Business intelligence systems have, for the most part, been dreary failures. But not in the restaurant industry. There, the payoffs have been significant. So what have you been doing wrong? And what are they doing right?
- Restaurant chains buck the trend and use business intelligence effectively
- How to use BI to troubleshoot problems and highlight opportunities
- Why BI systems are only as good as the data they rely on
It's been called "THE FAST FOOD EQUIVALENT of a snuff film" by one health and nutrition advocacy group. Jay Leno made cracks about it on The Tonight Show. Even The New York Times devoted an editorial to its excesses.
The Monster Thickburger, the latest piece de resistance from burger joint Hardee's, consists of:
» Two charbroiled 100 percent Angus beef patties, each weighing in at a third of a pound (150 grams)
» Three slices of processed cheese
» Four crispy strips of bacon
It's topped with a dollop of mayonnaise that oozes from a toasted buttery sesame seed bun.
The Monster Thickburger tips the scales at a whopping 1420 calories (5945 kilojoules) and an artery-clogging 107 grams of fat. It quite possibly is the most fattening mass-produced burger on the planet, and it's selling like gangbusters, according to Jeff Chasney, CIO and executive vice president of strategic planning at CKE Restaurants, the company that owns and operates Hardee's.
You'd think that CKE would have thought twice about rolling out such an over-the-top concoction in the midst of a national obsession with the growing epidemic of obesity in the US. But CKE was able to introduce the Monster Thickburger nation-wide on November 15, 2004, with such confidence (if not impudence) that the US public would receive it with open mouths because of the insights the company obtained from its business intelligence (BI) system. BI refers to a variety of software applications that analyze an organization's raw data and extract useful insights from it. BI as a discipline is made up of many related activities, including data mining, online analytical processing, querying and reporting.
CKE used its BI system, known ironically inside the company as CPR (CKE Performance Reporting), to monitor the performance of its big, bad burger in test markets. Specifically, CKE used BI to see if the hamburger was actually contributing to increases in sales at restaurants or if it was just cannibalizing sales of other, lesser burgers. The company wanted to evaluate whether the increases in sales from the burger were worth the cost to produce it. CKE used its BI software to study a variety of factors - such as menu mixes, the cost to produce a Monster Thickburger, average unit volumes for the Thickburger compared with other burgers, gross profits and total sales for each of the test stores, and the contribution that each menu item (including the Monster Thickburger) made to total sales. Because the Monster Thickburger exceeded expectations in test markets, the company decided to roll it out nation-wide and to devote around $US7 million in advertising to promoting it. CPR gave CKE the confidence it needed to introduce such a burger and to know that the advertising dollars behind it wouldn't be a waste.
And, in fact, it's been a resounding success; sales of the burger bomb continued to exceed expectations in December 2004. Sales at Hardee's stores that have been open at least a year were up 5.8 percent for December, and "the Monster Thickburger was directly responsible for a good deal of that increase", says Brad Haley, Hardee's executive vice president of marketing.
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