Home Depot centralizes data

That it is 2002 and Home Depot is finally installing an enterprise-wide data warehouse is no surprise to Keith Gile. In fact, in a market where few companies are actually doing it, the hardware and home supply behemoth is, though not bleeding edge, certainly on the leading edge of this type of technology implementation, he said.

For years there has been talk about creating one centralized repository for corporate data that can be sliced and diced to get the all-important 360 degree view of both the customer and the company’s operations. But the simple fact is few companies have gone that route. The cost is generally high and the internal business support needed to proceed with a project of this size often takes years to align.

Today most companies that are doing some data warehousing and data mining are doing so in a more limited fashion. For example, sales data may be passed on to marketing to design a new advertising campaign, or HR may look at employee attrition rates to try to figure out ways to reduce it. But all the data under one roof? That is an aberration rather than the norm.

Let’s face it “very few companies are Wal-Mart,” said Gile, a senior industry analyst with Giga Information Group in Norwalk, Conn. “They are the bleeding-edge organization that has been doing this forever.

“Enterprise data warehousing is indeed a daunting task, and therefore you must make it manageable,” he said.

Though Home Depot has been gathering data for years, it has been under the direction of new CEO Bob Nardelli that there has been an increased focus on data management, said Kevin Murphy, vice-president of information management with Home Depot in Atlanta.

Murphy said he and his team have been given a 120-day time frame for installing the IT infrastructure and, at the same time, delivering the first phase of the project. The first phase will involve metrics and dashboards for use in HR and will be ready by Q4 of this year. But the overall project will be ongoing.

“There is no end to an enterprise data warehouse, it is just the next slice of information that you are going to populate.”

The multi-million dollar project – Murphy puts the figures at tens of millions – will be centred at the Atlanta corporate headquarters.

going with ibm

Home Depot already uses IBM Corp.’s DB2 technology to store information on around 100 mainframes, said Jeff Jones, director of strategy for IBM data management solutions in San Jose. For the data warehouse project Home Depot will continue to use IBM’s technology, going with the p690 server, better known as Regatta.

Jones said Regatta-specific technology, such as its ability to partition memory and disk storage for multiple workloads as if they were separate servers, will make eventual data mining more effective.

But Murphy admits that the technology is the easy part of the implementation.

The hurdle is not that you build it and they will come, but rather that you have to build it with the business in mind, he said. “The technology part of it, honestly, is not as important as the business relationships.”

Michael Turney, CRM program manager with SAS Institute Canada Inc. in Toronto, agrees that the business side of an implementation such as this is usually the toughest part. He said it’s often the simple problems, such as who owns the data that become divisive issues. For this reason, Turney said, it is very important to have a project of this scope driven by the CEO, as is the case with Home Depot.

Regardless how the project is put in place, the bottom line is ROI. How can a company take hard corporate data and increase both company efficiencies and customer satisfaction?

For a company like Home Depot, where store staffing is critical, any customer trends can be quickly exploited. It is partly for this reason the first portion of the implementation is going to focus on HR.

Unlike traditional retailers, Home Depot has two distinct sets of clients; the professional contractor and the hobbyist. The former needs information from true experts. So if Home Depot notices statistically that it sells more lumber to contractors on Monday, then that is a good day to beef up staff in that section.

Staffing is equally important on the consumer side, Gile said. Since the company often offers home repair seminars, it makes sense to have them on days when people are buying those products.

The key is to make sure HR is properly co-ordinated with customer needs, Gile said. If people are buying toilets on Saturday “and there is a seminar on fence building, it is a lost opportunity.”

Murphy said Home Depot has not yet made a decision on who is going to supply the data-mining software.

In the future, the chain can achieve ROI using a wide variety of gathered information, from targeted advertising and store product placement to reduced inventory and employee turnover.

Everyone ComputerWorld Canada spoke to agreed on one thing: with the economy in the doldrums it is a great time for companies to buy IT, since deals can be had.