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Strategy and Transformation

CGT Conference: Insights into Starbucks’ Journey

In a special session at the CGT Business and Technology Conference, Starbucks representatives shared how the company is creating transparent connections between trade and customer management systems and processes. Starbucks is also integrating IT in a transparent process to make sure it is meeting business needs, even when those needs change in the middle of a project. In doing so, Starbucks is now able to look at more customers holistically with a 360-degree view for deeper analysis and “what if” scenarios.
Speakers included Mike Gamage, Director, Pricing & Trade Fund Promotion, and Colleen Mandell, Director of IT – Channel Development Solutions / Global Technology.
The following are notes from the session:
Starbucks started in 1971. It’s where premium coffee started.

  • Started a food service business in 1982
  • Added Packaged coffee in the US in 1999 via a third party
  • 2009, added Via as a premium instant coffee
    • Decided to go out on their own and sell directly themselves
  • 2011, CPG moves to direct sales
  • 2012 launched K-cups
  • 2012 bought Evolution Fresh, La Boulange Bakery, and Teavana
  • 2012-2013 launched Verismo system within the specialty channel

To support this explosive growth, Starbucks had to start getting all the brands and connect with the customers.
Where do you start? By connecting with the consumer.

  1. The first place is the home.
  2. The second place is the foodservice. Starbucks went directly to operators and not distributors.
  3. Retail and licensed store. The Starbucks in the MCO airport is a licensed store. Still need to gather data from them
  4. Digital and Virtual
    1. 62 M facebook fans
    2. 2M twitter followers
    3. 250 M loyalty card
    4. Want to interact with them

Stats:

  • 69,000 US grocery stores
  • 6,000 food service operations
  • 11,000 licensed storeds
  • 86,000 potential data integration points
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That’s a lot of data. In 2011, Starbucks had an idea but not a system in which they could harness the data. The integration isn’t all that simple.
Each channel has it’s own system for retail, license, OCS, Foodservice, and CPG. The salespeople are pulling all the data from each system. It’s hard for them to decipher the data. It’s not realistic to integrate all the data. Starbucks wanted to take the burden off the salespeople.
Where they were:

  • Multiple systems platorms
  • Non-integrated systems
  • individual reporting models
  • fuzzy future visions

Where they are going:

  • Single platform
  • Building integrations
  • Organizational reporting
  • Vision for tomorrow’s challenges

Goal is to build a single platform by starting with a single ERP, TPM, And CRM systems. This doesn’t mean you get rid of the multiple POS systems and other tools.
Today:

  • Single System Platform
  • Building Integrations
  • Organizational reporting
    • Have to provide data but need to have to report downstream and upstream. don’t stop at sales for what data all the constituencies need
    • So a lot of work going on here
    • Showed a graphic with a lot of green dots (needs are met) and red dots (unmet reporting needs)
    • You have to pull all the data in one single platform

Reporting success comes:

  1. You must integrate systems for data.
  2. Create an enterprise reporting roadmap
    1. It’s critical to align the organization on what to do first
  3. Single reporting platform
    1. Started well with getting all the data in ERP, TPM, and CRM but had a lot of different reporting mechanisms
    2. Give the people one place to go where they can get the data
  4. Aligning process, language, and metrics
    1. everyone wants to look at different metrics. You have to accept that it’s a fact. Retail will have different metric needs than CPG, etc.
    2. But can still define common metrics in those areas
  5. 360 degree view of a customer matters
    1. Safeway may be a customer in foodservices, licensed stores, CPG, and Retail partners
    2. Need to get data across all the channels
    3. Not quite there but working on it

The plan: Build and extend a single platform.  They stared with Trade and Promotion Management (TPM).  CRM came next.  Starbucks is working on the CRM reporting right now.  It’s been a three year journey to get to the point where they have the functionality available.
TPO is next.
By building slow and methodical, we have learned a ton,” speakers say. “By being able to work on TPM first, we made mistakes and learned from them.”
Technologies:

  • Oracle CRM
  • OBIEE
  • Tableau – migrating all reporting because it can scale and it’s easier to use for the end users

Key learning: This is not just a technology challenge.  They needed to bring in governance with organizational change management (OCM). OCM began early.
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Michael Porter

Mike Porter leads the Strategic Advisors team for Perficient. He has more than 21 years of experience helping organizations with technology and digital transformation, specifically around solving business problems related to CRM and data.

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