Cardinal Health: company overview and operations

Cardinal Health #2 Analytics and BI

Cardinal Health Case Analysis -- Additional questions on Analytics and BI

In your opinion, what was the most important component of Cardinal Health's strategy to utilize advanced BI techniques?

The decision to implement advanced BI techniques in the context of data structures that perfectly aligned with and supported the information culture of the organization was key. Following this decision, Cardinal Health was able to define an advanced BI strategy that aligned to metrics and Key Performance Indicators (KPIs) that were highly relevant and needed in the company. Cardinal Health has a very analytics-driven business model and as a result needed to have access to advanced BI capabilities to further accomplish its challenging goals. By ensuring alignment of the advanced BI system to the specific needs of the company, Cardinal Health was able to transform business processes with better, more accurate information. This was pivotal to also overcoming resistance to change in the company to the new system. All of these factors were coordinated well so the new BI system and its reporting were immediately perceived as a valuable new addition instead of a threat.

Cardinal Health also chose to define a common data model across all division, making analytical tools and applications immediately available to every analyst and manager who relied on these systems to do their jobs. This was seen as more egalitarian than exclusive which further increased trust in the system overall. By also limiting the variety of end user tools and defining a clear vision of how the data would be used, Cardinal Health created a foundation for future enhancements that would only align with the vision and mission of the company. Unifying all of these elements together was a robust, state-of-the-art support environment which also mitigated resistance to change by providing increased expertise and knowledge. All of these factors taken together assisted the company in attaining tis objectives of implementing an advanced by and analytics platform.

Do you have any experience with your company succeeding in embracing advanced BI techniques?

While working for a company that specialized in distribution sales and service, a large-scale analytics and BI platform was implemented. The goals of the new system were to better manage pricing, price optimization, inventory levels, credit levels by resellers, and analyze reseller and large account customer data to better predict product requirements. It was also being used for forecast analysis of the emerging channel assembly business, which is where the distributor was offering to build systems to order for larger customers. The amount of data for all these strategies had been in over 40 different systems, and often pricing levels were wrong in the legacy ERP system. The result of these shortcoming was the company earned just 1% on sales one year, barely enough to stay profitable. The CEO chose to immediately implement a new analytics and BI platform and series of applications to stem the lost profitability due to not having enough insight into operations. The entire analytics and BI strategy was eventually going to be integrated with the legacy ERP system and used for managing a transition to more channel services. This strategy worked well on the traditional pick-pack-ship products that were low in margin. The change management aspects of the analytics and BI strategy worked well for products that didn't need to be modified for reseller needs. It however was challenging for the more advanced aspects of channel assembly and build-to-order requirements. The change management strategies necessary