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Case Study

 

Keurig Green Mountain Brews Up Data Governance

by Ken Murphy, Senior Features Editor | insiderPROFILES, Volume 7, Issue 1

January 6, 2016

Keurig Green Mountain

Quench your thirst for an interesting data governance project by reading about Keurig Green Mountain’s new master data management (MDM) organization. As it migrated to SAP ERP after outgrowing a legacy ERP system, Keurig Green Mountain wanted to ensure a solid foundation of business process discipline to allow for continued growth and expansion. With the MDM organization overseeing data governance, the company was able to document rules and develop standards to ensure data quality and adherence to global standards.

According to the National Coffee Association, 25% of coffee drinkers in the US regularly use a single-cup brewing system, whereas only 7% favored this method just four years ago. As the US single-cup market leader, Keurig Green Mountain provides the majority of those coffee-loving consumers with both the single-cup brewing system and the coffee it brews. In fact, more than 25% of all coffee consumed in the US comes from a Keurig Green Mountain single-serve K-Cup pod, up from 6% four years ago.1

This has led to meteoric growth for the company, both from a rapid surge in sales as well as an increase of partnerships with a multitude of vendors such as Starbucks, Dunkin’ Donuts, and Newman’s Own to package and sell their brands in K-Cup pods. With this expanding family of partners, Keurig HOT and Keurig KOLD beverage systems now dispense more than 80 brands and more than 575 beverage varieties.

With fast and consistent growth over the last decade — fueled in large part by Green Mountain Coffee Roasters’s 2006 acquisition of Keurig — the company outgrew its legacy ERP system and, in 2013, opted to migrate to SAP ERP. In parallel with a data migration to SAP ERP, Keurig Green Mountain (renamed in 2014) decided to undertake an ambitious data governance project. By setting up a master data management (MDM) organization and implementing well-defined processes and standards for data maintenance across the organization, the company could ensure its data cleansing efforts as it migrated to SAP ERP would not be wasted moving forward as it continued to gain more partners — and thus more data.

 “We were growing at such a dramatic rate, we needed to build a solid foundation and develop business process discipline to allow for continued growth as well as global expansion,” says Eileen Hanafin, Director of Master Data Management Business Process for Keurig Green Mountain. “The move to SAP ERP aligned with our strategic direction, and centralizing the management of our master data was part of that.”

Keurig Green Mountain

Headquarters: Waterbury, Vermont

Industry: Consumer packaged goods

Revenue: $4.2 billion (2015)

Employees: 6,600

Company details:

  • 80+ brands and 575+ beverage varieties
  • 400+ employees are engineers and scientists, and 35+ are licensed by the Specialty Coffee Association of America as “Q Graders” and qualified as professionally trained “cuppers”
  • Green Mountain Coffee Roasters began as a specialty roaster and coffee store in Vermont (in 1981); went public (in 1993); acquired Keurig, Inc. (in 2006); and then changed the company’s name to Keurig Green Mountain (in 2014)
  • www.keurig.com
  • NASDAQ: GMCR

SAP solutions:

  • SAP BusinessObjects Information Steward
  • SAP Data Services
  • SAP BW
  • SAP ERP
A Fresh Approach

Before Keurig Green Mountain ramped up its partner agreements — in 2011, the company partnered with both Starbucks and Dunkin’ Donuts — it relied on what it called the “hero culture” for data governance processes. Essentially, disparate groups of data providers would set up data they were responsible for, whether it was customer records, vendor records, or material master data, and then the department receiving it — such as shipping or manufacturing — would correct any inaccuracies to ensure the right orders were placed, items shipped, or product produced. The “heroes” were so-named because of their extraordinary value to the company for owning a particular business process.

At a time when the business was primarily focused on pursuing growth opportunities, this was more than adequate to ensure smooth operations. However, because downstream data fixes didn’t always make it back to the data providers, the process wasn’t repeatable. “Having different groups of people with that hero culture expertise going in and fixing the data for their specific business process also meant that data governance was limited,” says Hanafin.   

By setting up an MDM organization, Keurig Green Mountain could ensure a centralized team had visibility into all master data, and then build processes, document rules, and develop standards. “We transitioned from a data maintenance to a data governance organization,” says Hanafin. “We still have data providers and data consumers, but now that we have centralized management of our master data in one team, we can develop quality scorecards to rate data quality and better adhere to global standards.”

A Clean Start

For additional data governance support during its SAP ERP rollout, Keurig Green Mountain turned to DATUM LLC for help with aligning new business processes within a data governance framework. This was important, according to Hanafin, to ensure that as the volume of SAP data increased, the company wouldn’t revert back to disparate data management and thus lose its newfound efficiency and gains from its SAP ERP rollout.

“DATUM helped confirm our strategic direction around governance and validated our vision of where we were heading,” says Hanafin. “They leveraged their Information Value Management platform to tie the governance project to the actual migration. Aligning the two pieces is important because you can cleanse and migrate all your data, but if you don’t have the processes in place to keep it clean, you’ll eventually question whether it was worth it; you’ll wind up in the same place.” (For more information about DATUM, see the sidebar at the end of the article.)

Setting strict data governance rules and processes in parallel with the migration ensured continually trustworthy information and a quicker path to value. To maintain reliable data as its SAP environment matured, Keurig Green Mountain implemented SAP BusinessObjects Information Steward and created a data steward role for users of the application to govern data hierarchies. SAP Data Services was used extensively in the data migration from the legacy ERP environment to SAP ERP, transforming the data based on rules.  

With SAP BusinessObjects Information Steward, Keurig Green Mountain could ensure company-wide reporting consistency; this allowed data stewards to monitor changing data and verify those changes rolled up to the MDM organization. This is especially critical for Keurig Green Mountain as both a business-to-business (B2B) and a business-to-consumer (B2C) enterprise with constantly changing business structures to accommodate growing diversity in its retail and consumer channels. 

Reactive to Proactive

To take the first step in a transition to active data governance, the MDM organization has implemented data quality reports through SAP BusinessObjects Information Steward. As data is collected, the tool automates consistency by alerting users to missing required fields. This functionality lessens the dependency on the aforementioned hero culture, and helps minimize after-the-fact fixes downstream.

Eileen Hanafin

Eileen Hanafin, Director of Master Data Management Business Process, Keurig Green Mountain

We needed to build a solid foundation and develop business process discipline to allow for continued growth as well as global expansion. The move to SAP ERP aligned with our strategic direction, and centralizing the management of our master data was part of that.

— Eileen Hanafin, Director of Master Data Management Business Process, Keurig Green Mountain

 “The MDM organization doesn’t own the data; we govern the data,” Hanafin says. “Part of our responsibility is to educate our data providers so they know exactly what to provide and when to provide it. Automated workflows will help drive better data quality.”

With better data quality comes more informed business decisions because data consumers will have more trust in the data that is driving the business process. And, with master data centralized, the company can count on repeatable processes. Improved trust and visibility aids the shift toward an active data governance model because reducing one-off data fixes means a likewise reduction in repeated errors.

Claire Doyon, Technical Director of the MDM organization at Keurig Green Mountain, says, “We now have more visibility into data issues because, in the past, fixes might not have been communicated back, which risked the same mistakes being repeated. But now, the governance organization can drive to the root cause of how mistakes happen and ensure they don’t happen again, which translates to fewer data issues.”

Creating the Perfect Blend

Keurig Green Mountain brought its order-to-cash processes and corporate financials live on SAP ERP in September 2014, at the start of a phased process rollout for its Keurig HOT beverage business. Keurig KOLD was brought into SAP ERP at the end of May 2015 in preparation for the 2015 fall launch.

The company is now just about two years into the start of its data governance initiative, a project it estimates will take until 2020 for fully automated and completely proactive data governance where the entire company culture is aligned to data strategy and standards.

 “That timeline is to achieve optimal business value,” says Hanafin. “We have a consistent approach to business processes and uniformity across our systems. So while it has absolutely been successful across various business functions, our future state will move toward more standardization and automation capabilities with a focus on continuous improvement.”

DATUM Delivers Keurig Green Mountain a Bold Data Governance Plan

DATUM LLC is a business-focused information management solutions company based in Annapolis, Maryland. DATUM untangles the hybrid enterprise through advisory services and its software-as-a-service (SaaS) platform called Information Value Management. By bridging the gap between business value and data, this platform helps enterprise businesses seize the power of their data and transform it into competitive advantage and profitability.

Keurig Green Mountain, like many other organizations, struggled to balance its ERP rollout with data governance initiatives. DATUM delivered a common set of business processes with a data governance framework that would support Keurig Green Mountain’s goal of implementing a unified SAP ERP system. In order to establish a data governance framework, DATUM leveraged Information Value Management to define data standards and rules and implement work streams for operationalizing critical data governance processes, policies, and roles. This framework helped Keurig Green Mountain identify, capture, and measure critical master data governance-specific inputs to avoid delays and successfully deliver on business objectives.

DATUM is widely recognized as having an expert perspective on elevating data management maturity to support improved business performance and growth strategies. Large enterprises with global requirements have made the DATUM methodology and Information Value Management platform an integral part of their value realization programs for enterprise information management.

To learn more about DATUM LLC, visit www.datumllc.com.

DATUM

1 See www.statista.com/topics/2219/single-serve-coffee-market/. [back]

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