Case Study: Data warehouse empowers sales force

Veteran IT leader David R. Guzman wants his management to say, "Ah, got it!" And executives at Office Depot definitely did get it when Guzman and a team of his colleagues, in the first application of a new data warehouse, boosted annual sales by US$117 million.

Guzman, senior vice president for systems development at the time, says he was the "catalyst" for the project, which involved measuring sales clerks' and stores' success at cross-selling certain items, such as encouraging printer buyers to purchase a cable and paper.

The concept was pretty simple, but measuring the results for each of 60,000 employees in more than 1,000 stores called for data warehouse technology from the Teradata division of NCR, Guzman says. The warehouse spit out a key report that showed the percentage of cross-selling opportunities that were successful, broken out by employee and store.

The purpose of the report, in addition to providing measurements, was to tap into the natural competitiveness among Office Depot store personnel, Guzman says. "I knew it was successful when I went to a store in New York and found the . . . report on the wall of the employee break room."

"The visibility is what drove the stores' acceptance," says Gene Alvarez, an analyst at Meta Group. "Sometimes data warehousing can be ignored by the stores unless it provides direct metrics on how the store is performing."

With any major new IT endeavor, it's important to quickly spot and pick some low-hanging fruit, Guzman says. "With success comes freedom," he says. "Data warehouses are kind of an amorphous concept to the business leader. But if you can say, Do you remember that project we did with cross-selling opportunities?' Then they can say, Ah, got it.' "

The cross-selling project paved the way for Guzman and his team to tackle more difficult projects in customer relationship management, he says.

"This is an excellent example of the old keep-it-simple adage," Alvarez says. "It was very specific, very measurable and something that could be put in at a predictable cost."

Guzman is now CIO at Owens & Minor, a medical supplies distributor, and he says he is applying the systems and team-building skills learned at Office Depot in his new job. Owens & Minor is implementing the next generation of its data warehouse technology, Wisdom, by linking supply chain information with clinical information.

Guzman gives his colleagues equal credit for his accomplishments. At Office Depot, for example, he says the project couldn't have succeeded without leadership from the executive vice president for distribution, who brought discipline and focus; the marketing vice president, who provided sponsorship; and the executive vice president for stores, who enabled its execution.

Guzman says the Office Depot project taught him a key lesson in how to make an IT project successful: "Make it simple; make it fun; make it measurable; make it happen."

Office Depot

Location: Atlanta.

Project leader: David R. Guzman.

Business: Seller of office products, with 1,020 retail stores operating in 10 countries.

2001 sales: $11.2 billion.

Size of IT department: 300.

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