Getting IT Out of the Loop
Office Depot needed to massage sales data for employee bonuses, with minimal IT involvement.
Less ongoing IT involvement means greater overall success, at least when it comes to business intelligence. That's what Linda Belanger, senior manager for decision support for the contract sales division of $11.2 billion Office Depot Inc. in Delray Beach, Fla., discovered when she started a project to monitor and reward sales employees' performance.
Her division, which works with Office Depot's larger customers and businesses, has 1,100 salespeople selling everything from paper clips to furniture to custodial cleaning products, through telephone, EDI (Electronic Data Exchange) and Internet orders.
"My job is to keep track of all those sales by a sales rep, because one of my main goals is to pay their quarterly bonuses," says Belanger. Belanger adopted business intelligence software from MicroStrategy Inc. (McLean, Va.) to monitor salespeople's sales and bonuses and help analyze her company's incentive plans because collecting and analyzing data had been an onerous task. It took a lot of time to collect data, run reports, then get the paper printouts of the reports and sort them. Belanger's staff spent a great deal of that time in administering the system.
Worse was the data mining system's inflexibility, which made it tough to set incentive plans for workers or to generate new reports. "We had a joke that it would take over a year to make a change to the paper report, and by the time you got the change done, you didn't need the report anymore," says Belanger. It wasn't all that funny, though; every report had to be programmed into the AS/400, and programming talent and availability inside the company was scarcehence the backlog.
Belanger knew there had to be an alternative, and set about replacing its then-current software, Hyperion Solutions Corp.'s Essbase. "We had major problems with that in that it didn't handle our customer data," she says. Simple report generation and load balancing also proved difficult.
The goal was to find something that required minimal IT involvement, so Belanger and her staff could write reports as needed. But the tool needed to be easy for analysts with little IT experience to learn. She presented a list of needs and wants to the IT department, which chose MicroStrategy Agent and MicroStrategy Web. The new tools were rolled out in early 2000, and Belanger happily got up to speed quickly.
It took about three months to get data finalized, and over the course of 2000, Belanger and her staff began seeing immediate improvements. Prior to the MicroStrategy tools, Belanger says that four or five "huge boxes of paper" would be delivered to her office every month containing sales reports. "For three or four days I'd put four analysts out there sorting paper reports, and mail them to the sales people," she says. In addition, the reports were static and the templates hard to change. She could gather data from the AS/400 and put it into Microsoft Access, but says that getting "a high level view of the data was impossible."
One sticking point remained: Even if the company finished the automation by putting reports online, the sales force probably wouldn't make much use of them. "Half of them didn't even know how to use a computer, how to go on the Internet and get the reports themselves," she says.
Office Depot solved that problem in 2001, issuing laptops to all salespeople as part of Office Depot's sales force automation software adoption. That enabled Belanger to kick things up a notch and make the MicroStrategy reports available online.
Before, Belanger's department strained to produce six accurate reports. Now they easily produce 250 reports that salespeople, their managers and executives are able to run, including reports with "the critical indicators, showing every single day what their sales numbers aree-commerce numbers, furniture percentage, and their profits for the day," she says.
Office Depot salespeople now head online to get their reports as needed, or can have important ones sent directly to them. Belanger says that there are roughly 460 unique Web users every day, about one-third of the total number of users, which includes not only the 1,100 salespeople, but also sales support and various corporate types. On a monthly basis, 17,500 reports are run, and 9.5 million rows of data are returned.
Initially, IT experienced some installation pains. "The MicroStrategy tool is a little more complex on the back-end," she says, and IT also had to create testing areas on a Web site for the various reports. But since it's been set up, Belanger needs minimal IT involvement to keep it running, which suits her fine.
Thanks to the new reporting capabilities, Office Depot executives are able to do moreand betterstrategic planning. "Our profit margin has increased tremendously from using this tool," says Belanger, though she's not allowed to give exact figures. "We've just become much more intuitive with all of our data, and we're reacting before things happen, instead of after they happen."
By centralizing data, Belanger now has a single version of the sales figures, which reduces analysts' time and saves money. "In terms of inaccurate payments being paid to our salespeople, we probably saved at least a couple hundred thousand dollars," she says.
Turnover among salespeople has plummeted, Belanger says, partially from the immediate report feedbackand the fact that bonuses get paid not in two months, but 35 days. "My goal for this year is to make it to 25 days," says Belanger, but that involves further integration with other systems.
Other goals, she says, are to upgrade to MicroStrategy Business Intelligence Platform 7, and to develop profit and loss reports for every customer. In addition, she hopes to identify customers who make lots of smaller orders and offer incentives to them to make fewer, larger orders, which saves Office Depot money.
There's a footnote for followers of MicroStrategy, which has been a pioneer in creating and evangelizing advanced business intelligence software, according to Michael Schiff, an analyst with Current Analysis Inc. in Sterling, Va. The company came upon tough times in early 2000 when it re-stated lower earnings for three years. "It hurt their credibility and hurt them on Wall Street," says Schiff. "The fact of the matter was it didn't affect their technology; the technology was always solid, still is," he says. "In general, they have continued to improve and evolve their products, including scalability."
Details: Office Depot Inc.
Team leader: Linda Belanger, the senior manager for decision support for the contract sales division
Organization: Office Depot Inc.
Location: DelRay Beach, Fla.
Web Site: www.officedepot.com
Goal: Track sales and issue bonuses to sales force in a more rapid, standardized manner.
Scope: Covered 1,300 people in the contracts sales division, including 1,100 salespeople, managers, support personnel and executives.
Platform: Teradata data warehouse
MicroStrategy Agent: for corporate analysts to create sales and bonus reports.
MicroStrategy Web: for sales force to access sales reports online.
Office Depot plans to upgrade to MicroStrategy Business Intelligence Platform 7.
Future Challenges: Re-installing Unicenter to integrate it with Somix application.
Bonuses now issued in 35 days, vs. 2 months.
Much lower salesperson turnover.
Daily, about 460 people access reports (about one-third of the 1,100 who have access).
Monthly, 17,500 reports are run, and 9.5 million rows of data are returned.
Office Depot was able to create a single, standardized view of all sales figures, eliminating the need for eight analysts to go into the field quarterly and research numbers, which were subjective and sometimes inaccurate.
Standardized numbers mean more accurate bonus payments, with savings estimated in the hundreds of thousands of dollars.
Indirect savings from salespeople, managers and executives having self-service access to Web-based reports, providing timely information on sales goal realization and salespeople incentive-plan effectiveness.
Lessons Learned: Takes time to get data ready for analysis; product markedly more complex on back-end than front-end.
Evaluation Requirements: Data analysts needed to be able to create reports themselves; overall minimal IT involvement desired.