Ingram Micro is the world's largest twotier distributor of technology products. In a twotier distribution system, a company purchases products from manufacturers and sells them to retailers who in turn sell these products to the end users. For example, one can purchase a Microsoft Office 365 package from Ingram rather than purchasing it directly from Microsoft. Ingram has partnerships with Best Buy, Buffalo, Google, Honeywell, Libratone, and Sharper Image. The company delivers its products to 200,000 solution providers across the world and thus has a large volume of transaction data. Ingram wanted to use insights from this data to identify crossselling opportunities and determine prices to offer to specific customers in conjunction with product bundles. This required setting up a business intelligence center (BIC) to compile and analyze the data. In setting up the BIC, Ingram faced various issues.
1. Ingram faced several issues in their datacapture process such as a lack of loss data, ensuring the accuracy of enduser information, and linking quotes to orders.
2. Ingram faced technical issues in implementing a customer relationship management (CRM) system capable enough to handle its operations around the world.
3. They faced resistance to the idea of demand pricing (determining price based on demand of product).
Methodology/Solution
Ingram explored communicating directly with its customers (resellers) using email and offered them discounts on the purchase of supporting technologies related to the products being ordered. They identified these opportunities through segmented marketbasket analysis and developed the following business intelligence applications that helped in determining optimized prices. Ingram developed a new price optimization tool known as IMPRIME, which is capable of setting datadriven prices and providing datadriven negotiation guidance.
IMPRIME sets an optimized price for each level of the product hierarchy (i.e., customer level, vendorcustomer level, customersegment level, and vendorcustomer segment level). It does so by taking into account the tradeoff between the demand signal and pricing at that level.
The company also developed a digital marketing platform known as Intelligence INGRAM. This platform utilizes predictive lead scoring (PLS), which selects end users to target with specific marketing programs. PLS is their system to score predictive leads for companies that have no direct relation with end users. Intelligence INGRAM is used to run white space programs, which encourage a reseller to purchase related products by offering discounts.
For example, if a reseller purchases a server from INGRAM, then INGRAM offers a discount on disk storage units as both products are required to work together. Similarly, Intelligence INGRAM is used to run growth incentive campaigns (offering cash rewards to resellers on exceeding quarterly spend goals) and crosssell campaigns (emailing the end users about the products that are related to their recently purchased product).
Results/Benefits
Profit generated by using IMPRIME is measured using a lift measurement methodology. This methodology compares periods before and after changing the prices and compares test groups versus control groups. Lift measurement is done on average daily sales, gross margin, and machine margin.
The use of IMPRIME led to a $757 million growth in revenue and a $18.8 million increase in gross profits.

Questions for Discussion
1. What were the main challenges faced by Ingram Micro in developing a BIC?
2. List all the business intelligence solutions developed by Ingram to optimize the prices of their products and to profile their customers.
3. What benefits did Ingram receive after using the newly developed BI applications?