Applebees International EB3076

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					Applebee’s International
Industry Solutions > Retail

World’s casual dining leader relies on Teradata Warehouse for enterprise-wide understanding of sales, demand and costs
The Customer Applebee’s Neighborhood Grill & Bar is the world’s largest casual dining concept – with restaurants in forty-nine of the United States and in seven countries – but its mission is to be much more than a restaurant chain. The company – which has over 300 company-owned restaurants and 1,100-plus franchise restaurants – wants guests to see their local Applebee’s as a favorite neighbor, offering good food at an excellent price and friendly, attentive customer service. At each restaurant, the company strives to give its patrons the feeling that they’ve come to experience a good meal and a good time at a neighborhood grill – not at a typical franchise or chain restaurant. Business Objectives To keep its brand promise of being a neighborhood grill appealing to regional tastes – yet efficiently manage the nationwide chain of restaurants from its Overland Park, Kansas headquarters – Applebee’s needed a clear, focused understanding of its guests. “One of our business challenges is to understand our core guest,” says Seth Jensen, Senior Manager of Business Analysis within the Finance Group at Applebee’s. “We want our guests to have a voice in saying what they prefer on our

menu. Customer input serves as a valuable complement to the creativity of our culinary team, enhancing the team’s ability to develop menus that satisfy our guests’ preferences.” Understanding customers’ preferences is considered much more than a customer benefit at Applebee’s; it’s a key business strategy. “Our competition now is as fierce as it ever has been. So, it’s crucial to us to focus on our core guests who made us successful to begin with – and understand their preferences,” explains Jensen. Insight into regional preferences – such as patrons in Texas preferring steaks more than patrons in New England do – proved laborious and too time consuming with the company’s original method of using only spreadsheet software to analyze data gathered from point of sale systems in its 300-plus company-owned restaurants, and

Teradata helps Applebee’s International:
> Enhance menu offerings by providing actionable information from the Teradata Warehouse > Integrate point-of-sale and other systems’ data into daily reports that had previously taken weeks to gather and analyze > Improve accuracy of forecasting product requirements

from its financial, inventory, management, food cost variance, and labor systems. Just gathering the data took the effort of many people; analysis of the data could take weeks. In order to achieve its objective of gaining an integrated view of its guests and its business, Applebee’s realized that it needed a much more efficient method to gather and analyze all of its data – it needed a data warehouse solution.

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Applebee’s International
The Teradata Choice Applebee’s International, Inc. selected a Teradata® Warehouse from Teradata, a division of NCR, to integrate data from its 300 company-owned restaurants, as well as from its labor, financial, inventory, management and food cost variance systems. Additionally, the company chose Retail Decisions for Business Intelligence and MicroStrategy as its reporting and query tool. Applebee’s Teradata Warehouse is located at the company’s Restaurant Support Center and supports 50 to 60 users. Eventually, the company plans that remote users in different areas of the country will use its Teradata Warehouse. “Keeping up with approximately 150 inventory turns per year, as we do, would be very difficult for any company,” says Richard Stroup, Director of IT Product Development at Applebee’s International, Inc. “Our Teradata Warehouse helps us to do that and helps us make timely decisions with a lot more information, thereby empowering us to do a better job for our guests.” In fact, now Applebee’s gets information every day from the previous day’s sales at every company-owned restaurant. This sales information is broken down into every ticket item sold in fifteen-minute increments. In addition to reducing the amount of time it previously took to get that information from weeks to one day, Applebee’s Teradata Warehouse, says Stroup, “helps us make informed decisions quickly about our business so that we can react to our guests’ needs.” Business Insights “Thanks to our Teradata Warehouse, we’re really beginning to understand our business as a whole,” Stroup says. “There are three parts to our business: sales, demand, and cost of labor, materials and food. Understanding those three areas gives us a good picture of our entire business.” Making decisions in those three areas, adds Jensen, is significantly faster now with the Teradata Warehouse. “Before, without our Teradata Warehouse, getting the information to make decisions was extremely cumbersome,” he explains. Teradata-driven analysis took the guesswork out of decision-making, giving Applebee’s the power to quantify what the company thought to be true about customer preferences. As a result, Applebee’s was able to use its newfound actionable information to make better, faster decisions and uncover business opportunities. Understanding Sales “Our goal is to put the right products in front of our guests. By doing so, we ultimately increase frequency of visits as well as guest satisfaction,” says Jensen. “Those two attributes together are the basis for how we drive our revenues on a same store level.” “Now, we can put information in the hands of the people that make those decisions, and empower them to make better decisions.”

The Teradata Warehouse > Hardware
2-Node Intel-based 4850 processor

> Applications
Teradata Database Version 2 Release 4 Teradata Retail Decisions analytical applications

> Professional Services
Teradata Professional Consulting and Support Services for initial implementation and upgrade

> Partner Products
MicroStrategy Version MSI 7.1 for query agent and reporting

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Applebee’s International
“For example, that information directed and helped us understand what we needed to do to increase carry out sales without decreasing bar sales,” says Stroup. “That’s additional sales information and insight we gained from our Teradata Warehouse that we would never have been able to analyze before.” Specific insights such as these have empowered Applebee’s to optimize and enhance its menu offerings. Understanding Demand Applebee’s has six to eight campaigns each year in which it promotes special menu items. Forecasting demand for the items offered during special campaigns is critical to accurately ordering the right amount of products. “We’ve always had campaigns like this,” says Stroup. “But with our Teradata Warehouse, we’re able to manage them better and we’re much closer to our targeted demand than we were before.” This ability to forecast demand is important for all of its product offerings, not just for special campaigns. Jensen explains that Applebee’s warehouses all of its product mix from its 300-plus company owned restaurants. The items are regionally disbursed so that the company can get a good read on regional preferences and products. “We use this information as a basis to put together financial models that tell us which products are strong performers on the menu and which ones potentially could be replaced,” said Jensen. What’s more, says Stroup, information from customer satisfaction ratings has been integrated into the company’s Teradata Warehouse. “We can tie customer ratings back to specific items. This helps us understand which items are doing well, which taste good, which don’t, what was hot, what wasn’t, what presentation was good, what wasn’t, down to the plate level. Gathering this information would have been time consuming and dated before we implemented our Teradata Warehouse.” With Teradata, the company’s ability to accurately forecast product needs has significantly improved, resulting in lowered overall costs. Understanding Costs With its Teradata Warehouse, Applebee’s discovered that there is a wide disparity from region to region in what it costs the company to staff its restaurants, says Jensen. “Before, all we had was a percentage of sales basis to use as a budgeting tool,” he explains. “Now we’re actually budgeting how many people should be on staff for a location during a particular period of time because we can project what traffic is going to look like during those periods of time.”

“ Our purchasing department benefits
from what we’re doing with our Teradata Warehouse. Our forecasting accuracy has improved dramatically. When we run out of product, it’s at the end of a campaign. That gives us the flexibility to go on to something new rather than worry about excess inventory.”
– Seth Jensen, Senior Manager of Business Analysis, Finance Group, Applebee’s International Inc.

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Applebee’s International
Teradata.com
“With a Teradata Warehouse,” Jensen

“ Keeping up with approximately 150
inventory turns per year, as we do, would be very difficult for any company. Our Teradata Warehouse helps us to do that and helps us make timely decisions with a lot more information, thereby empowering us to do a better job for our guests.”
– Richard Stroup, Director, IT Product Development, Applebee’s International, Inc.

concurs, “we knew we could grow our warehouse without a lot of growing pains.” In fact, soon after Applebee’s implemented its initial one-node Teradata Warehouse, the company decided to upgrade to a two-node system. Stroup reports that the upgrade was seamless to end-users. The only indications of system changes were the inquiries about why the system was operating faster. “For an IT guy,” he says, “that’s the best compliment you can get!”

“Our purchasing department benefits from what we’re doing with our Teradata Warehouse,” said Jensen. “Our forecasting accuracy has improved dramatically. When we run out of product, it’s at the end of a campaign. That gives us the flexibility to go on to something new rather than worry about excess inventory.”

Why Teradata? Both Stroup and Jensen agree that scalability was key to Applebee’s selecting a Teradata Warehouse over other data warehousing options. “We didn’t know how fast we were going to grow or how much power we were going to need at first,” says Stroup, “but a Teradata Warehouse was the only one that offered us the absolute option of scalability.”

Teradata’s Professional Services also made a strong impression, Stroup explains, because the Teradata consultants were able to quickly assess the company’s specific needs and requirements. “Teradata is absolutely committed to excellence,” Stroup concludes. “Teradata’s support, software and systems make up a world-class system.”

Teradata and NCR are registered trademarks of NCR Corporation. All other brands and product names appearing in this release are registered trademarks or trademarks of their respective holders. NCR continually enhances products as new technologies and components become available. NCR, therefore, reserves the right to change specifications without prior notice. All features, functions and operations described herein may not be marketed in all parts of the world. Consult your Teradata representative for the latest information. No part of this publication may be reprinted or otherwise reproduced without permission from Teradata. © 2004 NCR Corporation Dayton, OH U.S.A. Produced in U.S.A. All Rights Reserved.

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