Lets build a smarter planet

Retail

Papa Ginos boosts sales

and customer loyalty
Using business analytics to maximize the profitability
of marketing campaigns and promotions

Smart is...
Leveraging business analytics to
optimize operations and enhance
promotions, generating increased
customer spend
Papa Ginos wanted to enhance agility
by moving away from cumbersome
spreadsheet-based analysis processes
and giving users a real-time view of
budgeting, financial and operational data.
The company also wanted to introduce a
customer loyalty program and increase
online sales. It saw business analytics as a
key tool for implementing these strategies
effectively.
The company used IBM Cognos
software to provide reports and
dashboards that give district managers
and senior executives rapid insight into
each of the companys 275+ restaurants
via a range of financial and operational
key performance indicators including
everything from budgets and labor costs
to pizza delivery times, coupon usage and
telephone response speed.

Based in Dedham, Massachusetts, Papa Ginos, Inc. is the parent

company of the Papa Ginos Pizzeria and DAngelo Grilled Sandwiches
restaurant chains. The company operates more than 275 companyowned and franchised Papa Ginos, DAngelo and dual-location
restaurants and employs more than 5,000 people across New England.
Both DAngelo and Papa Ginos are committed to providing highquality products, attentive service, clean, convenient, attractive
restaurants and a premium value experience for every guest.
To maintain competitive advantage and support business growth,
the Papa Ginos senior management team decided to rethink its
information technology strategy and invest in innovation. The
companys IT team was tasked with assessing the existing technology
landscape and identifying the areas where new systems and processes
could deliver the greatest business value.

Moving away from spreadsheets

At that time, we effectively had three main business systems: our
JD Edwards ERP system, our restaurant point-of-sale system and
Microsoft Excel, which we used very extensively, explains Martha
Lieber, Director of Business Systems at Papa Ginos. Basically, almost
everything that wasnt covered by the other two systems was managed
in spreadsheets, which meant we had numerous sources of truth across
the organization. For company-wide processes like budgeting, this was
a major problem, because it could take up to four months to consolidate
and validate data from all the different spreadsheets and complete the
process.
Paul Valle, CIO, adds: We knew that if we could create a single central
solution for business analytics, we could standardize and significantly
accelerate our planning and reporting processes. We also realized that
it would allow us to analyze operational performance in areas that
we had never previously been able to measure accurately such as
pizza delivery times and marketing campaign effectiveness. When we
presented our ideas to the board, they immediately agreed that this
should be the top priority in our IT transformation.

Lets build a smarter planet

Retail

From data collection to analysis

Business Benefits

Provides real-time analysis of previously unmeasured operational

metrics, helping Papa Ginos identify and encourage more profitable
customer behaviors.

Enables fine-tuning of marketing campaigns, promotions and loyalty

programs to maximize profitability, increasing the frequency of
customers visits by 33 percent.

Highlights the value of encouraging online ordering, which delivers a

40 to 70 percent boost to the size of customer orders.

Forecasts business volume by day, enabling optimization of staffing

levels.

Improves planning processes by gaining efficiencies and adding depth

and accuracy.

Replaces repetitive, manual, spreadsheet-based reporting processes

with auto-updated online reports, allowing financial analysts to
focus their efforts on analysis rather than data collection and report
generation.

Building a partnership
In partnership with QueBIT, an IBM Premier Business
Partner, the IT team deployed a suite of IBM Cognos
software including IBM Cognos Business Intelligence, IBM
Cognos Planning and IBM Cognos Finance.
QueBIT is a great partner for our organization, and the
QueBIT consultants have done a terrific job throughout
all the projects we have worked on with them, comments
Martha Lieber. By working closely with us, they have not
only given our in-house team a lot of very valuable insight
into the Cognos solutions; they have also gained a great
understanding of how our business works. As a result,
they have definitely become our go-to partner for business
analytics projects.

Smarter Retail

The first priority for the Papa Ginos and QueBIT team was
to integrate the IBM Cognos solutions with the ERP and
point-of-sale systems, migrate data from existing spreadsheets,
and create the new standard financial reports and budgeting
process. Next, the team embarked on a series of projects to
monitor operational metrics and provide data to different
groups of business users in near real time.
The main objective is to turn people from data gatherers
into analysts not just at corporate level, but all the way down
into the field, says Martha Lieber. For example, we have
district managers who are responsible for all the restaurants in
their territory. Previously, they had to spend hours each day
pulling together all the information they needed to manage
their restaurants: now, they get a simple, one-page report
every morning that tells them everything they need to know.
Beyond that report, weve really focused on managing by
exception, so online reports highlight the parameters that
are outside of the normal range. Instead of looking at 50 data
points for every single restaurant to find out what is going on,
they can see the problems immediately and focus on solving
them.

Optimizing labor costs

One of the first projects was to optimize labor costs by using
IBM Cognos Enterprise Planning to provide trend analysis
based on current and historical sales data. The solution
compares recent weeks sales figures with previous years
figures to provide a two-week forecast of probable staffing
requirements, helping managers ensure that each restaurant
has the right number of staff to provide excellent customer
service at all times, while managing cost levels.
The ability to predict staffing requirements and to make this
data available to executives and district managers in real time

Using analytics to maximize profitability

Instrumented

Collects data covering multiple operational activities from more

than 275 restaurant locations.

Interconnected

Integrates data from enterprise resource planning and point-ofsale systems with locally managed spreadsheets, creating a central
data warehouse.

Intelligent

Delivers key information and trends that help control and lower
top operational expenses by allowing decision-makers to spend 80
percent of data examination time on analysis.

Lets build a smarter planet

Solution Components
Software
IBM Cognos Business Intelligence
IBM Cognos Planning
IBM Cognos Finance

IBM Business Partner

QueBIT

Thanks to Cognos, we have found that

customers who are members of the loyalty
program order from us about 33 percent
more frequently than those who havent
joined yet. So this insight has led to a real
drive to encourage customers to sign up.
Paul Valle, CIO, Papa Ginos

helps to identify problems quickly and nip them in the bud,

explains Paul Valle. For example, we had a situation in one of
our restaurants where we saw sales increasing significantly, but
the labor costs were decreasing. We immediately investigated
this incongruity, and found that there were some errors that
needed to be corrected. Previously, we probably wouldnt have
spotted the problem until much later; the effect on sales and
customer service might have been significant.

Better customer service

A second project was to start measuring order management
performance using metrics such as the average time taken to
deliver orders to customers homes compared to the estimated
time.

Retail

We do a lot of email, SMS and postal marketing where

we send coupons to our customers with special deals and
offers, explains Paul Valle. With Cognos, we can track
which coupons are actually being used, so we can see which
kinds of deal are most attractive to customers and create the
most sales. We recently created a loyalty program for regular
customers which provides rewards that can be used on future
orders and, thanks to Cognos, we have been able to track
its effect on sales. What weve found is that customers who
are members of the loyalty program order from us about 33
percent more frequently than those who havent joined yet. So
this insight has led to a real drive to encourage customers to
sign up.
Martha Lieber adds: Similarly, we can now compare the
sales figures for orders that are placed online with those that
are placed by phone or other channels. We are seeing that,
depending on seasonal changes, online orders are between
40 and 70 percent larger so, again, it is now our strategy
to promote our online service and make it our customers
preferred channel.
Since it is easy to track customer behavior via the Cognos
solution, the Papa Ginos marketing team can create
numerous nuanced versions of each campaign or promotion,
and then compare the results. As a consequence, the company
is able to constantly fine-tune its marketing effort and focus
on the campaigns and deals that deliver the highest returns.

Streamlining the budgeting process

A further area where the introduction of IBM Cognos
solutions has improved operations for Papa Ginos is in
financial planning. The companys budgeting process, which
previously required the planning team to gather data from
across the business in spreadsheets and manually check and
collate it, is now substantially simplified and improved.

The insight we obtained from measuring delivery times in

Cognos was really an eye-opener, comments Martha Lieber.
We found that, on average, we were promising to deliver
pizzas within 45 minutes, but we were actually delivering
them in less than 30 minutes. As a result, we started to adjust
the promise time to reflect reality setting our customers
expectations more accurately and potentially avoiding lost
orders.

While the duration of the plan process has stayed consistent,

what has changed is our capability to process scenarios and/
or adjustments that flow through to other aspects of the plan,
comments Paul Valle. It is estimated that our efficiency has
improved by 25 percent, enabling us to take deeper dives
into the key drivers of plan results and improving overall
plan quality. Automating time-consuming spreadsheetbased processes has increased accuracy as well as stakeholder
confidence in the plan as a whole.

More effective marketing

Social media and mobile applications

The third major area where the Cognos analytics solution

is helping to optimize operations is in marketing and
promotions management.

We see social media playing a significant role in the future of

the restaurant business, so were currently active on Facebook

and Twitter, and were working on projects with Foursquare, Yelp,

Groupon and a dozen other social media sites, comments Paul Valle.
Were also due to launch apps for the iPhone, BlackBerry and Android
mobile platforms. The great thing about the Cognos solution is that
well be able to use our existing solution to monitor the performance
of these new channels too, so we can continue to optimize our sales
performance and focus on the most productive areas.
Martha Lieber concludes: For the future, were looking at upgrading
to the latest version of Cognos and providing better mobile access
for our district managers perhaps via iPads or Android tablets. This
will help them work more effectively when they are visiting their
restaurants and really do a show and tell with their team members to
highlight areas where operational performance can be improved. These
types of initiatives, powered by IBM Cognos technologies, will help us
maintain our position as an innovator and stay ahead of our rivals in a
highly competitive marketplace.

About IBM Business Analytics

IBM Business Analytics software delivers actionable insights decisionmakers need to achieve better business performance. IBM offers a
comprehensive, unified portfolio of business intelligence, predictive and
advanced analytics, financial performance and strategy management,
governance, risk and compliance and analytic applications.
With IBM software, companies can spot trends, patterns and
anomalies, compare what if scenarios, predict potential threats
and opportunities, identify and manage key business risks and plan,
budget and forecast resources. With these deep analytic capabilities
our customers around the world can better understand, anticipate and
shape business outcomes.

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