Chapter 6 Case Study: Panasonic Creates a Single Version of the Truth from Its Data

Question #1: How did Panasonic's information management problems affect its business performance and ability to execute its strategy? What management organization and technology factors were responsible for those problems?

Panasonic’s operations expanded rapidly throughout Europe, Asia, and North America. In Europe, the company has 15 subsidiaries, 14 manufacturing facilities, and five research and development centers, and seven administrative offices. As a result of having so many different sources of data, the company was unable to manage its data effectively. The product and customer data was inconsistent, duplicate, or incomplete. Different segments of Panasonic used their own data management operations that were isolated or different from other locations within the company. Ultimately, this resulted in a decrease in operational efficiency and higher costs from the company. The data required to launch new products in the market are photos, product specification and description, manuals, pricing data, and point-of-sale marketing information. The employees use this data to select product information that suits the needs of the region or country. As a result, with a lack of an adequate database to manage product data, the company was unable to sustain a substantial profit and strategically market new products.

The CEO’s and managers at Panasonic did not anticipate a substantial market demand for their products. They did not seek their employee feedback to determine how the product data and inventory of services could be better managed to seek the needs of the employees, suppliers, and customers. They did not make a thorough analysis of their 5-year business strategy to access whether the company requires new services or capabilities to achieve their strategic goals. They did not perform an adequate IT strategy, infrastructure, and IT infrastructure cost to determine whether the IT strategy takes into account the firm’s five-year strategic plan. Thus, making an assessment to determine where necessary changes in data management need to be done to improve the company’s efficiency.

Question #2: How did master data management address these problems? How effective was this solution?

Panasonic implemented a “push” model to replace a “pull” model to interpret and sort data. Using a push model, a centralized data bank sends the requested information to employees in marketing and sales instantaneously and consistently. Retail partners and e-commerce vendors who are recipients of the data can view the data at all phases of a product rollout. Thus, specific employees can have better visibility of their products and services. The outcome of this push model is that customers are less likely to become confused while researching Panasonic products. Panasonic’s Europe’s data management was upgraded with master-data-management (MDM) software from IBM’s WebSphere line. The software enabled Panasonic Europe to gain better control of their data and better streamline the business process. The MDM implementation includes the business process analysis, data assessment, data cleansing, and a master data service layer. The MDM allows employees with access to view the company’s data and activities throughout the organization. The outcome of the MDM implementation is that Panasonic Europe could expedite its products to customers much faster than before. The system resulted in an increase in company sales and profits.

Question #3: What challenges did Panasonic face in implementing this solution?

Although Panasonic Europe succeeded in gaining profits, Panasonic North America had challenges of reorganizing workflow and consolidating product information. Panasonics investigated product information for Wal-Mart. Panasonic looked closely at its legacy system to determine its required data. Panasonic worked with IBM to develop an interface apparatus to acquire the data for its repository. Since the information produced by legacy systems were not available in the legacy systems, then Panasonic needed to add newer interfaces then build an application-integration layer for Wal-Mart that could be proven successful.

Another challenge was that the company had multiple facilities that made its own new products. The facilities had their own culture and information infrastructure so they were not necessarily willing to share their data with a centralized database. However, Bob Schwartz made a strong case to the corporate office in Japan that integrating a data management strategy globally would be a major benefit to the company’s infrastructure. Schwartz also needed its manufacturer partners to agree with implementing the MDM technology. Schwartz succeeded in gaining substantial profits by integrating shared data inventory among the vendors such as Best Buy and Circuit City. As a result of the implementation of the MDM, Panasonic has become more competitive and can produce new products for their global market.