How Big Companies Are Reining In Data Sprawl

The challenge of organizing data and making systems interactive may pale besides the difficulty of getting those who believe they 'own' it to share. JL

Steven Norton reports in the Wall Street Journal:

Fragmented infrastructure has left data, including critical information, sitting in disparate and disconnected systems.The value of these projects comes from harmonizing information about customers, suppliers, parts, products and other materials.
Facing unprecedented volumes of data and complex global infrastructures, big companies are plowing into yearslong efforts to merge disparate data sets, in the hope of extracting cost savings and insights about customers.
Whole Foods Market Inc. WFM -0.63 % last week said it would build a new retail management system, part of a push by the grocer to better understand its supply chain, automate the pricing process, and satisfy customers who demand more information about the nutritional value and provenance of their food. Other big companies such as Wal-Mart Stores Inc. WMT -1.24 % and General Electric Co. GE -1.43 % also are moving to integrate their data. It is a painstaking process, but one that has started to pay off with lower costs and improved efficiency, according to GE.
At Whole Foods, the new platform would unify 12 versions of a homegrown system running across all its 431 stores, a byproduct of the company’s early growth through acquisitions and a focus on regional markets. The fragmented infrastructure has left product data, including critical information on quality standards and nutrition, sitting in disparate and disconnected systems.
“This platform is built on being able to bring together all of those pieces as a major foundation for our business,” Whole Foods Chief Information Officer Jason Buechel said in an interview.
If the integration goes according to plan, the new platform would for the first time give Whole Foods a single view of its product data. Such a centralized view could help it predict demand and manage its pricing, said Mr. Buechel, who declined to forecast when the process would be complete. The company also hopes to use the new platform to deliver product information to customers who shop online or with a mobile app.
Whole Foods is working with enterprise software maker Infor Inc. to build its new system. Other companies that sell enterprise resource planning tools include SAP SE and Oracle Corp. ORCL -0.05 %
The value of these projects comes from harmonizing information about customers, suppliers, parts, products and other materials, Gartner Inc. IT -0.53 % analyst Bill Swanton said. That integration process can require years of work, as companies tackle mundane but critical questions such as how data should be labeled, or how business processes should evolve in step with data platforms.
GE’s Power & Water unit is working to consolidate 38 enterprise resource planning systems to fewer than seven, one for each of its major business units, which include nuclear energy and water. These ERP systems handle day-to-day business functions such as inventory management and billing.
A hodgepodge of different ERP systems makes it difficult to monitor the flow of materials across multiple factories, said Clay Johnson, Global CIO of the power and water unit. Each of those systems might handle processes like billing and ordering in a different way. One system might be set up to purchase a part from a supplier for $10, while another system—using a different part number—might buy the same part from a different vendor for $7.
The biggest challenge at GE Power & Water has been creating standards around business processes and data management, Mr. Johnson said. Integration has required many conversations about the intricacies of data labeling, such as whether to classify customer information under a heading such as “LASTNAME” or “L NAME.”
“Trying to get everyone to agree on a standard nomenclature is very hard,” Mr. Johnson said.
But the process has been worth the effort, he added. In the water division, which went from 22 separate ERP systems to one, the time it takes to close the financial books at the end of the quarter has gone from four days to one, he said.
Wal-Mart created a group at its Bentonville, Ark., headquarters three years ago, called the e-commerce integration center, which is responsible for building software to connect e-commerce systems to its brick-and-mortar store systems. The company is integrating shopping data from online and store transactions, in part to create a fuller view of customer behavior, said Jeremy King, chief technology officer of Wal-Mart’s global e-commerce group.
“Customers don’t distinguish between online and offline, and retailers ignore that at their peril.”