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At Procter & Gamble, Toothpaste Is Data

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Every Monday Procter & Gamble’s leadership gathers around an oval table on the sixth floor of the company’s Cincinnati, Ohio headquarters. The room is lined by two enormous and curved screens. This is the soapmaker’s “Business Sphere” and, like a philosopher’s stone, it provides a view into the 4 billion times each day that P&G products are used in more than 80 countries. In four clicks on an iPad it’s possible to change the screen from a view of a world map to a graph of toothpaste prices in India and a sales comparison that shows local brands are gaining share. Three clicks on a laptop bring up a view on another screen of shampoo sales in Australia. It’s immediately apparent that P&G will need to sell 585,000 more cases of shampoo for sales to be flat. On one screen indicators suggest big opportunities for hair care in Germany and pet food in the U.S.

The Business Sphere was turned on earlier this year. It’s the sum of 14 different technologies from multiple vendors, and from the first day P&G’s leaders began using it the data shown in this room have become the same data used by managers in some 40 locations worldwide (just not as fancily displayed). Aligning these numbers means that everyone knows and can agree on target countries, regions or products for particular attention. Everyone can judge progress toward the plan and against the competition, in some cases even down to individual retailers.

Procter & Gamble, the world’s biggest consumer products company, continues to be one of the leaders in the race to harness massive streams of data for managing a business better. The company has been profit-forecasting on a monthly basis for about 40 years, trying to predict components such as sales, commodity prices and exchange rates. But the amount of real-time data it has been able to process has increased vastly in the past three years, thanks to better software and Moore’s Law of increasing computing power. Now P&G borrows liberally from tools born on the Web: ubiquitous high-speed networking, data visualization and high-speed analysis on multiple streams of information. The tools allow P&G to make in minutes the decisions that used to take weeks or months, when data had to be collated and passed through committees on their way to the top.

With $79 billion in sales and 127,000 employees, P&G is on the verge of having everyone’s talents known and tracked, all information about sales decided at the executive level every week and production viewed in near real-time worldwide. The company talks in terms of increasing the amount of collected data sevenfold. The airy promises of networked technology are here, at a scale rarely, if ever, deployed before.

P&G has just started a “digital skills” inventory of its employees, establishing a baseline of skills, including how to get connected to the Internet, how to use basic collaboration and knowledge-exchanging tools for online meetings and mail, and how to tap into the company’s internal social network, P&G Pulse, for news and further training. There are higher expectations for more technical jobs, of course, or in grooming certain careers.

In one early pilot the P&G tech team figured that field salespeople gained 1.5% in revenue if they came to the customer with an iPad that could show the layout of different floor displays. Similar machines on the factory floor, able to take pictures of problems and replace paper filing systems with searchable databases, improved productivity by up to 20%. There are mobile apps for top managers to view reports, approve spending and get an alert when something goes off the rails, wherever they are.

The push is part of Chief Executive Robert McDonald’s goal to make the company fully digital. In an internal video introducing the initiative, McDonald walks his colleagues through his office, opening desk drawers to show he works without paper. “The idea is to be digital from the laboratory molecule to the store shelf,” he says.

Of course the quality of data can vary. “I used to work in China, and the one thing you knew when someone said, ‘We have a 22.5% market share’ was that the figure wasn’t right,” says Jeffrey Goldman, the statistician who sits in at the weekly Business Sphere gathering. “But it gets better over time, and it isn’t massaged on the way up.”

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Chief Information Officer Filippo Passerini has identified 81 core business traits, like sales and finance, that run P&G, plus the tens of thousands of other routines inside them. Through standardizing how these are done and searching for cheaper ways to do them, he figures, the company will have saved $1 billion between 2003 and next year.

In an “Immersion Lab” a few floors above the Business Sphere, employees test out working across time zones on wall-size video screens, and projecting business and social network information on man-size “holopanes” of glass. There is a mock hotel room where managers try out a score of different mobile devices, building confidence in working anywhere on the kind of tablet or phone they like. “Three to five years from now everyone is going to be bringing their own device to work anyway,” says Passerini. “We want to turn that information technology problem into a business opportunity.”

The tour ends in what Passerini calls his handshake room, big enough for 20 chairs. There are two screens along one wall. One of the screens, about 8 feet on a side, shows blank store shelves onto which can be projected 3-D images of any P&G product you might want to stock in any size or label configuration. A smaller high-definition monitor can show store interiors of big retailers such as Wal-Mart and Safeway. P&G can insert into these views any new store display it has so buyers can check out the look and the effect on store flow. “We ask them a business case, we show how we solve it, we make a sale,” he says. This may not sound like it would make a big difference, but 80% of all batteries (P&G owns Duracell) are sold off of in-store displays. Getting retailers to take a new one is a big deal.

See more stories from the Data Driven series on Forbes:

Wal-Mart Plays Nice (Again) With Its Checkout Data

Visualizing The Data Visualization Community

American Express Dives Into Social Commerce, Analytics