Every business needs to gather information and to make informed decisions based upon it. In-house systems can provide an operational insight from the data they produce if this can be consolidated, analysed and presented in the way that the business needs.
If data can then be turned into meaningful information, it can highlight areas of success and failure, and reveal whether the business has its supply and demand in balance. Most importantly, the right information can reveal where improvements can, and need to, be made.
Our experience of working with retailers reveals that they fall into two camps: those who require only top-level detail, and those who want to know the DNA of everyone and everything that makes up the business.
Some retailers are highly season-driven and others run with more stable stock lines. Differences apart, they are united by the need for flexibility and responsiveness and by the imperative to understand their business and react to change appropriately.
Getting information right is a challenge. Businesses invariably generate too much or too little. The starting point should be some corporate soul-searching. Retailers need to define what type of business they are and what they need to know about themselves. Having established their wants and needs (not an easy task, as business functions and IT often work to different agendas), only then can they build a consensus view of what is required.
Whilst Business Intelligence represents the only reliable basis upon which to make decisions, (provided it is reacted to and used effectively), expectations need to be realistic. Just as systems dont make a bad retailer good, the right business information will not be generated if the business doesnt know where it is going.
Todays systems can create a wealth of data, but this will only become meaningful information if it is aligned with the processes that the business has erected to support its key performance indicators. We often come across a lack of clarity at all these levels: the KPIs, the processes to support them, and the information to report on them.
So how does data turn into information, and then into Business Intelligence? Retailers often believe that they have the tools they need to produce Business Intelligence, whereas in fact they are simply generating data. In-house applications such as supply chain and merchandising may accurately record point-of-sale transactions and stock movements, but this is not enough.
Where a number of systems are operated, each will independently produce reports. To get a true picture of the business, its important to integrate different data sources and consolidate the data and reports that each produces, at the same time filtering out unwanted elements.
Retailers seem to be at one of three stages of development. The first is where each function relies upon a plethora of paper-based reports and spreadsheets that have evolved over time. Often build to meet specific needs, they rarely keep pace with the business. Their flexibility is their downfall and they can be the source of disconnects and misunderstandings as individuals model data differently and arrive at different answers.
At a more sophisticated level, the retailer may have created interfaces from In-house systems to external Business Intelligence products, based on data extraction. Whilst this is an improvement on the spreadsheet and paper-based model, system interfacing can absorb management time and create confusion.
The third and most desirable stage is to embed Business Intelligence as an integrated and universal function. This enables users to gain reliable data directly from their mainstream applications.
Under this scenario, disparate data sources are brought together and programmed to produce a true snapshot of business performance, across the piece. By eliminating data fragmentation and providing answers based on correlation, cross-referencing and number-crunching in a way that no human can, Business Intelligence offers clear pointers to performance improvement in a quick and easy way.
About the Author:
Alan Morris is Managing Director of retail-only solutions and service provider, Retail Assist. He can be contacted at firstname.lastname@example.org
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