Sysco Case Analysis

SYSCO case

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Introduction:

* SYSCO - largest food distributor in NA; Headquartered in Houston; procured and distributed food and food related products and services to restaurants, health-care and educational facilities, lodging establishments and other orgs in the US and Canada; 420000 customers, 8000 marketing associates, 9000 delivery associates, 45000 employees.

* SYSCO decided to purchase business intelligence (BI) software, a technology intended to provide superior monitoring and analysis capabilities and help serve its customers better; Deployment of BI and starting the operations would begin in another six months

* SYSCO had decentralized business, with over 100 operating units, substantially autonomous - though same core application, same customers, but different data captured and parsed and interpreted - therefore slow report generation across multiple operating units. Issues of data redundancy and data integrity have arisen due to the decentralized operational structure of the company. The IT initiatives in this regard have been: i. ERP development and deployment, ii. Data warehousing effort.

* Business intelligence software aimed to give users access to the data that was most important to them, without forcing them to write complex queries- gave features like dashboard, extraction, data mining, etc. Business Objects was the leading vendor- would provide maintenance and support as well

* Twila Day, assistant vice president of technology and applications, is in charge of the BI project and must determine exactly how much software to buy through - Bare bones, Middle of the Road, or Volume Discount.

Question for Twila Day: head of Technology and Applications group in SYSCO:

Which software modules in BI would they need license for, which will give them the most optimum choice of requirement-fulfilling and cost.

Analysis: SYSCO has 3 approaches under consideration-the bare bones approach, the middle of the road approach and the volume discount approach. The cost spread between the approaches is approximately 1 Million dollars.

1. Adopt the bare bones approach.

Pros: This will minimize upfront investment and will enable SYSCO to learn before committing to additional software. The centralization of data analytic functions is a relatively unknown territory for SYSCO. It would be ideal, in such a scenario to restrict access to the data, which is facilitated by the bare bones approach. It also minimizes training expenses.

Cons: The bare bones approach will not allow licensing of the customer intelligence analytical module. Recreating the calculations built into the model is a time consuming process and may ultimately result in an increase in developmental costs.

2. Adopt the middle of the road approach.

Pros: This will enable licensing of the customer intelligence analytical model and more licenses than the bare bones approach.

Cons: The cost difference between this approach and the volume discount approach is not significant. The volume discount approach, on the other hand, gives an additional supply chain module. The customer analytical module on its own will not give an accurate predictive analysis. Accurate analysis will need cross value chain information.

3. Adopt the Volume discount approach.

Pros: This approach is the best from an overall cost perspective as well as an adoption perspective. Business Objects is bound to give a discount on licenses purchased if SYSCO buys everything up front. A larger group of people will be able to view business intelligence data .Moreover, this approach gives SYSCO the opportunity to use the supply chain module along with the customer intelligence analytical module.

Cons: Totally embedding Business Object's BI architecture and implementation will be detrimental in a fluid and developing knowledge area. Business Object's proprietary semantic layer, while groundbreaking, may not support the unique business model of SYSCO.

Recommendation:

Discontentment

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