The Smart Burger
America may be getting fatter and so are the profits at CKE Restaurants. CKE, the company that owns and operates Hardee's, is hitting it big with the counter-intuitive release of its Monster Thickburger (1,420 calories, 107 grams of fat). Just when companies like McDonald's are getting defensive and expanding the healthier parts of their menus, why in the world would Hardee's start marketing something like this? Because that's what its BI-driven analysis showed that its customers wanted, explains Jeff Chasney, CIO and EVP of strategic planning at CKE. 
The company relied on a BI system to test market its monstrously large burger and the sales it produced. It studied menu mixes, production costs, average unit volumes, gross profits and total sales. Findings in hand, CKE rolled the product out nationwide in November 2004 with a $7 million ad campaign and high confidence in its success. The company has not been disappointed. Sales rose significantly -- up 5.8 percent for December -- and "the Monster Thickburger was directly responsible for a good deal of that increase," says Brad Haley, Hardee's executive vice president of marketing in CIO Magazine.
While the Hardee's anecdote is a good one, the most interesting point in the article is the intensity with which restaurant chains such as Hardee's, Wendy's, Ruby Tuesday, T.G.I. Friday's all are leveraging BI to compete. Whether the objective is to make strategic product decisions, determine how to more effectively manage procurement or identify inefficient processes, these types of organizations are on the leading edge of BI.
Critical to the success of restaurant chains with BI is the fact that the insights they produce are so readily applicable to their operations and profit margins. "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," says CKE's Chasney. "You have to focus on what are the really important things going on in your business," he says.
Chasney goes further to explain that it is "context" or "insight" that matters most when designing and enhancing a BI system. Nobody needs to be flooded with useless data. He advises companies to begin by analyzing how decisions are made in the organizaton and then determine how the information can strengthen that decision-making process. What information needs to be collected, analyzed and presented and how can this be most effectively accomplished? What types of reports, for instance, are most useful?
Chasney began building CKE's system in 2000, responding to the requests for information he received from different corporate execs. The CEO asked for information on what was influencing sales; the operating executives wanted indicators of individual restaurant performance. Those conversations enabled Chasney to focus on capturing key indicators such as sales, cost of sales, outperformers/underperformers, historical trends and predictive patterns. Chasney also was able to show the factors influencing those trends and patterns through sophisticated modeling of various operating activities and business conditions. The CEO can even distinguish whether a sudden drop in sales was influenced by the weather in a certain region or whether a rise in another region was related to a coupon giveaway.
"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," says Chasney.