What is the role of hardware and software in Coca-Cola's Freestyle system? Which specific types of hardware and software can you identify in this case? How does the Freestyle dispenser help create competitive advantage for Coca-Cola? What is data and what is information for Coca-Cola in this case? RFID-Based Dispensers Redefining BI For Coke C oca-Cola doesn't think its customers have enough drink choices. So starting this summer, diners at some California, Georgia, and Utah fast-food joints will get to try a self-serve drink dispenser that pours more than 100 varieties of sodas, juices, teas, and fla- vored waters. Coke plans to roll out the Freestyle drink dispenser nationwide, eventually putting tens of thousands of them in places such as McDonald's, Burger King, and Willie's Mexican Grill. And while the machine is taking the concept of customer choice to new heights, the most interesting aspect is the technology it's built on. Freestyle will become Coke's front-line robotic army for business intelligence, sending massive amounts of consumption data back to the beverage company's Atlanta headquarters. a lot cheaper than the model Coke's been using: bottling and bringing to market new products that sometimes don't gain traction and get canceled after a year or two. "This is a huge jump from our current fountain dis- pensers," says Christopher Dennis, Coke's IT director of e-business trans- formation. "It's like going from the dial phone to the BlackBerry" No Comparison There's more to Freestyle than streamlining product development. It also will let Coke provide its fast-food outlet customers with more accurate inventories of the beverages they serve. Outlets leasing the machines from Coke will be able to view graphical drink consumption reports-such as ones that rank drinks sold during spe- cific time periods-on an e-business portal Coke has set up. Most fast-food restaurants collect data using point-of-sale systems that only capture beverage cup size and the number of cups sold each day Those that collect more specific data on bev- erages customers order aren't always accurate, since many customers change their minds between the time they place their orders and walk over to the drink dispenser. Freestyle will let Coke more easily test new drink flavors and new bever- age concepts, such as adding various vitamin combinations to flavored wa- ters and juices. The dispensers each contain 30 cartridges of flavorings that mix up 100 different drink combina tions. The cartridges are tagged with radio frequency ID chips, and each dis penser contains an RFID reader. The dispensers collect data on what cus- Besides collecting data on what cus- tomers are drinking and how much,,tomers are drinking, Freestyle also and transmit that information each night over a private Verizon wireless network to Coke's SAP data warehouse system in Atlanta. The company will use the data to develop reports that assess how new drinks are doing in the market, identify differences in regional tastes, and help fast-food outlets decide which drinks to serve. Test marketing via Freestyle will be lets Coke know what flavor cartridges each dispenser holds, so the company can advise outlets on when to order more. Coke also will use the wireless network to send out new drink formulas to the beverage machines with instructions on how to mix them up. And should the soda company ever need to recall a llavor cartridge, the network also lets it instantly dis Refresh, refuel, and download some data able dispensers across the nation. Coke plans to have about 60 dis- pensers in Atlanta, Salt Lake City, and Orange County, Calif., by the end of the summer. The dispensers will then be rolled out in other regions of the United States, and perhaps globally. Dennis says Dennis describes the Freestyle ma- chine as the company's first software- driven dispenser. It's been in develop- ment for four years, and it's the first close collaboration between Coke's R&D engineering team and IT organi zation. Soft drink purchases have been declining at fast-food outlets in recent years, and Coke is looking to Freestyle to increase sales by giving customers more beverage choices. Coke is closely guarding engineering details of the machine, going so far as to manufacture the system at its own plant Beverage machine makers usu ally approach Coke with new ideas We came up with this on our own," Dennis says He declined to provide details on Coke's investment in the machines, the cost to outlets to lease them, and the cost of cartridges Some fast-food chains