Within a week of the
end of a somewhat disappointing holiday shopping season, venerable retailer Montgomery
Ward shut down after more than a century in business, and one-time leading retailer
Sears closed more than 100 stores. These days, even the most vibrant retail stores
operate on razor thin margins, and wrong guesses about trends and customer tastes
can have an immediate and devastating impact on profits and ultimately, viability.
Perhaps more than any other business sector, retail companies must devote the
utmost attention to planning and analysis.
Retailers of all
sizes have made impressive gains in managing and responding to customer demand,
from point-of-sale (POS) promotions to merchandise flow. The rapid shift from
running cash register tapes to using data from the sophisticated POS computers
in today’s stores clearly illustrates how comprehensive collection and use of
information can increase sales and promote efficiencies.
Unfortunately,
while retailers have excelled at capturing vast amounts of data, they have often
overlooked the fundamental need to make sense of it all. While many retail organizations
have invested significant capital to implement unified, enterprise-wide platforms
for their operational systems, they have often neglected to provide an equivalent
unified platform for their business intelligence (BI) solutions. Even the largest
retailers still face barriers in using all this information for strategic planning
and deployment of resources beyond the current quarter.
In the increasingly competitive retail environment, successful retailers
will be those that employ truly integrated, enterprise-wide Business
Intelligence solutions based on collaboration, unified information and
common analytical applications.
The crux of the
problem is that many of these retail organizations lack an integrated BI approach
that can take data from disparate information systems, combine it in a centralized,
easy-to-access repository, and enable reporting, analysis and collaboration
based on common business rules. A basic definition of BI, defined as “any information
that pertains to the history, current status or future projections of an organization,”
illustrates the problem. Retailers have a strong command of sales history, but
where future projections are concerned, even the best chains often depend on
straight-line projections and guesswork.
Although there
is certainly no argument against acquiring “best-of-breed” systems to support
operational initiatives, without a common analytical layer across the enterprise
that supports the analysis of the data captured by these various transactional
systems, their effectiveness is limited. A common analytical platform that translates
that data into consistent, meaningful and actionable information can help retailers
to fully leverage their data across the enterprise. In today’s increasingly
competitive retail environment, retailers that employ truly integrated, enterprise-wide
Business Intelligence (BI) solutions based on collaboration, unified information
and common analytical applications will position themselves to reap the benefits
of this strategic approach.
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