Chapter ll Managerial Supporf Systems

*4!RF@ Operational Business lntelligence

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Gase pizzaat papa Gino,s
lTelllgence Means Better
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Papa
85 per
lyzing
The Business Problem papa Gino's (www.papagi_
reporting tools and the information they wanted. In the there r

nos.com), the Dedham, Massachusetts, restaurant

operato!
generates massive amounts of data in its daily
operations.
The data include everything from statistics on
how long it
takes customers to receive pizza deliveries to how well
restaurarts stack up against local competition. Until May
2007, busines managers gathered data via e_mail each
day
from a variety of sources. The proces was difticult and
time consuming as district managers, who are qpically
responsible for 8 to 12 restaurants, accumulated
data and
passed it on to regional vice presidents for further
analysis.
In mid-2007, papa Gino's was in the middle of
strategic five-year project to optimize its information
tech_
nology systems and applications throughout the organi
zation. The goal was to improve the performance of
its
restaurants. The company wanted to more effectively
leverage the large amounts ofdata being gathered in
a vari_
ety of systems, including the J.D. Edwards enterprise
resource-planning applications; internally developed,
in_
store point-of-sale systems; and Excel spreadsheets.
The overall business and many ofthe individual
restaurants were performing satisfactorily when papa
Gino's used the old process of data analysis. However,
executives wanted to improve the process, save time,
and
tap into the wealth of information more effectively in
order to generate additional improvements.
The lT Solution To accomplish these goals, papa
Gino's deployed operational business intelligence (BI)
software. Operational business intelligence is the process
ofusing business intelligence to drive and optimize busi_
ness operations and decision making on a daily basis
or
sometimes several times per day. The operational BI
software at Papa Gino's placed reporting and analltics
applications in the hands of business users who could
analyze information to identifi strategies for working
more efficiently and improving results. In all, some
100
managers at Papa Gino's use the BI application.
Papa Gino's deployed the operational BI software
in
three phases. In the first phase, business users acquired
the
second phase, this.information was reduced to l0
to 20
metrics deemed vital to the business. (Users had the option operd
to look at other metrics as needed.) Finally, in the third lrzg'
phase, malagers used the technology to report and efft is d
man_
age by exception. In other words, they examined key BI
met_
"ppl
rics for conditions that fell outside pre-established ranges. should
which
The Results Papa Gino's managers now receive data
much more quickly. It is generally available to all key has ser
deci_
sion makers in the organization by 6:30 every morning. deliver
a With the software, papa Ginot managers use The co
dashboards to quickly analyze financial data, such as improt
revenue, at individual restaurants by week, month, custom
or
year. They then compare the revenue data with
similar
data from the same restaurant in preyious periods,
with
revenue goals set by management, and with revenue at
other restaurants in the same region or state. The system
also reports and analyzes operational data_such as
how
many customers visit a restaurant during various times,
what qpes of menu items customers are ordering, and
how many hours employees are logging_so managers
can see how each restaurant is performing.
With the manage-by-exception strategy, decision
makers look only at data that are outside certain thresholds
or percentages-both in a positive and negative direction.
For example, ifa restaurant's average total ofdaily guests falls
below a certain threshold, managers are alerted to the anom-
a.lyln the same way, managers are made aware ofrestaurants
that have a higher-than- expected number ofguests.
Food delivery accounts for about one_third of
Papa Gino's business, so a key statistic is percentages
of
on-time deliveries. Managers look at the delivery times
promised to customers and analyze how well the restau_
rants are meeting that promise.
Another major contributor to the business is
phone-ahead orders, so other key statistics include how
quickly order takers at restaurants answer the phone, how
many calls are abandoned by customers, and how maly
callers receive busy signals when they dial the restaurants.
 lnteractive Case: Developing managerial support systems for Ruby's Club

Papa Gino's claims that the industry standard is to have
85 percent of calls answered within 12 seconds. By ana-
lyzing calling data, managers can determine whether
there are enough people answering the phones.
Sorrcer: Compiled from 'CIO Values: paul Vdle, CIO, papa
Gino's Pizzal' Informationweeh August 30,2008; B. Violino,
"Operational BI: Digging l)eeper for Datal' CIO Insight,
August 27, 2008j P Thibodeau, "How Business Intelligence
Tools Can Help Improve Pizza Deliveryi' Cornputerworld,

One of the tangible benefits of the BI rystem is that
operations and filance managers now spend more time ana-
llzing data trends and less time collecting data. Another ben-
efit is that managers can use the forecasting capabilities ofthe
BI application to get a better idea ofhow much product they
should order and how many workers they should schedule,
which improves the overall efficiency ofoperations.
As for performance improvements, papa Ginob
has seen gains such as a higher percentage of on-time
deliveries since it deployed the operational BI system.
The company is using the system as a tool to refine and
improve the restaurant experience and increase
customer satisfaction.
February 6, 2008; "G. Gruman, "Operational Business Intel-
ligence Spot Problems Sooner: Clq November 7,2007j C.
White, "The Nxt Geleration of Business lntlligence:
Operational BI;' Information Management Magazine, May
l, 2005; "Operational BI Comes ofAgel' Businessweek Spe,
cial Advedising Section. May tc,2OO5: u'wwpapagnos. on.
accessed January 30, 2009.
Questions
l Describe the various benefits that Papa Gino! is seeing
from its operational business intelligence system.
2. Discuss additional analyses that Papa Gino\
managers and analysts could run that would benet-it
the company and its restaurants and provide
competitive advantage.

Developing managerial support systems

for Ruby's Club ttllD'&l
'
Go to the Ruby's Club link at the Student Companion web site or
WileyPLUS for information about your current internship assignment. you
will analyze and recommend managerial support systems to help the club,s
managers better understand their monthly goals and how to achieve them.