Power of intelligence

Retail business has received the hi-fliers’ status with technological implementation in its every sphere. The human brain behind the business operation now allies with the rapidness of technology and the end result is quick and quality services, which is all about the retail business.

The retail domain is now experiencing a conspicuous metamorphosis as the retailers are aspiring to augment the business volume and on a spree to set up chains of retail outlets. This has made the retail operation complex with huge data base to handle. Business Intelligence (BI) is one such software tool that has the power to handle the immense volume of database and can be applicable to back-end as well as front-end operations of retail. “BI helps decision makers to harness the competitive advantages, achieve corporate objectives and make better decisions faster. With government policies becoming favourable and emerging technologies facilitating business operations, India is positioned as the most attractive market for modern retail investment. In order to augment their business potential and enhance their customers’ experience, both mid-sized and big retail players are investing in BI. With increasing deployment of BI in the business, the modern retailers have achieved greater efficiency, realised significant cost savings, and thereby enjoyed new business value”, comments Maneesh Sharma, Head-Business User & Platform, SAP India.

“There is little an organisation can do about external factors but there is lot, which can be done about the internal factors to increase profits. This depends on the ‘Business Intelligence’ and the insight that one gains by observing which of the regions is profitable, what brands are selling more, which stores have a higher sales volume, what is it that the customer buys and other similar measures.

All or most of today’s retailers in India do have a transaction system that captures sales information, purchasing information, sales return, warehousing details, price information, etc. To make sense of all this information is a complex task. To address this complexity and get a meaningful understanding of the data captured at various sources by retailers, BI and ‘Online Analytical Processing’ are key and they provide meaningful insight into the existing data showing existing patterns and future trends”, says Vikash Mehrotra, Director, Enterprise Performance Management & Business Intelligence, Oracle India.

Streamlining exercises

Today, BI is the key component of the customer retention mechanism apart from its applications in other spheres. “Increased interaction and sophisticated analysis techniques have given retailers unprecedented access to the mind of the customers, and they are using this to develop one-to-one relationships with the customers, design marketing and promotion campaigns, optimise store layout, and manage e-commerce operations. The other area on which a retailer needs to focus on is his supply chain. With third party logistics coming into play, an important criterion for success in the future would be the ability to harness worldwide distribution and logistics network for purchasing. This will ensure high levels of product availability that consumers want to buy”, says Mehrotra.

Sharma expatiates over BI’s benefits:

• Reduce costs in the whole business: Financial analytics, activity-based costing, benchmarking costs, using BI to help identify cost-saving opportunities
• Be more efficient: Providing teams the analytical tools to do their job quickly and effectively thus spending less time manipulating, more time analysing
• Get closer to customers: Monitor customer trends and patterns, survey customers, analysing their buying behaviour, focus and target business proposition to specific customers based upon their needs
• Get more out of their IT spend: Utilise existing investment to help deliver more valuable information from the data and systems
• Run a better ecommerce and multichannel business: Utilise BI technologies and techniques to bring information together from across the business - unifying multiple channels, multiple functions and getting a 360-degree view of the modern retail business 
• Increase transparency in the supply chain: Using collaborative tools to share information across organisational boundaries throughout the supply chain
• Develop more exciting stores: Utilising information and the Web2.0 experience to bring online and new-media experiences in the environment

A way to success

For many large organisations, success with business intelligence (BI) and information applications, such as enterprise reporting, requires a coordinated effort across the dimensions of people, processes, technology and data. To accomplish BI success, organisations should identify their need and align the solutions to address them. By matching the technical requirements to that of the business, the overall BI environment is more likely to deliver the desired results. The success of BI can be achieved through the following steps as Sharma refers to:

•  Identify the business functions and start from the bottom up to determine the reporting requirements of the various stakeholders in each of these business functions
• It is critical to thoroughly define architecture for each function to bring together in one platform. One should strive to develop a coherent architecture with a consistent set of tools and the right degree of integration.
• Organisations need to agree upon a collaborative process on building and integrating BI and Performance Management (PM) strategy.
• Enterprises need to build BI and performance management architecture as a best practice. Working with BI technology in silos or having a tactical approach can potentially lead to inflexible applications, inconsistency in delivery.
•  To fully leverage BI capabilities enterprises need to move beyond the dash board to include linking measures together with a cause-and-effect relationship
• It is advisable to define a model for demand planning and prioritisation across the enterprise. This can be done by establishing clear internal business roles, identifying employee strengths and skills, and assigning the right tasks
• Enterprises need to provide relevant and adequate developments programmes to build on core competencies

Identifying the right users

Mehrotra categorises the users along the following lines:

• Business analysts: Individuals whose primary role is to track, understand, and manage information in order to pass it on to others in the organisation. These users typically use the available products and features to their fullest extent, need to be highly autonomous, and have a need for both data breadth and depth.
• General knowledge workers: The role of these individuals is to make decisions and run the business. They make up the bulk of BI users. These users require information to make decisions, but compared to analysts, they usually need an interface that is easier to use, less powerful, and more narrowly focused on a particular data area.
• Executives and managers: Since these users have a wide span of control and ever-changing information requirements, they have a unique set of needs. They want breadth of data combined with ease of use and customisation. They typically want to see information based on key performance indicators, exceptions, and trends rather than detailed analysis. This is a relatively small segment of BI users today, but should increase rapidly in future with the growth of dashboards.
• Business partners: More and more organisations today need to treat customers, partners, and suppliers as users of their BI systems. Information delivery beyond the firewall is a rapidly growing segment of BI. These users typically need access to status and service level agreement information that allows them to work more closely in partnership with an organisation. Deployment is typically in a web-based environment, and the interface is usually customised to show a limited set of information in an easy, practical way.

Making the best use

Clever applications can bring out the best. Mehrotra puts forth that for BI success an education strategy must be created that includes:

• Tool training: Training on how best to use the chosen BI standards. BI software is typically very flexible, with several methods of getting to the same results. Novice users tend to stick to the features they know or simply transfer the data to a tool they know better (such as Excel), and so do not get the full benefit of the functionality available.
• Data training: This is probably more important than the tool training. Each user should get extensive training in what data is available and how it relates to their business.
• Knowledge sharing: Plans should be made to create a community of self-learning users that can share best practice.

Over time BI has acquired significance in wider sense. Sharma rightfully points out BI’s status elevation from being a support system to mission critical applications in retail. Retailers are looking beyond reporting capabilities to application that synthesise information from a wide variety of systems and analyse performance - of sales margin, supplier delivery times, promotion effectiveness, allowing them to react more effectively to business insights.