Information Supply Chain, What It Is And Why You Need To Start Talking About It

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky's and Moe's Southwestern Grill).

Make no mistake, the number-one challenge IT teams will be faced with over the next five years is helping their business partners extract meaningful information from the yottabytes of data being shoved into their archives. And when I use the term "meaningful information," I define it as information used to create action.

We are at the dawn of an age where great companies will figure out how to successfully combine operational, marketing, customer service and social media data sources into systems and tools that enable the business. These firms need to clearly define their Information Supply Chain. Companies that don't figure it out will be left out in the cold.

Take Starbucks, which has just added its ten-millionth fan on Facebook. This stat is making marketers everywhere drool with envy. I can't help but wonder if this stat is just a cool big number or if it is part of an integrated "customer relationship management" strategy.

Is each one of those fans in coffee retailer's CRM system? Is the company able to track the purchases of each of its fans? Can it easily correlate the impact of poor store operations to customer sentiment? Does Starbucks market specific offers to customers based on their social graph (giving better deals to those who are highly connected versus those who are not)? Has the company assigned a value/score to each customer that helps guide its marketing efforts?

Does Starbucks know if a Facebook user is worth more than a Twitter follower or a 4-Square Mayor? Can it Tweet out specific, location-based in-the-moment offers on items that are overstocked or about to go bad (a 2010 version of the manager's special)? Can the company tie the pages that people surfed on the newly free WiFi service back to their purchases?

If Starbucks can't answer all these questions today (and I'm not sure it can), I would be willing to bet it will be able to answer most of them within five years. I used Starbucks as an example simply because of its recent Facebook milestone. But, really, these points apply to any retailer.

While a lot of people are talking about tokenization solutions as a way to protect cardholder data, no one seems to be talking about what a huge breakthrough tracking information about customers for marketing purposes would be. By implementing tokenization (or at least certain flavors of tokenization), marketers can now track purchase behaviors in a way that has been taboo until now. It is an absolute gold mine, if you can manage the data.Companies are starting to dip their toes into an "Integrated Information Supply Chain." But I am not currently aware of anyone doing it on a massive scale. Why aren't companies moving faster? How do you take billions of retail transactions, millions of billions of social media interactions, millions of marketing impressions and hundreds of thousands of operational statistics and merge them into a set of tools that provide the right people with the information required to maximize their impact on the business? That is the million dollar question.

Today, companies will normally implement functional applications that service some form of business process within the enterprise. These tools will often create a large amount of data that is valuable to someone outside of that functional area. An example is the sales transaction data that is a by-product of ringing sales. Operations, Marketing and Finance often live off of that data. In the future, the success or failure of companies to leverage this data will be largely driven by the planning they put into their Information Supply Chain.

Great companies need to design, build and manage how data will be consumed within their organization and then structure everything else around that. IT teams need to start thinking about the data first and then think about the process/workflows. The questions will be: "What other roles in the company will need the data that is entered into, or created by, this application? How can we get them this information in a meaningful way?"

For the past few months I have devoted a significant amount of my time to designing a holistic information architecture and Information Supply Chain for FOCUS Brands. Even in a midsize company like FOCUS Brands, this task has proven to be extremely difficult. It basically means we are defining each data element within the organization, who owns it (systems and/or persons), who needs it (systems and/or persons) and how change will be managed. Once we have that aspect completed, the next challenge will be in designing systems and processes to enable that information architecture.

My biggest realization in this process is that information will become far less "native" to specific applications and more "shared" across the enterprise. The name of the game is publishing data to the enterprise bus that is then consumed by other systems that subscribe to those updates. Data typically confined to a functional application will be extracted into a separate system to better facilitate data sharing.

It also means that application projects will significantly increase in scope. Instead of evaluating an application against its ability to meet the business and functional requirements, technical requirements (such as information architecture) will start to take center stage in product evaluations. "I understand that your application can meet our supply chain needs, but do you integrate with BizTalk for third-party data storage and access?" This should be fun.

The other big challenge will be in designing an information architecture that allows the data to be extracted as the business needs it. How many different data sources are needed to pull in the list of Facebook fans who visit at least once a week, respond well to E-mail coupons and live within three miles of the location that has to move five cases of chicken by Friday? Is it even possible to design a system where that report can be run in a reasonable period of time? Oh yeah, and can it support franchisee self-service to run a report for just their locations?

By the way, here's my Term Of The Week: "Ridin' Dirty"--IT slang for a location that is not PCI compliant. "That restaurant is ridin' dirty."

What do you think? Leave a comment, or E-mail me at [email protected]. You can also follow me on Twitter: @todd_michaud.

Want to follow my Ironman Training progress? Read more at www.irongeek.me.

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.