IT services and solutions for retail and hospitality

  • 20 Jun 2009

Getting the best from BI and CPM technology

Nigel Illingworth

It’s not uncommon for retailers to invest in Business Intelligence (BI) and Corporate Performance Management (CPM) software, only to be bitterly disappointed. These tools are purchased in the belief that they can be used by end-users, independently, to gain timely and efficient access to data. The reality is that they are often no more than raw components that bring with them an IT overhead of programming, integration and support.

Here, Nigel Illingworth, Retail Assist’s Product Director for the Merret supply chain solution and Dominic Policella, Managing Director of BOARD, challenge the current BI paradigm, advocate the “retail-ready” approach, and suggest ways of getting the best from BI and CPM technology.

Look for integration

Many BI systems are sold as toolsets, comprising disparate modules such as budgeting, reporting and dashboard, on the promise that the created model will be just right for the business requirements. In reality, these modules – often the result of company and product acquisitions – can come with huge integration issues, long project timescales, high costs and little flexibility to support change. So, retailers should look to have everything in one integrated environment.

Ease of use is critical

“Most BI platforms are difficult to use, technical and inflexible,” says Nigel Illingworth. “As a result, they are often kept in the hands of a small number of power users and technicians rather than the wider business community who should be their consumers and beneficiaries.”

A BI tool needs to be intuitive to use, and to provide fast and accurate answers to organisations that are starved of information. This is where programming-free environments come into their own, offering rapid familiarity to end-users and enabling them to operate independently.

If the solution is modular, it may take some time to model data and craft reports. The best approach is to buy a system that comes with existing reports “out of the box”, tailored to the retail industry. Even if not precisely what you require, this will facilitate much faster report creation and deliver faster business benefit.

Retail-ready intelligence

Nigel Illingworth observes: “BI tools are very valuable to a fast-moving industry sector such as retail, where it’s necessary to look constantly at how the business is performing, monitor the effects of sales campaigns, benchmark market penetration and measure store and product profitability. A generic tool is simply not up to the job, so retailers should look for BI systems that come with the appropriate retail ‘wrapper’ that both delivers standard, retail-ready reports and offers easy customisation.”

Focus on KPIs and exceptions

It’s important to differentiate data that you need for information purposes only from data that can be used to make a difference and instigate change. Use of BI should be driven by key performance indicators (KPIs), with emphasis put on highlighting exceptions. KPI thresholds should be easy to define and display, with graphical representations such as gauges, traffic lights, colour coding and maps. At the same time as revealing the big picture, BI tools need to drill down to pockets of problem performance. An example would be to look at stores that aren’t performing, then to drill down to the lack-lustre products within those stores.

One version of the truth

“BI can represent a single, audited source of information, ‘one version of the truth’ and, as such, is critical to a business,” explains Dominic Policella. It should support both analytical and real-time data and deliver a ‘scorecard’ encompassing different areas of the business, (Financial, Operational, Sales, Customer). It should also be able to alert users when certain business criteria have been hit, notifying them by e-mail or text message, without the need to be connected to the system.

Looking back, looking forward

It’s important too that BI doesn’t just reveal historical information, but also integrates and manages the Budgeting, Planning and Forecast data needed to drive the business forward. The best BI and CPM tools enable users to model and adjust against plan. In a competitive market such as retail, accurate planning can make a huge difference to profitability. For example, retailers can look to BI to run ‘cost to serve’ models and work on integrated sales and operational planning to create value and savings across the supply chain.

Pitfalls and disappointment

Trying to do too much too quickly is a common source of disappointed. This is why an integrated tool that supports all areas of BI and CPM is important. Concludes Dominic Policella: “Many projects just don’t achieve the results anticipated, often due to the complexity of the system, and so users give up and revert to spreadsheets. BI systems should be simple and rapidly deliver results to the business community. It’s also important to be able to easily integrate new sources of information and to change BI models as user requirements evolve.”

Cardinal rules

In summary, the cardinal rules for getting the best out of a BI system are:

  • Invest in a ‘retail-ready’ product which will get you up and running straightway
  • Make sure that business users are involved in the tool selection as well as in defining requirements, and have continual input
  • Look for flexibility. Your chosen system should be able to rapidly support changing business requirements
  • Home in on tools that are fast and easy to use
  • Select an integrated tool, not a mixture of modules from the same vendor which may cause integration issues down the line when the initial scope needs to be extended
  • Make sure the system can support budgeting/planning/forecasting as well as performing historical analysis.

Merret is a complete supply chain ERP solution, widely used in retail. Users can opt for an integrated BI and CPM module that is powered by specialist technology from BOARD, or purchase Merret BI & CPM as a standalone solution.

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