.”4

trade promotion to help it improve decisions and
profitability even further.7 •

In early 2012, Maple Leaf extended its real-time
analytics capabilities to 800 business users. In some
cases, business users experienced speeds that were
100 to 1,000 times faster than with traditional

3

Bloomberg Businessweek Research Services

Joe Mullich is a freelance business and technology writer
based in Sherman Oakes, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Mercedes-AMG at a glance
The performance unit of Mercedes-Benz, it tests the
limits of driving dynamics and performance with
hand-built engines
Industry: automotive
Parent company: Daimler AG
Headquarters: Affalterbach, Germany
Founded: 1967
Employees: approximately 900
www.mercedes-amg.com
Source: Mercedes-AMG

Page

71

CASE STUDY

Technology

Small/Midsize
Business

Marketing
& Sales

Mercedes-AMG: A Showcase for
Real-Time Business Decisions
The maker
M
of high-

Y28 K28 C78 M52 Y28 K6

C73 M19 Y40 K1

ercedes-AMG
C65 M29
Y79 K22 C61 M20 is
Y78the
K3

performance

unit of Mercedes-Benz, testing the

limits of driving dynamics and performance

performance
with its hand-built engines. But the division
automobiles is
is also a testing ground for revving up
building nextC0 M60 Y100 K17 C28 M88 Y70 K19 C48 M89real-time
business
performance.
Y84 K49 C61
M66 Y61 K52
generation
manufacturing
As manufacturers integrate complex machinery
with networked sensors to create next-generation
operations on
production processes, they are gathering more data
a real-time
than ever before that could eliminate waste and
business
improve efficiency, according to the U.S. National
Institute of Standards and Technology. In fact,
platform.
1

Figure 1

Analytics Offers Relief From
Operational Pressures

Need to reduce the cost of manufacturing operations
70%

Need to improve delivery of new products to market
38%
Management of global supply chains
36%
Management of demand volatility
32%
Customer mandates for improved order fulfillment
27%
Source: Aberdeen Group, “Big Data in Manufacturing Operations,”
2012. http://goo.gl/E43v5f

Cutting costs is a top reason for seeking more
insight from data.

pressure to cut costs while bringing new products
BY ST E P H A N I E
OV E R BY

to market is pushing manufacturers to make better
use of that data, the Aberdeen Group has found

cars, such as its million-dollar S-class line and the

(see Figure 1, “Analytics Offers Relief From

new GLA compact SUVs, but also invested in more

Operational Pressures”).

efficient manufacturing processes to cut the cost of
product delivery and improve vehicle quality.

In the automotive industry, manufacturers must

Daimler saw Mercedes-AMG as the perfect place to

manage a greater number of both models and

test out real-time systems that might benefit the

customization options as they adjust to fragmented

larger enterprise.

consumer demand, while also managing shorter

1. National Institute of Standards
and Technology. “Real-Time
Data Analytics for Smart
Manufacturing Systems Project.”
http://goo.gl/KZ9nzW.

product life cycles, according to McKinsey and

Employees working in the performance unit’s

Company (see Figure 2, “More Product Options,

engineering-focused manufacturing environment

Shorter Product Cycles”). To make the best use of

have yearned for real-time access to information for

their data riches as they tackle these challenges,

nearly 50 years, observes Dirk Zeller, Mercedes-AMG

companies are implementing technology capable of

head of IT Consulting. In addition, Mercedes-AMG

analyzing large volumes of data from disparate

operations are concentrated at the company’s

sources in real time.

Affalterbach, Germany, headquarters. “We have
everything close to us, from design and development

Mercedes-AMG and its parent company, Daimler

to marketing and sales, making us a good company

AG, are among the businesses that are expanding

to test out innovation, with regards to the products

their product portfolios. Daimler is currently one of

as well as in the IT area,” Zeller says.

the largest producers of premium cars and the

AUGUST 2014
© Copyright 2014.
Forbes Insights.
All rights reserved.

biggest global manufacturer of commercial

LESS WAITING, MORE WORKING

vehicles. To increase market share and profits, the

In late 2012, Mercedes-AMG began to deploy an

€118 billion company has not only introduced new

in-memory platform across business functions to
FORBES INSIGHTS

1

FORBES
INSIGHTS
CASE STUDY

analyze large volumes of data in real time. The

Figure 2

company started with back-office systems, such as

More Product Options, Shorter
Product Cycles

accounting and finance, and then moved on to its
of its one-of-a-kind vehicles.

Ultimately,
MercedesAMG is
considering
simplification
of the
hundreds of
systems it
uses to
engineer, sell
and service
cars to run on
a single,
in-memory
platform.

Avreage product life cycle (months)

Number of models

131

core operations—the development and manufacture

122

111

106

110

100

The first goals were to “be more efficient by
crunching numbers faster,” says Mercedes-AMG CIO
Reinhard Breyer. Company leaders saw an
opportunity to free financial analysts from waiting
for reports and enable them to focus on strategic

22

12

2002

BMW

analysis and decision-making.
But a faster, more efficient back office was just a start.
The key to becoming a real-time enterprise is not

2011

32

30

44

15

2002

Audi

2011

2002

2011

Mercedes-Benz

Source: McKinsey & Company, “Manufacturing the Future:
The Next Era of Global Growth and Innovation,” 2012. http://goo.gl/EcQ6tq

A greater number of models and options and shorter
product life cycles challenge automakers.

delivering more data quickly, it’s more quickly
delivering information that can improve the processes

equipment, and efficient use of the facilities was a

that lead to competitive advantage. For Mercedes-

priority. The ability to correlate historical test data in

AMG and Daimler, these are product development and

real time with sensor data from the engines being

manufacturing processes.

tested enables engineers to identify possible
problems more quickly.

Real-time efforts “are useless if they aren’t aligned,”
says Behnam Tabrizi, consulting professor at

“We are able to analyze test data from engines and

Stanford University’s department of management

test vehicles faster than before,” Zeller says. “And that

science and engineering. “If you throw new

leads to more insights faster, as we compare more

technology at a bad process, you won’t resolve

data and use complex analytics without losing time.”

anything. It’s not just about real-time systems, it’s
about real-time organizational transformation.”

Now an engine test that shows unusual behavior can
be stopped at any step of the test procedure;

A NEW WAY TO TEST ENGINES

engineers used to have to wait to analyze the majority

Even today, every Mercedes-AMG engine is hand

of data until after the hour-long test run has ended.

built from start to finish by a master engine builder:

That change, in turn, creates more engine-testing

it’s a hallmark of the brand. But company leaders

capacity each week. It also gives engineers more time

recognized an opportunity to use big data analytics

to focus on refining engine quality.

to also improve the engine production process.
to transform the company using real-time

A PLATFORM FOR REAL-TIME
TRANSFORMATION

applications, they zeroed in on quality assurance

What’s more, Mercedes-AMG now has a scalable

for its engines.

platform that it can apply to other areas of its

When they went looking for the next high-value area

business, and which Daimler can begin to apply
Earlier this year, Mercedes-AMG piloted a real-time

across the enterprise. Both Mercedes-AMG and

quality assurance platform that harnesses predictive

Daimler are expanding their vehicle lines, and thus

analytics to optimize engine-testing processes when

the number of projects they must manage.

manufacturing its vehicles. The dynamometers the

Mercedes-AMG has already introduced three new

company uses to determine the torque or power

compact models in pursuit of new market segments.

characteristics of engines being tested are high-cost

2

FORBES INSIGHTS

FORBES
INSIGHTS
CASE STUDY

The company is also enabling car buyers to
customize their vehicles more than ever before.
The strategy seems to be working: in 2013 Mercedes
AMG sold more than 32,000 automobiles, its most
successful year ever.

“We are able to
analyze test
data from
engines and test
vehicles
dramatically
faster than
before.”
–Dirk Zeller,
head of IT
Consulting,
Mercedes-AMG

The project expansion and growth could strain
existing project management processes, so
Mercedes-AMG leaders have begun exploring how

FIGURE 3

Delivering Real-Time Supplier Data

Customer information
46%
Employee data
Product data
42%
Supplier information
23%

the same data analysis and predictive functionality
can be applied to engine testing for project
management. The goal is to be able to visualize in
real time how the product creation and engineering
process is progressing and to predict potential

46%

Source: Accenture, “High Performance in IT: Defined By Digital,” 2013.
http://goo.gl/7cc4KM

Among top-performing companies, nearly half provide customer
and employee data to employees in the moment, but less than a
quarter can do the same with supplier information.

bottlenecks, such as supplier delays, before they
impact manufacturing ramp-up.

who will be consuming the data and what they need to
know. Business leaders and managers shouldn’t become

Both Mercedes-AMG and parent company Daimler

overwhelmed by the amount of data available to them,

anticipate benefits beyond managing an individual

Zeller advises. The concern is similar to that which

project more efficiently. They want to take

accompanied the introduction of email, Zeller recalls.

advantage of real-time analytics to give employees

“People felt disturbed by too many alerts, tending to

who work across several projects, such as those with

ignore them over time,” he says. “During our projects,

a focus on braking systems, visibility across all

we need to define if our target audience is prepared for

projects, so they can see if a new part is in time,

the solutions we’re offering.”

quality and budget during the engineering process,
if it is available for testing or inventories are low.

Daimler’s IT group recently awarded Mercedes-AMG
several innovation awards for the testing and

Even among top-performing companies, access to

implementation of its real-time systems. The parent

such supplier intelligence in real time is relatively

company will be using the performance unit’s

rare. Less than one-quarter of leading enterprises

experience and lessons learned as the basis for its

can provide up-to-the-minute supplier data to their

planned implementation of in-memory analytics.

employees (see Figure 3, “Delivering Real-Time

“They’re the trigger that started us on this path,” Zeller

Supplier Data”). Mercedes-AMG, however, plans to

says. “And we had a huge will to innovate.” •

be the exception.
The goal is to have new business intelligence

ABOUT FORBES INSIGHTS

software running on the in-memory databases by
functionality every two months. “We are working

Forbes Insights is the strategic research and thought leadership
practice of Forbes Media, publisher of Forbes magazine and Forbes.
com, whose combined media properties reach nearly 50 million
business decision-makers worldwide on a monthly basis.

very closely with our business partners to deliver

Bruce Rogers

exactly what is needed in an easy-to-use user

CHIEF INSIGHTS OFFICER

the end of the year, and then to release new

experience,” Zeller says.
One key to success when deploying real-time

Brian McLeod
DIRECTOR, NORTH AMERICA

Writer: Stephanie Overby is a freelance business and technology
writer based in Boston.

capabilities is gaining a deep understanding about

FORBES INSIGHTS

3

Real-Time Enterprises

A Research Collection

National Football League at a Glance
A professional U.S. football league that runs a
17-week regular season
Industry: sports & entertainment
Headquarters: New York, New York
Employees: 1,100
Founded: 1920
Number of Teams: 32
Viewership: 205 million people tuned
in to NFL games in 2013
www.nfl.com
Source: National Football League

Page

75

RESEARCH UPDATE | Real-Time Business Case Studies

The NFL’s Advanced Analytics
Score with Football Fans

Looking to spur fan engagement, the National Football League is putting user-friendly data analytics
tools in the hands of fantasy football fanatics.
BY STEPHANIE OVERBY

P

rofessional football is America’s true national pastime. Viewership of NFL
games has grown steadily over the past decade. During the 2013

football season, NFL games attracted three times more eyeballs than other

The National
Football League
at a Glance

primetime TV offerings, and 34 of the 35 most-

FIGURE 1

watched TV shows in autumn 2013 were NFL games

NFL’s Gameday TV Viewership

Industry: Sports and
entertainment
NFL league office
employees: 1,100
Founded: 1920
Number of teams: 32
Viewership: 205 million
people tuned in to NFL
games in 2013

(see Figure 1, “NFL’s Gameday TV Viewership”).

Gameday outdraws the leading primetime
broadcast television shows. (average in millions of viewers)

But if regular viewers of NFL games on Sunday,

2009

www.NFL.com

very real for them. “When Tom Brady throws that

Source: National Football League

touchdown pass, it’s six points for the New England

NFL broadcast

Primetime broadcast
18.4

Monday or Thursday nights are considered fans,

8.5

those who participate in the NFL-inspired fantasy
football leagues might better be deemed fanatics. The

2010
20.0

fantasy teams that individuals put together might be

8.2

imaginary, but the process of managing a franchise is

2011
19.8
8.1

Patriots,” says Daniel Shlossman, the NFL’s director of
product for fantasy football and mobile games. “But if

2012
19.3

I’m playing Tom Brady, it’s also six points for my

7.6

fantasy team.”
This year, there will be 41 million fantasy players

2013
20.3
7.0

across all sports, nearly 70 percent of whom say that
football is their favorite, according to the Fantasy

Sources: NFL and The Nielsen Company. http://goo.gl/nGSRhN

Sports Trade Association (FSTA), with their ranks
increasing at least 10 percent every year. Around

So when the NFL was looking for new ways to use

three-quarters of fantasy football participants use four

data to maximize the engagement of football fans, the

or more Web sites for research. They spend nearly 18

fantasy market was a logical target. In addition to the

hours a week consuming sports content and more

direct revenues that fantasy league participation

than 8.5 hours a week specifically on their fantasy

generates, fantasy league members view about seven

teams, FSTA says (see Figure 2, “Fantasy Sports

times more content, including text, video and data, on

Users Are Active Fans”).

NFL.com than nonmembers. The NFL has its own
fantasy sportswriters online, and NFL.com is chock
full of key breaking news, expert analysis and
weekly rankings to help fantasy managers develop
their teams.

OCTOBER 2014 |

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

The NFL’s Player
Comparison Tool
Challenges

There has been no shortage of companies looking to

} Increase direct
engagement with
fantasy football users
by developing a player
comparison tool for
NFL.com
} Create a simple user
interface that enables
users to easily make
better decisions about
their fantasy teams
} Enable customization so
that the tool is equally
valuable to novices and
experts
} Ensure that the online
tool is scalable and
reliable, with 100 percent
uptime

NFL.com in 2010 and has sprinted into a position

be the preferred destination for fantasy footballers.
The NFL launched its own fantasy football league on
among the leaders.
In 2011, the league introduced in-game video,
delivering big-play highlights to viewers only seconds
after they happen on the field. In 2012, it added more
functionality, such as social tools and basic research
tools, along with simpler fantasy football games to lure
in the novice or casual user. The league also
incentivizes participation in its own fantasy leagues by
awarding prizes for league champions, such as trips

FIGURE 2

Fantasy Sports Users Are
Active Fans

• There are 36.6 million fantasy users across all
sports.
• 69% of fantasy users say football is their favorite
fantasy sport.
• The universe of fantasy users is growing at a rate
of 10% to 12% annually.
• 74% of fantasy users go to four or more Web
sites to conduct research.
• Fantasy users dedicate 17.89 hours a week to
watching sports.
• Fantasy users spent 8.67 hours a week
specifically on fantasy sports.
Sources: Fantasy Sports Trade Association

to the Super Bowl (see Figure 3, “The ROI of
Customer Engagement”).

“We are leveraging a custom cloud platform to answer
very fantasy football-centric questions,” Shlossman says.

Elements of the
NFL’s Player
Comparison Tool
Solution

Last year, as new, more advanced tools for data

“‘Which player should I start? Who’s going to perform

analysis and visualization became available, the NFL

better in a certain environment?’ Fans are wanting an

saw an opportunity to further fuel its captive fantasy

answer very quickly that they can understand.”

contingent. “In 2013, we wanted to focus on the

} Deploy the tool on an
in-memory analytics
platform in the cloud to
ensure real-time
processing, scalability
and reliability
} Utilize self-service data
visualization software to
deliver player analysis in
a user-friendly format
} Enable users of the tool
to customize player
analysis along five
dimensions:
performance, matchup,
consistency, upside and
intangibles

data,” Shlossman says. “We wanted to make it

The tool uses 10 years of historical information to make

simpler to understand the data, make it easier to play

predictions about player performance so that fantasy

fantasy football and grow that market.”

franchise owners can make data-driven decisions
about their teams. They can analyze and track more

Putting Big Data in Customers’ Hands

than 100 stats on each player, from team defense

As is the case with any statistics-generating sports

tendencies to home-and-away performance

organization, the NFL has for years been collecting

comparisons. The tool also incorporates variables

and analyzing what is now commonly known as big

ranging from the forecast weather at kick-off time to

data. But that activity has taken on a sharper focus

playing surface to injury reports. Historical and real-time

in recent years. “We are able to use our own

data from live games is fed into a statistical model that

exclusive content, data and statistics to increase

predicts player performance.

the fantasy market,” Shlossman says. The league
wants fantasy players to compete on NFL.com.

“There are lots of things we can do with the data to break

But, he adds, “at the end of the day, we want fans

it down at a very detailed level,” Shlossman says. “It’s all

playing fantasy football because it brings them

about the live data and understanding who the players

closer to the game.”

are and who the best players are for me to play in my
fantasy team.”

The question was, “how do you bring a tremendous

2

volume of data and statistics to fans in a very

A Tool for Rookies and Veterans

simplified, intuitive and highly visual way?” says Vishal

The behind-the-scenes number-crunching that delivers

Shah, the NFL’s vice president for digital media

player comparisons is very complex, but the user

business development. The NFL used the same

interface had to be simple, Shah says, and the tool had

in-memory analytics platform and data visualization

to work for the fantasy rookie and the fantasy pro. The

software that businesses deploy to gain a competitive

NFL wanted a tool that was just as valuable for someone

edge in their industries for its Player Comparison Tool.

who has been fielding fantasy teams for 15 years as it

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

“At the end
of the day,
we want
fans playing
fantasy
football
because it
brings them
closer to the
game.”

was to someone who has never done it before. “A

Houston Texans’ Andre Johnson or the Denver

Stability and Scale on Any Given Sunday

—DANIEL

Broncos’ Wes Welker at receiver. The two are very

For any fan-facing system, the NFL requires 100 percent

SHLOSSMAN,

different players. Welker is consistent, catching short

uptime. That’s quite a challenge for a pursuit that

passes over the middle of the field and delivering

involves millions of users hitting the system at the same

FA N TA S Y F O O T B A L L

steady fantasy points. Johnson is known for streaking

time—just before kick-off. “We’re a direct-to-consumer

AND MOBILE GAMES,

down the edge of the field and reeling in the long,

business,” Shlossman says. “[The tool must] scale to

NFL

rainbow passes that can end in a touchdown. The

millions of users who want to access this data at any

tool “kicks back a simple-to-read answer about who

given moment.”

FIGURE 3

tool that works for both markets was the goal,”

The ROI of Customer
Engagement

Shlossman says.
Throughout the week, a fantasy football user typically
makes three types of decisions: whom to start, whom
to add or drop, and whom to trade. The tool can
guide users through all three types of scenarios,
enabling them, say, to evaluate a rival user’s proposed
trade or whether to start a particular quarterback.
Novice users can keep it simple and do a basic

• A fully engaged customer represents an
average 23% premium in terms of share of
wallet, profitability, revenue and relationship growth
compared with the average customer.
• An actively disengaged customer represents
a 13% discount in terms of share of wallet,
profitability, revenue and relationship growth
compared with the average customer.
Source: Gallup. http://goo.gl/mdjf2A

head-to-head comparison, say, between starting the

DIRECTOR OF
PRODUCT FOR

is recommended in a head-to-head decision,”
Shlossman says.

The NFL chose to host the Player Comparison Tool in the
cloud for flexibility and stability. “Everything we build has

More experienced users can drill down for a more

to be best in class,” Shlossman says. “We get to very,

nuanced analysis of potential performance in the

very high load levels on Sundays and other peak

specific game—how each player performs in snow,

periods—thousands of requests per second on the

for example, or against a certain defensive back.

platform as people make last-minute changes to their
lineups. We had to build a tool that not only utilized all of

Rather than rely on one-size-fits-all rankings, users

this data but was also accessible and performed well at

can easily customize the tool by tweaking how much

the most crucial moment for fans, which is right before

weight to place on five different variables:

game time.”

performance, matchup, consistency, upside and
intangibles. If users decide they need a big week,

The NFL’s fantasy apps show how consumers as well as

they’ll turn up the volume on the upside and turn

businesses can reap the value of real-time analytics,

down the consistency dial.

opening up a whole new spectrum of consumer-grade
tools beyond fantasy sports. Just remember, Shah says,

“Users come in and add their own spice to it,”

to make the tools “immersive and fun. That’s what

Shlossman says. “They can adjust the sliders if they

attracts the fans and hopefully keeps them on our

want big points and get one result, or tweak it and get

platform for longer periods of time.”•

something else.” The league’s fantasy site also
features mixes of variables devised by each of the

Stephanie Overby is a freelance business and

NFL’s own fantasy experts, which managers can use

technology writer based in Boston.

at home.
This research project was funded by a grant from SAP.

3

Bloomberg Businessweek Research Services

Real-Time Enterprises

A Research Collection

Nomura Research Institute at a glance
Japan’s largest consulting and IT consulting firm
Industry: high tech
Business activities: Consulting, financial IT solutions,
industrial IT solutions, IT platform services
Established: April 1, 1965
Headquarters: Tokyo, Japan
Capital: 18.6 billion yen
2012 sales: 363.8 billion yen
Employees: 5,823 (NRI Group 7,738)
www.nri.co.jp/
Source: Nomura Research Institute

Page

79

RESEARCH UPDATE | Real-Time Enterprise Case Studies

Tokyo Drivers Avoid Traffic Jams with
NRI’s Big Data and Analytics
With in-memory computing and big data behind it, Japan’s popular Zenryoku Annai! application is
helping drivers get to their destinations faster and more efficiently—both day and night.
BY JOE MULLICH

T

okyo’s first taxicabs appeared a century ago. Now, about a quarter million of them service the
metropolitan area and beyond. For Nomura Research Institute (NRI), Japan’s largest consulting

and IT consulting firm, all these vehicles crisscrossing the nation represent a huge wealth of information

Nomura Research
Institute at a
Glance

and clues about how to break gridlock in one of the

} Business activities:
Consulting, financial IT
solutions, industrial IT
solutions, IT platform
services

NRI is analyzing traffic jams in Japan using multiple

} Established: April 1, 1965

the use of in-memory computing technology, which can

} Headquarters: Tokyo,
Japan
} Capital: 18.6 billion yen

process reams of different data types in real time for

world’s most densely populated countries.

sources, including traffic data from sensors around the
country and location data from 12,000 taxicabs. What
enables NRI to keep up with the massive data flow is

Traffic Data Jam in Japan
}C
 hallenge: 360 million data records of Japanese
traffic information needed to be analyzed more
quickly than the several minutes required by
traditional relational database technology.
} Solution: In-memory computing, which can
analyze large amounts of data quickly, was able
to process the 360 million records in just over
one second.

instant analysis.1
Japan can plot out the shortest travel routes, avoid traffic

} Sales: 363.8 billion yen
(fiscal 2012, ending
March 31, 2013)

Not too long ago, NRI relied on more traditional

snarls and estimate what time they will arrive at their

technologies. But the database component, in particular,

destinations.4

} Employees: 5,823 (NRI
Group 7,738)

became a stumbling block for this application. According

www.nri.co.jp/
Source: Nomura Research Institute

to Hiroshi Terada, NRI’s general manager for ERP

Zenryoku Annai! combines information from satellite

solutions, “An ordinary relational database took several

navigation systems linked to sensors at fixed locations

minutes to analyze the 360 million traffic records and we

along roads with traffic data determined through

had problems with real-time data processing.”2

statistical analysis on position and speed information
from subscribers, moving vehicles and even pedestrians.5

1. SAP. “NRI: HANA.” Customer
Testimonial Video. http://goo.gl/gat2AC
2. SAP. “NongFu Spring: Accelerating
performance with SAP HANA.” Customer
Testimonial. http://goo.gl/MAQgp1
3. Ashford, Warwick. “SAP highlights
customer experiences of in-memory
computing at Sapphire Now.”
ComputerWeekly.com, May 19, 2011.
http://goo.gl/gsGp5e
4. Pai, Suraj. “Guest Blog: How to
run an intelligent business.” CIO Asia,
September 14, 2012. http://goo.gl/btFQrt
5., 6. Intel. “Not limited to ERP
applications alone, the Intel® Xeon®
processor E7 family also provides new
business opportunities via in-memory
technology.” Case study, 2011.
http://goo.gl/6nZC9m

After NRI implemented in-memory computing technology,

Meanwhile, data from thousands of taxicabs is added

it was able to analyze the millions of records in just over

to the mix. Using all this information, Zenryoku Annai!

one second. “The speed this enables is sudden and

analyzes road conditions and helps drivers plan routes

significant, and has the potential to transform entire

more accurately and over a wider range than is possible

business models,” says Akihiko Nakamura, corporate

with conventional GPS systems.

senior vice president, Services and Industrial Solution
Division, at NRI.3

“As the number of users of our Zenryoku Annai! service
continues to grow, so too does the amount of position

New Business from Big Data

and speed data collected. Accordingly, we must now

NRI is a leading example of how to find huge benefits

process this data faster than ever before,” says Aritaka

from “big data,” the term given to data that comes in

Masuda, general manager of NRI’s Ubiqlink Department,

large volumes, variety and velocity. Thanks to big data,

which is responsible for gathering the traffic information.6

NRI has leveraged its research and traffic analysis
expertise to develop a widely used service called

Masuda says in-memory computing tests have confirmed

“Zenryoku Annai!.” Using this service, subscribers all over

that 360 million data points can be processed in just over

SEPTEMBER 2013 | © Copyright 2013. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

one second. The technology has improved search speed by
a factor of more than 1,800 over the department’s previous
relational database management system.

}T
 otal Cost: $121 billion
} Wasted Fuel: 2.9 billion gallons
}C
 O2 Emissions: 56 billion pounds

Besides the big boost in speed, NRI found that inmemory computing helps simplify the programming
needed to solve a complex analytical challenge and—

Tokyo at a Glance

somewhat counterintuitively—has even reduced the

}P
 opulation: 13.2
million (metropolitan
area)
} Number of taxicabs:
Approximately 250,000
(metropolitan area)
}N
 umber of cars:
Approximately 3.33
million
}T
 otal land area: 2,700
square miles

amount of processing power needed.

The Price of Traffic Congestion in the
United States in 2012

Source: Texas A&M Transportation Institute15

The NRI findings come at a time when many government
agencies and companies in Japan are exploring new

“In addition to making real-time processing possible, this

ways to leverage traffic data and other sources in an

approach simplifies traffic-data generation logic,” says

effort to improve quality of life issues. Toyota, which is the

Kenji Honda, an NRI senior systems analyst in the Ubiqlink

largest provider of taxis in Japan, recently announced it

Business Planning Group. He says the higher speed of

is using real-time traffic information from 700,000 Toyota

data extraction processing achievable with in-memory

vehicles on the country’s roads to offer what it calls a

computing means that historical data can be processed

“big data” service to local governments and businesses.

on a continuous basis. This, in turn, reduces the amount of

The service is aimed at helping drivers during disasters

computer resources required to perform calculations.

and emergencies. Drivers will be encouraged to share

7

their own observations on road conditions, including

A Better Quality of Life

blocked paths and strong winds, with other drivers

The ability to analyze traffic jams more quickly—and thus

around the country.12

to potentially alleviate issues faster—is crucial in nation’s
like Japan, which can be crippled by traffic congestion.

A recent report in The Japan Times notes the Japanese

During the country’s largest spring break, traffic jams can

Government also wants to use car navigation data to

stretch 37 miles or more.8

better monitor traffic after disasters.13 The Transport
Ministry found it was able to check conditions on only 79

7. Intel. “Not limited to ERP
applications alone, the Intel® Xeon®
processor E7 family also provides new
business opportunities via in-memory
technology.” Case study, 2011.
http://goo.gl/6nZC9m
8. Yamanaka, Megumi and Yuji Okada.
“Japan Braces for Record Traffic Jams
as Aso Cuts Highway Tolls.” Bloomberg,
April 27, 2009. http://goo.gl/9i93AX
9. Texas A&M Traffic Institute. “As Traffic
Jams Worsen, Commuters Allowing
Extra Time for Urgent Trips.” February 5,
2013. http://goo.gl/fyNEJL
10. Hotz, Robert Lee. “The Hidden
Toll of Traffic Jams.” The Wall Street
Journal,” November 6, 2011.
http://goo.gl/mOjIMK
11. Enterprise Innovation Editors. “Traffic
congestion top cause of employee
stress, declining productivity.” Enterprise
Innovation,” March 14, 2011.
http://goo.gl/mIDZYz
12. The Associated Press. “Toyota to try
out real-time traffic data service in Japan
next month.” CTV News, May 29, 2013.
http://goo.gl/TNbFe5
13. JIJI. “Government wants car
navigation data to monitor post-disaster
traffic.” The Japan Times, August 3,
2013. http://goo.gl/yRnbtU
14. Intel. “Not limited to ERP
applications alone, the Intel® Xeon®
processor E7 family also provides new
business opportunities via in-memory
technology.” Case study, 2011.
http://goo.gl/6nZC9m
15. Texas A&M Traffic Institute. “As
Traffic Jams Worsen, Commuters
Allowing Extra Time for Urgent Trips.”
February 5, 2013. http://goo.gl/fyNEJL

Traffic congestion also can and does have a significant

percent of the nation’s roadways on the night after the

impact on quality of life and the economy in many major

earthquake and tsunami ravaged the Tohoku region in

cities around the world. For example, a 2013 report from the

2011. Following the disaster, the ministry discovered that

Texas A&M Transportation Institute found that the financial

traffic data collected from car navigation systems clearly

cost of congestion in the United States in 2011 was $121

showed roads on which no vehicles were running. Being

billion, translating to $818 per U.S. commuter.

able to understand traffic conditions immediately, both

9

day and night, is a crucial aid in responding to a disaster.
The likely negative impact that traffic jams have on public
health is an even greater concern. As roadways choke on

All this demonstrates the growing need for—and benefits

traffic, researchers suspect that the tailpipe exhaust from

of—using big data in the public sector. “In the past, it

cars and trucks—already implicated in heart disease and

could easily have taken several hours to process large

cancer—may also injure brains cells and synapses key to

volumes of data, and for this reason, I suspect many of

memory.10 According to one analysis, drivers traveling the

our clients ultimately abandoned the process of data

10-worst U.S. traffic corridors annually spend an average

analysis” in the public sector, says NRI’s Masashi. “But in-

of 140 hours, or about the time spent in the office in a

memory computing may well provide a way to offer faster,

month. Meanwhile, a 2013 survey by workplace solutions

tailored solutions to them.”14 •

provider Regus suggests that traffic congestion and
crowded public transportation systems are the top
causes of stress and declining productivity among Hong
Kong employees.11

2

Bloomberg Businessweek Research Services

Joe Mullich is a freelance business and technology
writer based in Sherman Oaks, Calif.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Norwegian Cruise Line at a glance
Cruise ship operator that gives guests the freedom and
flexibility to create their own dining and entertainment
activities
Industry: travel & transportation
Headquarters: Miami, Florida
Founded: 1966
2013 revenues: $2.6 billion
Year-on-year growth: 12.9%
Initial public offering: January 2013
Number of cruise ships: 13, with four on order
Passengers carried in 2013: more than 1.6 million
Destinations visited in 2013: 114
www.ncl.com
Source: Norwegian Cruise Line

Page

82

RESEARCH UPDATE | Real-Time Business Case Studies

Norwegian Cruise Line Sets Its
Course for Real-Time Insights
Innovative cruise company adopts predictive analytics and real-time business capabilities,
with the aim of improving the guest experience and ensuring operational efficiency.
B Y L A U R E N G I B B O N S PA U L

N

orwegian Cruise Line has a reputation to uphold. Founded in 1966, the
$2.6 billion, 13-ship cruise line has a track record of innovation and

differentiation. The company was the first in the business to offer round-trip

Norwegian Cruise
Line at a Glance
Industry: Hospitality/travel
Headquarters: Miami
Founded: 1966
2013 revenues: $2.6 billion
Year-on-year growth: 12.9%
Initial public offering:
January 2013
Number of cruise ships:
13, with four on order
Passengers carried in 2013:
More than 1.6 million
Destinations visited in 2013:
114
www.ncl.com
Source: Norwegian Cruise Line

cruises out of Florida’s Port of Miami. It also

insights that have led to major operational cost

revolutionized the industry with its signature Freestyle

reductions. Over time, Norwegian’s real-time capabilities

Cruising, which gives guests the freedom and flexibility

will aid in its ability to quickly ascertain and even predict

to create their own dining and entertainment activities.

guests’ needs and desires.

No wonder, then, that an engaging and increasingly

“The real power of the tool comes in predicting the

personalized customer experience is paramount to

future and giving visibility we never had before,” says

Norwegian’s quest to keep up with industry trends and

Ben Lightfoot, director of business intelligence delivery

continue attracting the growing number of people

systems at Norwegian.

around the world who want to book a cruise in
anticipation of enjoying a one-of-a-kind vacation (see

Many companies in the hospitality/travel industry are

Figure 1, “Top 4 Cruise Industry Trends”). According to

leveraging analytics to gain a better understanding of

Cruise Lines International Association, the industry will

their customers’ needs and preferences. “This is what

serve 21.7 million passengers worldwide, up from 21.3

the innovators are doing,” says Joshua Greenbaum,

million in 2013 and 13.5 million in 2009.

principal at EA Consulting. “It’s a very competitive
environment. They are taking every piece of data they

But to maintain its track record for innovation, and

have and using it to change the customer experience.”

develop offers that will resonate with different segments
of customers, Norwegian knew it needed to better
understand who its customers are, what they value and

FIGURE 1

Top 4 Cruise Industry Trends

what they most want to do when onboard the ship.
With an eye toward increasing guest satisfaction,
among other goals, Norwegian embarked in 2012 on
a fast-moving journey to implement a business
intelligence (BI) system aimed at delivering insights to
business users. Because it wanted to analyze large
volumes of data from multiple sources—and needed
rapid results—Norwegian chose an in-memory
platform, which aggregates and analyzes vast
amounts of data from multiple data sources in real
time. From its earliest days, the system has generated

Improved technology to lower the cost of onboard
communications and provide more efficient passenger
servicing.
First-time passenger growth coming from younger
generation travelers, especially Millennials.
Rebound in luxury cruising, stimulated by an improving
economy and increased consumer confidence.
More all-inclusive options and packaging in
accommodations, services and amenities.
Source: Cruise Lines International Association. www.cruising.org

AUGUST 2014 |

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

Voyage to Customer Insight
According to Lightfoot, the homegrown BI system
had long turnaround times and performance issues,

FIGURE 2

Swimming Through the Data
Norwegian leverages its BI solution, powered
by in-memory computing, for a host of data
types in real time.

lacked flexibility and was too complex for anyone but

Norwegian Cruise
Line Business
Challenges

power users and IT staff to use effectively. There was
no true enterprisewide BI strategy in place and no
real processes around master data management.

} Legacy BI platform
was slow, inflexible and
complex
} Individual departments
could not easily share
data, leading to multiple
versions of the truth
} The company needed
a quicker and more
effective way to validate
and scrutinize financial
data in real time
} Norwegian wanted
to better understand
customer needs and
preferences to improve
and personalize the
customer experience

“We knew we needed a state-of-the-art BI platform
and strategy to stay ahead of the competition,”
Lightfoot says. “The business couldn’t wait until the
next day for an answer.” Further, departments
maintained siloed data marts, with no way to tie the
data together, adds Chad Berkshire, vice president of
operations finance at Norwegian. “There was no ‘one
version of the truth.’”
In late 2012, Norwegian began its quest for a platform
that offered performance, self-service for business users
and streamlined decision-making. “We knew this couldn’t

Financial data. Norwegian’s BI system elucidates
and authenticates the financial data in its ERP system,
something it was not able to do previously, according
to vice president of operations finance Chad Berkshire.
Now, business users can swim in the detailed transaction data behind the financials.
Inventory data. Norwegian uses analytics to keep
a closer eye on food/drink inventory aboard its cruise
ships, spotting trends and heading off waste. In the
future, it will use the system for inventory planning and
forecasting.
Guest data. Currently, Norwegian uses analytics to
segment and better understand its guests. In the near
future, it will use the system to predict which guests
and prospects are most likely to go on a cruise in the
near future.
Source: Norwegian Cruise Line

be a project that dragged itself out for the next three to
five years,” Lightfoot says. “The BI platform needed to

without any concerns around the data they were

produce results within a year. This platform would be a

consuming,” Lightfoot says.

Norwegian Cruise
Line Solutions

game-changer as to how users consumed and
performed data analytics. Changing our organizational

Financial Reality Check

} Adopting an analytics
system based on an
in-memory platform,
enabling real-time
analysis of a large variety
of data types
} Porting ERP data
to the in-memory
platform, followed by
property management,
reservations and
customer data
} Implementing data
cleansing, data
governance and master
data management
processes
} Establishing a business
department dedicated to
BI and analytics

culture around data needed to begin right away.”

The first use of the system was to provide a reality check
for financial data. “We needed to deliver the transactions

The team selected the system in June 2013, and

that made up the numbers in the ERP system,” Berkshire

implementation progressed quickly. The ERP system

says. The increased scrutiny was a natural part of

was the first data source to move onto the platform, with

Norwegian’s becoming a public entity in January 2013.

the property management and reservations systems

“We needed to talk to potential shareholders about

slated for future phases. Along with data cleansing, data

specific financial goals and performance,” he says.

governance and master data management, another
major change was the creation of a new corporate

With the system in place, Norwegian could begin to

department for BI delivery, headed by Lightfoot.

obtain the coveted “360-degree view” of its guests.
Under the legacy data warehouse, guest data was

2

“One of the other huge contributing factors to the

maintained in multiple data marts, and understanding

success of the implementation was the decision to

the correlation between pre- and post-spend was

create the BI department under the business

becoming increasingly difficult. Guest information was

umbrella,” he says. “This shift from the norm allowed

sourced from the reservations system, property

the BI department to align itself with the business,

management system, casino system and guest

immerse itself in the business culture and drive home

satisfaction. However, there was no way to bring all of

the necessary business requirements.” It also

this together without complexity. The new system is

ensured system usability at all levels of the enterprise.

changing that, giving everyone the same view of guests,

“I wanted users to have a true self-service platform

enabling them to provide a better customer experience

that would allow them to swim through their data

(see Figure 2, “Swimming Through the Data”).

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

Early Wins
Soon after the system went live Berkshire was able to

FIGURE 3

Better Decisions Through Data
Business drivers for investment in analytics
include the following. (% responding)

Benefits of
In-Memory
Computing at
Norwegian Cruise
Line

see how much money was spent annually on individual

} Operational cost
reductions as high as 6
percent
in purchasing
} Expected revenue
improvements driven
by improved ship
configuration and new
food and entertainment
packages
} Improved scrutiny and
validation of financial
data
} Improved inventory
planning and forecasting
} Holistic customer views,
leading to improved
segmentation and
prediction of needs

representative to reduce the bill by 6 percent.

Improving planning and forecasting


Purchasing was a fertile area for more hard returns as the

Developing new products, services and
revenue streams

47%

vendors across purchasing systems. “It turned out
there were five different departments all using one
vendor,” he says. “We had been negotiating in siloes,”
says Berkshire, whose team worked with the vendor’s

purchasing department obtained visibility across multiple
systems. “We discovered that a significant number of
services we were buying were not running through a

Improving the quality of decision-making

Making quicker decisions


59%

53%

47%

Source: IDG Enterprise Big Data Study, 2014. http://goo.gl/BNImWX

purchasing system. They were being negotiated without
purchasing being involved,” Berkshire says. Purchasing

For example, guests who meet a certain threshold of

has reestablished oversight of services purchases, driving

spending on the gaming systems will likely be passengers

additional cost reductions and greater efficiency.

who Norwegian would encourage to book another trip.
Lightfoot expects the system will help his team pinpoint

The system would also potentially highlight problematic

profitable customers and develop personalized offers (see

areas on the ships related to revenue. “We might

Figure 3, “Better Decisions Through Data”).

change the way the casino floor is laid out, or place
assets in different places as a result of looking at the

“They will be able to close the gap between someone

asset spend across the casino floor,” Lightfoot says.

who is interested in taking a cruise vs. someone who is
onboard enjoying themselves,” Greenbaum says. This is

The biggest impact for guests so far has been the

a major advantage in an industry where there are

creation of onboard food and entertainment packages

complex products, many customers and a lot of

based on common spending patterns. “We make it

competition. “There are 100 different cruises. Being able

convenient for them to buy it in one package while also

to take all these potential products and correlate them to

gaining savings,” Berkshire says.

customers based on data—that is the perfect scenario,”
he says. “You can move the needle very quickly.”

Another example of data-fueled innovation: Norwegian
recently introduced all-inclusive cruising, the first of the

Norwegian’s use of the system will increase over time, as will

major cruise lines to do so, according to USA Today.1

its associated benefits. “When we can begin to predict for

With this option, available for 2015 cruises, the guest

the future, the payoff will be huge,” Lightfoot says. “We are

pays one price for unlimited extras, including access to

now looking in the rearview mirror. The goal is to be able to

specialty restaurants and alcoholic beverages,

predict months in advance, so we can put together the right

shoreline excursions and bingo games.

offers, the right experiences for the right customers.”

Predicting the Future

So far, Norwegian’s journey has been smooth sailing, with

Currently, the crucial activity of customer segmentation

great things on the horizon. “A lot of hard work has gone

is handled by an external service provider. With the

into this,” Berkshire says, “but it has really paid off.” •

new solution in place, Norwegian will take that function
back in-house. “In this business, you have a fixed
number of customers based on the ships and number

1. Sloan, Gene. “Norwegian Cruise
Line tests all-inclusive packages.”
USA Today, July 31, 2014.
http://goo.gl/opYCzx.

of rooms,” Lightfoot says. “We really have to get the
best guests, so segmentation is really key for us.”

3

Bloomberg Businessweek Research Services

Lauren Gibbons Paul has written extensively on customer
relationship management and customer experience
management for more than 15 years.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

Southern California Edison at a glance
Southern California Edison is a subsidiary of Edison
International, which was founded in 1886. A regulated
utility, SCE delivers electricity to 4.9 million customer
accounts in 430+ cities and communities
Industry: utilities
Headquarters: Rosemead, California
Service territory: 50,000 square miles
Transmission and sub-transmission line miles:
12,782
Electricity wood poles: 1.3 million
2012 annual operating revenues: $11.9 billion
(Edison International)
Employees as of 2012: 16,593
(Edison International)
www.sce.com
Source: Southern California Edison

Page

86

RESEARCH UPDATE | Real-Time Business Case Studies

How Southern California Edison
Harnesses Big Data’s Power
Real-time capabilities are transforming how the electric utility manages supply and demand to
lower costs and improve efficiency.
BY STEPHANIE OVERBY

T

o keep up with electricity demand from its 14 million customers, Southern
California Edison (SCE) plans to invest more than $20.4 billion during the next

four years to expand and strengthen its electric grid. But pouring money into physical

Southern
California Edison
At a Glance
Industry: Electric utility
Company description:
Southern California
Edison is a subsidiary
of Edison International,
which was founded in
1886. A regulated utility,
SCE delivers electricity
to 4.9 million customer
accounts in 430+ cities
and communities.
Headquarters:
Rosemead, Calif.
Service territory:
50,000 square miles
Transmission and subtransmission line miles:
12,782
Electricity wood poles:
1.3 million
2012 annual operating
revenues: $11.9 billion
(Edison International)
Employees as of 2012:
16,593 (Edison
International)
www.sce.com
Source: Southern California Edison

MARCH 2014 |

infrastructure such as power plants and substations is not enough. Leaders at the
regulated utility need to manage energy supply and

FIGURE 1

demand more intelligently, using more data, better
analytics and faster reporting.
Many organizations, across all industries, have
similar ambitions. But for utilities, the transformation
to a real-time business—one that uses dynamic and
granular data to make decisions in the moment—is
in many ways an industry imperative. Theodore F.
Craver, Jr., chairman and CEO of SCE’s parent
company, Edison International, has stated that
preparing for transformative change in the industry
is critical to creating long-term value.
Not only is demand for electricity increasing, but
utilities are also under pressure from regulators and
consumers to reduce consumption and lower
costs. “The only way they can meet customer
expectations and shareholder demands is if they

Real-Time Data Bolsters
Performance

By integrating processes, information and technology,
companies deliver real-time benefits “to a very large extent.”

High performers

Other organizations

Improve the ability to analyze costs and benefits

7%

62%

Embed real-time decision-making tools

46%
2%
Develop and capitalize on insights about customer behavior

46%
3%
Provide access to information across devices

38%
6%
Source: Accenture, 2013

replace concrete with information,” says Narendra
Mulani, senior managing director at Accenture

Understanding Business Demands

Analytics (see Figure 1, “Real-Time Bolsters

SCE’s business data, like that of most large

Business Performance”).

companies, is scattered among various systems and
databases. Integrating it was time-consuming, which

SCE has responded to these demands by initiating

made analysis difficult. As a result, the utility was using

a business transformation. New technologies and

only a small portion of its data effectively. “If it takes a

analytics tools deliver instant information about

lot of time and effort to get information out of your

electricity generation and consumption to the

systems, it hampers your ability to make business

utility’s customers, regulators and employees.

decisions in a timely manner,” says Ron Grabyan,

Real-time data is helping SCE manage its

manager of business intelligence services at SCE.

multibillion dollar assets more effectively, while it

Oftentimes, by the time you get the data together, the

partners with customers to meet their needs.

opportunity is lost.”

© Copyright 2014. Bloomberg L.P. All rights reserved.

RESEARCH UPDATE | Real-Time Business Case Studies

FIGURE 2

these disparate data sources together more quickly,

The top five point to a critical alignment of
business strategy, people and tools. (% responding)

the business intelligence services group studied what
type of information, and how much of it, people
needed, as well as how they would use it, before

Benefits of RealTime Business at
Southern California
Edison

Identifying where big data can have the greatest impact

81%

choosing a technology platform.

Having staff who can extract value from big data initiatives

72%

Business users wanted to do deeper analysis of

Finding the best tools or resources to meet goals

70%

customer data, as well as predictive modeling. SCE
has access to an increasing volume and variety of

} Integrated data:
Business users can
aggregate internal and
external data sources to
unearth fresh insights.
} New services: A new
tool built on the
in-memory platform
helps customers
manage their electricity
usage and their costs.
} Faster processes:
Real-time data means
finance professionals
can, in effect, partially
close the books daily.
} Future use cases:
In-memory analytics
holds the potential to
improve response times
when power outages
occur and to help
analysts create new
statistical models with
richer results.

Big Data Success Factors

Although it was obvious that SCE needed to pull

internal and external data—from customer and smart
meter data to weather and traffic feeds and electricity
market information—that can streamline operations
and improve decision-making. By aggregating and
analyzing such information in real time, the utility can
begin to transform processes across its business. So
SCE invested in an in-memory platform for its

Ensuring needed storage, compute and networking resources
are in place

68%
Getting IT and business agreement on where big data can
have the greatest impact

64%
Source: IDG Enterprise Big Data Study, 2014. http://goo.gl/BNImWX

business intelligence systems.
The smart meter data became the foundation of an
“You have all of these different databases, and you

online tool that uses the in-memory platform to show

need information from all of them,” Grabyan notes.

customers what their bills might look like under various

“You’re limited by the speed of the slowest one.” An

usage scenarios.

in-memory platform enables users to load extremely
large volumes of data from multiple sources into one

SCE had to deliver the results, which are based on the

database and answer questions almost instantly.

previous year’s consumption, almost instantly, or
customers would abandon the exercise. “The customer

Choosing High-Value Targets

expectation is not set by the interaction they have with

The platform for real-time analytics is designed to

any other utility, it’s set by the interaction they have with

benefit many business functions. But successful

retailers or with online companies,” Mulani says. “They

companies choose targeted projects to demonstrate

expect that same transparency and ability to interact in

its value, Mulani says. According to a recent survey

real time.”

by IDG Enterprise Research, 81 percent of
respondents say that identifying the business areas

Using legacy systems, the data analysis took 40

and processes where the real-time collection and

seconds. Employing the new in-memory platform and

analysis of big data can have the greatest impact is

analytics technologies, customers get the analysis in five

critical or very important to the success of such

seconds. “With increased insight, more options and

initiatives1 (see Figure 2, “Top 5 Success Factors for

greater control over their energy usage, consumers will

Big Data Initiatives”).

help us engineer a better energy future,” stated Doug
Kim, SCE’s director of advanced technology, in a recent

With the launch of its smart meter program in 2008,

press release. If customers use energy more efficiently,

SCE enabled consumers and businesses to reduce

SCE does not have to build as many power plants.

their use of electricity during peak periods in

Everyone’s bills go down.

exchange for preferred pricing. The utility’s business
1. IDG Enterprise. “Big Data:
Growing Trends and Emerging
Opportunities.” 2014.
http://goo.gl/BKeOYy.

2

leaders decided that if they could get detailed

Transforming Work

information about electricity usage to consumers

Real-time transformation, however, involves more

faster, they could better moderate their energy use.

than deploying new technology or delivering a cool

Bloomberg Businessweek Research Services

RESEARCH UPDATE | Real-Time Business Case Studies

People Before Technology

new tool. “The business process has to be

FIGURE 3

changed,” Grabyan observes. “And you have to

Culture change is among the top barriers to
building the analytical capabilities needed to become a realtime enterprise. (% citing it as a barrier)

have the appetite to make that business process
change.” Although SCE’s executive team was
hungry for the transformation, others were less
eager to see their work change. Indeed, culture

Resources

Culture


55%

Southern
California Edison’s
Challenges

change is among the top barriers to building the

} Centralize data for better
and faster customer
service and predictive
analytics.
} Deliver instant analysis of
smart-meter data to help
customers manage their
consumption.
} Better manage capital
investments.

Before Technology”).

Talent/skills


The key is to make it clear to people how they will

Leadership


27%

Data


26%

Southern California
Edison’s Solutions

projects in half or close the books faster. Finance
professionals do not have to wait until the last

traffic patterns are and what it is going to take to get

} Deploy business
intelligence systems with
an in-memory database
to speed information
delivery to customers,
business users and
regulators.
} Develop flexible
customer data and
predictive analytics
models.
} Enable online access to
analytics to empower
consumers and business
users.

week of the month to perform all financial closing-

everyone where they need to go.

analytical capabilities needed to become a
real-time enterprise2 (see Figure 3, “People

personally benefit from new systems and
processes. The business intelligence services team
showed how real-time analytics and process
changes could enable employees to more easily
access information while on the phone with a
customer, cut the development time for new

Technology


49%

30%

21%

Source: American Management Association, 2013

related activities. They can spread that work
throughout the month—in effect, partially closing

There are, as well, opportunities to advance the

the books on a daily basis. Not every piece of

predictive analytics the utility has been doing for years,

business information needs to be delivered

not only to forecast outages, analyze usage patterns

instantly. But as hundreds of reports run faster, a

and costs, or model customer segmentation, but also

more efficient workforce emerges.

to create new statistical models. In the past, much of
the analysis, using legacy systems, was based on

Big Returns Take Time

samples from SCE’s millions of meters and customers.

Employee buy-in will be critical as SCE rolls out

That takes time, and it has not always delivered the

real-time capabilities to additional areas. With each

insight decision-makers wanted. With in-memory

potential use, there will inevitably be process change.

analytics, they will be able to use the full data sets and

That is where the real value is derived—and it takes

receive richer results.

time. Anyone who approaches real-time
transformation with a short-term outlook is destined

Ultimately, the real-time transformation will deliver new

to be disappointed, Grabyan advises. “You put the

ways of doing business that no one can imagine today.

systems in the first year, the process changes occur

“When you make changes like this, you speed up

over the following years.”

analytics, which speeds up processes, which speeds
up decision-making, which creates exponential

Take outage management. Like any utility provider,

change,” Grabyan says. “It will change the way we think

SCE has to deal with natural disasters, such as the

about operating the company.”•

2011 windstorm that left hundreds of thousands of
customers without power. The company is looking
2. American Management
Association. “Organization Culture,
Lack of Resources Impede ‘Big
Data.’” Oct. 3, 2013.
http://goo.gl/3NUXN8.

at putting its storm tracker program onto the
in-memory database to enable managers to see
where crews are, where equipment is, what the

3

Bloomberg Businessweek Research Services

Stephanie Overby is a freelance business and technology
writer based in Boston.
This research project was funded by a grant from SAP.

Real-Time Enterprises

A Research Collection

T-Mobile at a glance
Provides wireless PDAs, cellular telephones, tablets as
well as mobile communications, DSL
Industry: telecommunications
Headquarters: Bonn, Germany
Founded: 1990
Area served: Europe, United States, Puerto Rico, U.S.
Virgin Islands
Employees: 36,000 worldwide
www.telekom.com/home
Source: T-Mobile

Page

90

CASE STUDY

Technology

Small/Midsize
Business

Marketing
& Sales

Using Social Media to Improve
Customer Loyalty at T-Mobile
How a small
A
team within

Y28 K28 C78 M52 Y28 K6

C73 M19 Y40 K1

ccording to
a 2013 study1 by the
C61 M20 Y78 K3

FIGURE 1

University of Massachusetts Dartmouth

January 2013

C65 M29 Y79 K22

Center for Marketing Research, a stunning 77
T-Mobile uses
percent of the most successful U.S.
the simple act
companies use Twitter to communicate with
of listening to
while 70 percent use Facebook.
C0 M60 Y100 K17 C28 M88 Y70 K19 C48 M89customers,
Y84 K49 C61 M66 Y61 K52
turn unhappy
They use other social media tools in varying
customers
degrees. However, frequent usage doesn’t
into happy
necessarily lead to expected business results.
customers—
That’s because, according to experts, social
and happy
media success requires a new way of
customers
thinking about customers.
into recom“Companies are tuned toward delivering messages,
mendation
but that doesn’t work in social media channels,”
engines.
says social media consultant Paul Gillin. “Customers
BY H OWA R D
B A L DW I N

T-Mobile: Social Media Success
2.8 million

June 2013
3.7 million
December 2013
5.1 million
Source: T-Mobile

The company’s social media efforts have resonated with a
growing number of its customers.

T-Mobile today focuses on social media as a
competitive advantage, using it to listen and respond
to customers’ desires and concerns. It has to. With
mobile phone penetration at 78 percent of the U.S.
population in 2014 and leveling off,3 T-Mobile must
show how it is better to grow. Social media is one of
the key prongs in its strategy.

don’t go to social media sites to get advertising

A ROCKY START

messages.” The more a company tries to sell via

“When we first started doing social media in 2012, we

social media, the more likely the very people it’s

tripped all over ourselves,” recalls Michelle Mattson,

targeting will stop listening, he warns. “Get over the

senior manager, social customer support. “We didn’t

idea that you’re there to talk. You’re there to help.

have a business case for how to handle social properly.”

The more people you help, the more you get known
as someone who is a pleasure to do business with.”

The original team of 24 people—dubbed T-Force—
didn’t have a clear goal either, other than to try and

1. Barnes, Nora Ganim, Ava M.
Lescault and Stephanie Wright.
“2013 Fortune 500 Are Bullish
on Social Media.” University
of Massachusetts Dartmouth
Center for Marketing Research.
http://goo.gl/tzXPgg.
2. T-Mobile. “Awards and
Recognition.”
http://goo.gl/CWPfWp.
3. Statista. “Mobile phone
penetration in the U.S. from
2010 to 2016.”
http://goo.gl/ZurWud.

SEPTEMBER 2014
© Copyright 2014.
Forbes Insights.
All rights reserved.

That is, in essence, what wireless mobile carrier

reduce some negative comments on T-Mobile’s

T-Mobile is doing, with significant results. The

Facebook page and to explore the possible use of

number of its social media fans almost doubled

analytics. “We took big risks and learned our lessons

between the beginning of 2013 and the end (see

from them,” Mattson remembers. “That education

Figure 1, “T-Mobile: Social Media Success”).

got us to where we are today, but those first six

Socialbakers, the social media analytics site,

months were painful.”

consistently ranks T-Mobile as a “top 10 socially
devoted” company.2 The results are even more

Among those risks: When they first started tracking

impressive given that the program has been in

complaints, the system for customer sentiment

existence for only two years.

tracking was manual and time consuming.
Eventually T-Mobile started tracking customer
sentiment in a more automated way, using a
cloud-based system that integrated with its
FORBES INSIGHTS

1

FORBES
INSIGHTS
CASE STUDY

customer relationship management
system. But even that process was
difficult. As a result, Mattson’s team
tried several other products and
approaches before settling on the
cloud-based services it is using today

T-Mobile today
focuses on social
media as a
competitive
advantage, using
it to listen and
respond to
customers’
desires and
concerns.

to track everything from general
customer sentiment to reactions to

FIGURE 2

Upon Further Review

Step 1
Initial T-Mobile
action

Step 2
Social media
response

Step 3
T-Mobile
reaction

Step 4
Social media
response

T-Mobile
announces
elimination of
Advantage
discount program

7% positive
37% negative

T-Force quickly
communicates
negative feedback
to management;
CEO promises to
rethink decision

33% positive
5% negative

T-Mobile
announces
campaign to
promote switching
from Blackberry

5% positive
20% negative

After T-Force
notifies T-Mobile
executives, CEO
tweets that the
campaign will be
tweaked

20% positive
8% negative

new promotions and campaigns.
Mattson soon determined that her
group needed to articulate a clear
strategy. Out of those discussions
came a simple mantra: “We’re
listening, we’re engaging customers
where they want to engage, and we’re

Source: T-Mobile

Most announcements will trigger a negative reaction of 1 to 3 percent. These two
went far beyond that, but were saved by quick responses from T-Mobile.

resolving issues.” Tactically, Mattson
broke the goals down to four steps:

customer used the “comment” capability to say

• Identify trending issues and monitor customer

“Can’t make or receive calls!” Within 32 minutes,
one of Mattson’s team had posted a URL for the

sentiment.
•A
 llow the tough conversations to take place.

customer to send T-Force a message directly. The

• Offer quick responses in real time.

formerly disgruntled customer was one of 38,000

•M
 ake positive connections that deliver on the

users who “liked” the response.

brand promise.

GOING BEYOND THE BASICS
The sheer action of monitoring customer sentiment

Most telecommunications companies take

is an eye opener. “Typical negative reaction on every

advantage of social media to some degree. “They

campaign is 1 to 3 percent,” she says. But in two

use applications like Facebook and Twitter to

cases where T-Mobile launched a campaign or

communicate with consumers at a rudimentary

announced a service change to a popular offering,

level,” says Bas den Braber, principal consultant at

the negative response was off the chart (see Figure

Capgemini Consulting, who focuses on digital

2, “Upon Further Review”). In the first instance, it

customer experience in the telecom segment. “But

planned to discontinue what turned out to be a very

telcos that take social media seriously are the ones

popular discount program called Advantage. In the

who are making progress. They’re using social

second, T-Mobile tried promoting a program to get

media for marketing, to derive insights and as a

customers to switch from Blackberry phones. In both

real-time interaction channel to enhance brand

cases, the T-Force team was able to engage

engagement. They’re deploying predictive analytics

executive support to respond to social sentiment,

platforms to help make data-driven decisions

sometimes in as little as 24 hours.

across the organization. They’re integrating social
media with the customer service function.”

Dealing with negative sentiment is part of the job,
Mattson insists, noting that some of T-Mobile’s

T-Mobile’s efforts put the carrier into the category of

competitors simply delete negative postings. “We

leading practitioners of social media in its industry.

engage with those people, and in most cases, we

“We have sophisticated reporting that tells us what

can turn it around,” she says. In one instance,

our customers are saying about us and whether

T-Force posted a message on Facebook, and a

they’re happy or not,” Mattson says.

2

FORBES INSIGHTS

FORBES
INSIGHTS
CASE STUDY

For social media monitoring, the T-Force team is
using a listening tool that identifies when T-Mobile is
mentioned and highlights potentially negative
hashtags and keywords (for example, “hate” and
“never”). Sometimes the team’s efforts are made

“It gives us a
sense of pride to
work with
someone who is
super-negative,
and then have
that person
come back and
say how great
we are. That’s a
key element of
customer
service.”
—MICHELLE
MATTSON, SENIOR
MANAGER, SOCIAL
CUSTOMER SUPPORT,
T-MOBILE

more difficult when someone with a lot of followers
complains, and the complaints are retweeted. That
happened once with a DJ who was upset about

FIGURE 3

Chat Strategy Goes Social

Number of issues solved via chat

Up 12%

Wait times

Down 3 minutes

Overall handling time

Down 1 minute

Source: T-Mobile

When the T-Force social media team applied its methodologies
to customer service chat, management was impressed with
the results.

being dunned for a bill he said he’d paid; it turned
out later that he had not actually paid it.

we wanted to be when we grew up, and without a clear
vision or aspiration, you’ll just flail.”

No matter what level of status the person has,
however, the T-Force team dives in. “It gives us a

Her T-Mobile colleague Jennifer Palmer, director of

sense of pride to work with someone who is

knowledge management and social media services

super-negative, and then have that person come

support, recommends looking at what other companies

back and say how great we are. That’s a key element

are doing to get a sense of how you can best engage

of customer service,” Mattson says.

with your customers. “Look at brands you admire and
analyze why you like that,” Palmer says. “For instance,

Mattson has been so successful with T-Force’s efforts

the social content of [toilet tissue manufacturer]

that she’s been assigned responsibility for improving

Charmin is funny. Is that the way you want to engage

T-Mobile’s chat process. Her strategy involves giving

with customers? There’s nothing worse than boring

the chat team the same tools the social media team

content. And you have to commit to delivering it at

uses—setting up anticipated responses to questions

regular intervals.”

and building dashboards to track results.
Perhaps the most important lesson is to understand the
But it also involved making some structural changes.

complexity of making social media work. Just because the

“Sometimes we had content to be used within chat

T-Force team responds quickly doesn’t mean it is

that wasn’t appropriate for offshore agents who may

spontaneous. The team has spent a lot of time developing

not understand the nuances of social media,” Mattson

relationships with marketing, customer service, public

says. The solution: creating a two-tiered chat model

relations, legal and senior executives. “Before, marketing

that shifted complicated support issues to an onshore

would just launch campaigns, and the social team would

team. The results were almost immediately positive

respond to them. Now, we come up with questions and

(see Figure 3, “Chat Strategy Goes Social”).

issues relating to how customers might respond,”
Mattson says. “We have to be methodical. The last thing

The number one metric for Mattson, however, is
resolution. “That’s the most important thing to
measure in the long term. We want to earn customer
loyalty in the way we resolve issues across all
platforms.”

LESSONS LEARNED
What has T-Mobile learned about social media that
other companies could emulate? The most important
lesson is setting a goal for your social media efforts.
“Set your goal,” Mattson says. “We didn’t know what

we want is to become our own news story.” •

ABOUT FORBES INSIGHTS
Forbes Insights is the strategic research and thought leadership practice of Forbes Media, publisher of Forbes magazine and Forbes.com,
whose combined media properties reach nearly 50 million business
decision-makers worldwide on a monthly basis.
Bruce Rogers
CHIEF INSIGHTS OFFICER

Brian McLeod
DIRECTOR, NORTH AMERICA

Writer: Silicon Valley-based freelancer Howard Baldwin has written
about business and technology since 1987.

FORBES INSIGHTS

3

Real-Time Enterprises

A Research Collection

For more information on SAP HANA,
visit: sap.com/hana and saphana.com

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