Chapter *4!RF@ Gase ll Managerial Supporf Systems Operational Business lntelligence lTelllgence Means Better I pizzaat papa Gino,s The Business Problem papa Gino's (www.papagi_ nos.com), the Dedham, Massachusetts, restaurant operato! generates massive amounts of data in its daily operations. The data include everything from statistics on how long it takes customers to receive pizza deliveries to how well restaurarts stack up against local competition. Until May 2007, busines managers gathered data via e_mail each day from a variety of sources. The proces was difticult and time consuming as district managers, who are qpically responsible for 8 to 12 restaurants, accumulated data and passed it on to regional vice presidents for further analysis. In mid-2007, papa Gino's was in the middle of zation. The goal was to improve the performance of its restaurants. The company wanted to more effectively leverage the large amounts ofdata being gathered in a vari_ ety of systems, including the J.D. Edwards enterprise resource-planning applications; internally developed, in_ store point-of-sale systems; and Excel spreadsheets. The overall business and many ofthe individual restaurants were performing satisfactorily when papa Gino's used the old process of data analysis. However, executives wanted to improve the process, save time, and tap into the wealth of information more effectively in order to generate additional improvements. The lT Solution To accomplish these goals, papa Gino's deployed operational business intelligence (BI) software. Operational business intelligence is the process ofusing business intelligence to drive and optimize busi_ ness operations and decision making on a daily basis or sometimes several times per day. The operational BI software at Papa Gino's placed reporting and analltics applications in the hands of business users who could analyze information to identifi strategies for working more efficiently and improving results. In all, some 100 managers at Papa Gino's use the BI application. Papa Gino's deployed the operational BI software in three phases. In the first phase, business users acquired the l[ 85 per lyzing reporting tools and the information they wanted. In the second phase, this.information was reduced to l0 to 20 there metrics deemed vital to the business. (Users had the option operd r to look at other metrics as needed.) Finally, in the third lrzg' phase, malagers used the technology to report and man_ age by exception. In other words, they examined key met_ efft is d rics for conditions that fell outside pre-established ranges. BI "ppl should which The Results Papa Gino's managers now receive data much more quickly. It is generally available to all key deci_ has ser sion makers in the organization by 6:30 every morning. deliver With the software, papa Ginot managers use a strategic five-year project to optimize its information tech_ nology systems and applications throughout the organi Papa dashboards to quickly analyze financial data, such as revenue, at individual restaurants by week, month, or year. They then compare the revenue data with similar data from the same restaurant in preyious periods, with revenue goals set by management, and with revenue at other restaurants in the same region or state. The system also reports and analyzes operational data_such as how many customers visit a restaurant during various times, what qpes of menu items customers are ordering, and how many hours employees are logging_so managers can see how each restaurant is performing. With the manage-by-exception strategy, decision makers look only at data that are outside certain thresholds or percentages-both in a positive and negative direction. For example, ifa restaurant's average total ofdaily guests falls below a certain threshold, managers are alerted to the anom- ln the same way, managers are made aware ofrestaurants that have a higher-than- expected number ofguests. a.ly Food delivery accounts for about one_third of Papa Gino's business, so a key statistic is percentages of on-time deliveries. Managers look at the delivery times promised to customers and analyze how well the restau_ rants are meeting that promise. Another major contributor to the business is phone-ahead orders, so other key statistics include how quickly order takers at restaurants answer the phone, how many calls are abandoned by customers, and how maly callers receive busy signals when they dial the restaurants. The co improt custom lnteractive Case: Developing managerial support systems for Ruby's Club Papa Gino's claims that the industry standard is to have Sorrcer: Compiled from 'CIO Values: paul Vdle, CIO, papa Gino's Pizzal' Informationweeh August 30,2008; B. Violino, 85 percent of calls answered within 12 seconds. By ana- "Operational BI: Digging l)eeper for Datal' CIO Insight, August 27, 2008j P Thibodeau, "How Business Intelligence Tools Can Help Improve Pizza Deliveryi' Cornputerworld, February 6, 2008; "G. Gruman, "Operational Business Intelligence Spot Problems Sooner: Clq November 7,2007j C. lyzing calling data, managers can determine whether there are enough people answering the phones. One of the tangible benefits of the BI rystem is that operations and filance managers now spend more time ana- llzing White, "The N€xt Geleration of Business lnt€lligence: data trends and less time collecting data. Another ben- Operational BI;' Information Management Magazine, May l, 2005; "Operational BI Comes ofAgel' Businessweek Spe, efit is that managers can use the forecasting capabilities ofthe BI application to get a cial Advedising Section. May tc,2OO5: u'wwpapagnos. better idea ofhow much product they on. accessed January 30, 2009. should order and how many workers they should schedule, which improves the overall efficiency ofoperations. As for performance improvements, papa Ginob has seen gains such as a higher percentage of on-time deliveries since it deployed the operational BI system. The company is using the system as a tool to refine and improve the restaurant experience and increase customer satisfaction. Questions l Describe the various benefits that Papa Gino! is seeing from its operational business intelligence system. 2. Discuss additional analyses that Papa Gino\ managers and analysts could run that would benet-it the company and its restaurants and provide competitive advantage. Developing managerial support systems for Ruby's Club ttllD'&l ' Go to the Ruby's Club link at the Student Companion web site or WileyPLUS for information about your current internship assignment. you will analyze and recommend managerial support systems to help the club,s managers better understand their monthly goals and how to achieve them.
