Broward Community Business Intelligence at CKE Restaurants Recommendations Paper At a time when most fast food restaurants were touting nutrition, Hardee’s

Broward Community Business Intelligence at CKE Restaurants Recommendations Paper At a time when most fast food restaurants were touting nutrition, Hardee’s proudly introduced the Monster Thickburger. It boasts a phenomenal 1,420 calories and 107 grams of fat. It consists of 2 one-third-pound charbroiled 100% Angus beef patties, three slices of American cheese, a dollop of mayonnaise, and four crispy strips of bacon on a toasted buttery sesame seed bun. What on earth was CKE Restaurants, the owners of the Hardee’s chain, thinking? Because of its business intelligence system (BIS), CKE was confident about introducing the Monster Thickburger across the United States. A BIS uses data mining, analytical processing, querying, and reporting to process a business’s data and derive insights from them. CKE’s BIS, known ironically inside the company as the CKE performance reporting (CPR), monitored the performance of its Monster Thickburger in test markets to ensure that the burger contributed to increases in sales and profits at restaurants without cannibalizing sales of other more modest burgers. To do so, CKE’s BIS studied a variety of factors-such as menu mixes, Monster Thickburger production costs, average unit volumes for the Monster 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 sales of Monster Thickburger exceeded expectations in the test markets, CKE developed a $7 million dollar advertising campaign to launch its nationwide introduction. Monster Thickburger sales exceeded expectations, and Hardee’s sales revenues increased immediately, eventually growing by 8%. “The Monster Thickburger was directly responsible for a good deal of that increase,” says Brad Haley, Hardee’s executive vice president of marketing. Partially because of its reliance on CPR, CKE was rescued from the brink of bankruptcy. It increased sales at restaurants open more than a year, narrowed its overall losses, and finally turned a profit after three years. CPR, its proprietary system, consists of a Microsoft SQL server database and uses Microsoft development tools to parse and display analytical information. It uses econometric models to provide context and to explain performance. The company reviews and refines these models each month. The econometric models take into consideration 44 factors, including the weather, holidays, coupon activity, discounting, free giveaways, and new products. With the click of a button, for example, a sales downturn can be explained on a screen showing, for example, that 5% of the 8% decrease was due to torrential rain in the Northeast and 2% was due to free giveaways. In the competitive restaurant chain industry, companies have to be agile and responsive to the dynamic environment that they face. They must match their BIS initiatives to their business strategies in order to improve operations and their bottom lines. BISs assist companies in making strategic decisions about menu items and closures of underperforming stores as well as tactical matters such as renegotiating contracts with food suppliers, monitoring food costs, and identifying opportunities to improve inefficient processes. To derive value from their BISs, many restaurant chains have successfully reduced the three biggest barriers to BIS success: voluminous amounts of irrelevant data, poor data quality, and user resistance. CKE’s CIO and Executive Vice President of Strategic Planning Jeff Chasney states: “If you ‘re just presenting information that’s neat and nice but doesn’t evoke a decision or impart important knowledge, then it’s noise. You have to focus on what are the really important things going on in your business.” Chasney stresses that a BIS should be different from the plain-vanilla standard corporate reporting tools of old. Rather, a BIS should provide managers insights rather than just data. He believes that the context from which the data were collected significantly impacts how those data should be interpreted. Systems that just report changes without enough background or information on what caused those changes are not very useful. Managers don’t know what data to trust. Chasney explains, “If your business intelligence system is not going to improve your decision making and find problem areas to correct and new directions to take, nobody’s going to bother to look at it.” The first step to developing a BIS is to understand the company’s decision-making processes. Before information is collected, analyzed, and used in the BIS, someone has to identify what information is needed to confidently make decisions. For instance, the CEOs of CKE’s restaurant chains wanted to understand what made sales fluctuate while the COOs wanted to know how to recognize good business opportunities as well as underperforming properties. Then the BIS designer must determine the appropriate presentation format, be it a report, a chart, or a Web site. BIS must add value to the executive’s decision-making processes. To do that, attention must be paid to the critical performance indicators. For CKE, as Chasney learned, those are sales, cost of sales, exceptions (such as high-performing or underperforming areas), and business trends.
Question: What are some recommendations for developing & using the BIS described in this case? Sales System Number
265801-2014111
265801-2014111
315320-2014111
265980-2014111
329247-2014111
399053-2014111
407197-2014111
407886-2014111
410718-2014111
265005-2014111
265288-2014111
265440-2014111
265778-2014111
265758-2014111
265068-2014111
265609-2014111
265862-2014111
266104-2014111
265823-2014111
330618-2014111
332509-2014111
333704-2014111
407148-2014111
265752-2014111
265848-2014111
266106-2014111
331393-2014111
Date of Sale
Extract Date
Sales Consultant ID
10/1/2014
11/1/2014
35353356
10/1/2014
11/1/2014
66464667
10/3/2014
11/1/2014
57575758
10/3/2014
11/1/2014
75265980
10/5/2014
11/1/2014
83748200
10/10/2014
11/1/2014
26354410
10/11/2014
11/1/2014
33407197
10/12/2014
11/1/2014
40278386
10/13/2014
11/1/2014
41107218
10/14/2014
11/1/2014
26150025
10/20/2014
11/1/2014
26354410
10/20/2014
11/1/2014
26354410
10/20/2014
11/1/2014
26356778
10/20/2014
11/1/2014
26457518
10/20/2014
11/1/2014
26520168
10/20/2014
11/1/2014
26526109
10/25/2014
11/1/2014
12658262
10/25/2014
11/1/2014
26161204
10/25/2014
11/1/2014
26531823
10/26/2014
11/1/2014
33011618
10/26/2014
11/1/2014
33255099
10/28/2014
11/1/2014
33233704
10/28/2014
11/1/2014
43207148
10/30/2014
11/1/2014
26325752
10/30/2014
11/1/2014
26621106
10/30/2014
11/1/2014
26621106
10/31/2014
11/1/2014
33135393
SC Last name
Rucco
Wiare
Frank
Manuter
Travas
Smith
Heston
Nova
Buster
Jones
Smith
Smith
Dimit
Hansen
Vega
Periter
Wearever
Uarlike
Nayen
Kite
York
Amisher
Bush
Regan
Justin
Justin
Williams
SC First Name
Adriano F
Carol P.
Benjamin
Victor
Francisco A
Debbie
Kelly L
Jeremy S
Jacqueline M
Jennifer
Debbie
Debbie
Enrique
Vanessa
William
Eugene
Erick
Yaniri A
Alicia
David N
Alex V
Aisha T
Douglas B
Andres A
Micah Rae
Micah Rae
Clarence P
State
NY
GA
FL
NY
TX
FL
AR
AR
MS
NY
FL
FL
FL
NY
NY
NY
NY
NY
IL
KY
NY
NY
AR
NY
LA
LA
KY
Office
MANHATTAN
ATLANTA
MIAMI
MANHATTAN
EL PASO
MIAMI
Arkansas
Arkansas
Tri-State
MANHATTAN
MIAMI
MIAMI
MIAMI
MANHATTAN
MANHATTAN
MANHATTAN
MANHATTAN
MANHATTAN
CHICAGO
LOUISVILLE
MANHATTAN
BRONX
Arkansas
MANHATTAN
NEW ORLEANS
NEW ORLEANS
LOUISVILLE
Region
NORTH
SOUTH
FL/HI
NORTH
SOUTH
FL/HI
SOUTHWEST
SOUTHWEST
SOUTHWEST
NORTH
FL/HI
FL/HI
FL/HI
NORTH
NORTH
NORTH
NORTH
NORTH
NORTH
SOUTH
NORTH
NORTH
SOUTHWEST
NORTH
SOUTH
SOUTH
SOUTH
Territory
DOWNSTATE NEW YORK
ATLANTA-NORTH GEORGIA
SOUTH FLORIDA
DOWNSTATE NEW YORK
SAN ANTONIO
SOUTH FLORIDA
ARKANSAS
ARKANSAS
MISSISSIPPI
DOWNSTATE NEW YORK
SOUTH FLORIDA
SOUTH FLORIDA
SOUTH FLORIDA
DOWNSTATE NEW YORK
DOWNSTATE NEW YORK
DOWNSTATE NEW YORK
DOWNSTATE NEW YORK
DOWNSTATE NEW YORK
ILLINOIS
KENTUCKY
DOWNSTATE NEW YORK
DOWNSTATE NEW YORK
ARKANSAS
DOWNSTATE NEW YORK
LOUISIANA
LOUISIANA
KENTUCKY
Tax Type
W2
W2
1099
W2
1099
1099
1099
1099
1099
W2
1099
1099
W2
W2
W2
W2
W2
W2
W2
1099
W2
1099
1099
W2
W2
W2
1099
Total Contracts
10
4
11
4
0
5
0
1
11
13
0
7
1
9
10
25
9
4
1
1
16
0
3
13
7
10
9
Total Sales
Total Cancellations
$30,291.00
1
$39,999.00
0
$92,829.00
1
$44,255.00
2
$0.00
0
$20,100.00
1
$7,881.00
0
$10,000.00
0
$83,641.00
5
$0.00
13
$0.00
0
$44,242.00
0
$555.00
0
$80,000.00
0
$45,000.00
0
$54,535.00
0
$24,222.00
0
$14,344.00
0
$6,566.00
0
$250.00
0
$50,000.00
1
$321.00
0
$600.00
0
$72,990.00
0
$35,000.00
0
$87,382.00
1
$21,222.00
0
Sales System Number
265005-2014111
265068-2014111
265288-2014111
265440-2014111
329247-2014111
399053-2014111
265609-2014111
265758-2014111
265778-2014111
265823-2014111
265862-2014111
266104-2014111
330618-2014111
407197-2014111
407886-2014111
265801-2014111
265801-2014111
265980-2014111
332509-2014111
333704-2014111
315320-2014111
407148-2014111
410718-2014111
265752-2014111
265848-2014111
266106-2014111
331393-2014111
Date of Sale
Extract Date
Sales Consultant IDSC Last nameSC First NameState
11/1/2014
12/1/2014
26354410 Smith
Debbie
FL
11/2/2014
12/1/2014
33407197 Heston
Kelly L
AR
11/2/2014
12/1/2014
40278386 Nova
Jeremy S
AR
11/2/2014
12/1/2014
41107218 Buster
Jacqueline MMS
11/3/2014
12/1/2014
33011618 Kite
David N
KY
11/4/2014
12/1/2014
33255099 York
Alex V
NY
11/5/2014
12/1/2014
66464667 Wiare
Carol P.
GA
11/5/2014
12/1/2014
35353356 Rucco
Adriano F NY
11/5/2014
12/1/2014
26520168 Vega
William
NY
11/5/2014
12/1/2014
26152889 Smith
Debbie
FL
11/6/2014
12/1/2014
26356778 Dimit
Enrique
FL
11/7/2014
12/1/2014
26354410 Smith
Debbie
FL
11/8/2014
12/1/2014
26531823 Nayen
Alicia
IL
11/10/2014
12/1/2014
33233704 Amisher
Aisha T
NY
11/10/2014
12/1/2014
43207148 Bush
Douglas B AR
11/11/2014
12/1/2014
26526109 Periter
Eugene
NY
11/12/2014
12/1/2014
26457518 Hansen
Vanessa
NY
11/13/2014
12/1/2014
12658262 Wearever Erick
NY
11/15/2014
12/1/2014
75265980 Manuter
Victor
NY
11/16/2014
12/1/2014
57575758 Frank
Benjamin FL
11/17/2014
12/1/2014
26161204 Uarlike
Yaniri A
NY
11/23/2014
12/1/2014
83748200 Travas
Francisco A TX
11/27/2014
12/1/2014
26621106 Justin
Micah Rae LA
11/29/2014
12/1/2014
26150025 Jones
Jennifer
NY
11/29/2014
12/1/2014
33135393 Williams
Clarence P KY
11/30/2014
12/1/2014
26325752 Regan
Andres A
NY
11/30/2014
12/1/2014
26621106 Justin
Micah Rae LA
Office
Region
Territory
Tax Type
Total Contracts
MIAMI
FL/HI
SOUTH FLORIDA
1099
Arkansas
SOUTHWESTARKANSAS 1099
Arkansas
SOUTHWESTARKANSAS 1099
Tri-State
SOUTHWESTMISSISSIPPI 1099
LOUISVILLE SOUTH
KENTUCKY 1099
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
ATLANTA SOUTH
ATLANTA-NORTH
W2 GEORGIA
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
MIAMI
FL/HI
SOUTH FLORIDA
1099
MIAMI
FL/HI
SOUTH FLORIDA
W2
MIAMI
FL/HI
SOUTH FLORIDA
1099
CHICAGO NORTH
ILLINOIS
W2
BRONX
NORTH
DOWNSTATE1099
NEW YORK
Arkansas
SOUTHWESTARKANSAS 1099
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
MIAMI
FL/HI
SOUTH FLORIDA
1099
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
EL PASO
SOUTH
SAN ANTONIO
1099
NEW ORLEANS
SOUTH
LOUISIANA W2
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
LOUISVILLE SOUTH
KENTUCKY 1099
MANHATTANNORTH
DOWNSTATEW2
NEW YORK
NEW ORLEANS
SOUTH
LOUISIANA W2
Total Sales
5
0
1
4
1
9
1
3
2
14
1
7
1
0
3
16
2
2
4
11
4
0
10
5
7
5
2
Total Cancellations
$20,100.00
$0.00
$10,000.00
$4,000.00
$900.00
$30,000.00
$550.00
$10,300.00
$5,000.00
$1,000.00
$5,000.00
$500.00
$3,000.00
$0.00
$0.00
$20,000.00
$1,010.00
$211.00
$20,100.00
$500.00
$10,000.00
$0.00
$87,382.00
$0.00
$20,000.00
$20,000.00
$1,000.00
1
0
0
0
0
1
0
0
0
13
0
0
0
0
0
0
0
0
1
10
0
0
1
5
0
0
0
Sales System Number
265005-2014111
265288-2014111
410718-2014111
265609-2014111
265440-2014111
266104-2014111
333704-2014111
331393-2014111
407148-2014111
265752-2014111
265823-2014111
407886-2014111
265801-2014111
315320-2014111
399053-2014111
265778-2014111
265758-2014111
265801-2014111
332509-2014111
265068-2014111
329247-2014111
266106-2014111
265862-2014111
265848-2014111
407197-2014111
330618-2014111
265980-2014111
Date of Sale
Extract Date Sales Consultant IDSC Last name
12/1/2014
1/1/2015
26354410 Smith
12/1/2014
1/1/2015
40278386 Nova
12/1/2014
1/1/2015
26621106 Justin
12/2/2014
1/1/2015
66464667 Wiare
12/3/2014
1/1/2015
41107218 Buster
12/3/2014
1/1/2015
26354410 Smith
12/4/2014
1/1/2015
57575758 Frank
12/5/2014
1/1/2015
26621106 Justin
12/6/2014
1/1/2015
83748200 Travas
12/6/2014
1/1/2015
26150025 Jones
12/7/2014
1/1/2015
26152889 Smith
12/8/2014
1/1/2015
26621106 Justin
12/9/2014
1/1/2015
26526109 Periter
12/9/2014
1/1/2015
26161204 Uarlike
12/10/2014
1/1/2015
33255099 York
12/11/2014
1/1/2015
26520168 Vega
12/12/2014
1/1/2015
35353356 Rucco
12/13/2014
1/1/2015
26457518 Hansen
12/14/2014
1/1/2015
75265980 Manuter
12/15/2014
1/1/2015
33407197 Heston
12/19/2014
1/1/2015
33011618 Kite
12/20/2014
1/1/2015
26325752 Regan
12/21/2014
1/1/2015
26356778 Dimit
12/22/2014
1/1/2015
33135393 Williams
12/23/2014
1/1/2015
33233704 Amisher
12/24/2014
1/1/2015
26621106 Justin
12/30/2014
1/1/2015
12658262 Wearever
SC First Name
Debbie
Jeremy S
Micah Rae
Carol P.
Jacqueline M
Debbie
Benjamin
Micah Rae
Francisco A
Jennifer
Debbie
Micah Rae
Eugene
Yaniri A
Alex V
William
Adriano F
Vanessa
Victor
Kelly L
David N
Andres A
Enrique
Clarence P
Aisha T
Micah Rae
Erick
State
FL
AR
LA
GA
MS
FL
FL
LA
TX
NY
FL
LA
NY
NY
NY
NY
NY
NY
NY
AR
KY
NY
FL
KY
NY
LA
NY
Office
MIAMI
Arkansas
NEW ORLEANS
ATLANTA
Tri-State
MIAMI
MIAMI
NEW ORLEANS
EL PASO
MANHATTAN
MIAMI
NEW ORLEANS
MANHATTAN
MANHATTAN
MANHATTAN
MANHATTAN
MANHATTAN
MANHATTAN
MANHATTAN
Arkansas
LOUISVILLE
MANHATTAN
MIAMI
LOUISVILLE
BRONX
NEW ORLEANS
MANHATTAN
Region
FL/HI
SOUTHWEST
SOUTH
SOUTH
SOUTHWEST
FL/HI
FL/HI
SOUTH
SOUTH
NORTH
FL/HI
SOUTH
NORTH
NORTH
NORTH
NORTH
NORTH
NORTH
NORTH
SOUTHWEST
SOUTH
NORTH
FL/HI
SOUTH
NORTH
SOUTH
NORTH
Territory
Tax Type
SOUTH FLORIDA
1099
ARKANSAS
1099
LOUISIANA
W2
ATLANTA-NORTH GEORGIA
W2
MISSISSIPPI
1099
SOUTH FLORIDA
1099
SOUTH FLORIDA
1099
LOUISIANA
W2
SAN ANTONIO
1099
DOWNSTATE NEW YORK
W2
SOUTH FLORIDA
1099
LOUISIANA
W2
DOWNSTATE NEW YORK
W2
DOWNSTATE NEW YORK
W2
DOWNSTATE NEW YORK
W2
DOWNSTATE NEW YORK
W2
DOWNSTATE NEW YORK
W2
DOWNSTATE NEW YORK
W2
DOWNSTATE NEW YORK
W2
ARKANSAS
1099
KENTUCKY
1099
DOWNSTATE NEW YORK
W2
SOUTH FLORIDA
W2
KENTUCKY
1099
DOWNSTATE NEW YORK
1099
LOUISIANA
W2
DOWNSTATE NEW YORK
W2
Total Contracts
0
5
10
9
3
1
9
1
0
18
14
11
16
4
9
0
3
18
16
0
2
16
1
7
1
2
16
Total Sales
$0.00
$10,000.00
$0.00
$7,000.00
$4,000.00
$500.00
$2,000.00
$1,000.00
$0.00
$7,000.00
$1,000.00
$0.00
$20,000.00
$10,000.00
$30,000.00
$5,000.00
$10,300.00
$7,000.00
$20,000.00
$0.00
$900.00
$20,000.00
$5,000.00
$20,000.00
$0.00
$0.00
$20,000.00
Total Cancellations
0
3
10
3
0
0
5
0
0
5
13
11
0
0
1
0
0
10
0
0
0
0
0
0
0
2
0

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