RSR Research: An Enterprise-wide BI Strategy – Why it Matters

Through a special arrangement, presented here for discussion is a summary of an article from Retail Paradox, Retail Systems Research’s weekly analysis on emerging issues facing retailers.

Even though 85 percent of respondents to our Business Intelligence (BI) benchmark survey in 2011 reported some activity in developing an enterprise-wide BI strategy, it occurred to us that this might be a good time to explain exactly what we mean by the term and re-iterate once again why it’s a good idea.

Let’s start with "why it’s a good idea." When correctly executed, an enterprise-wide BI strategy can solve a lot of seemingly intractable problems, get the entire organization "singing from the same hymnal" and postpone ripping and replacing core systems for a long time. It can relieve a lot of pain.

What kind of pain? Here’s a short list of legacy problems that can be solved:

  • The merchandising hierarchy we have is incomplete, incompatible with newer systems, or just plain out-of-date.
  • Everyone is operating with different sets of numbers.
  • Each channel has separate product descriptions and other qualifying information.
  • We have multiple versions of customer data truth.
  • We need to measure everyone by the same yardsticks, and satisfy new reporting requirements.

So those are our pain points, but what exactly does creating an enterprise-wide BI strategy actually entail?

The successful enterprise-wide BI strategy will have several critical components:

  • Infrastructure: Hardware is now available to support "Big Data." Build the integration bridges from operational systems directly to the data warehouse.
  • Executive Involvement: Business users are ready and willing to become engaged. They’ll even talk about infrastructure issues since they recognize the importance of overcoming them.
  • A Roadmap: An enterprise-wide strategy should include a step-wise approach to adding incremental value with BI and its associated outputs. Think about appropriate hardware platforms, data transformation tools and techniques, and layering in reporting, alerts, and finally advanced analytics that are retail-specific solutions.
  • A Wireless Plan for Stores: Even the best insights will lose value if they’re not delivered in a timely fashion to the people that need them in the field. The time is now to put a wireless infrastructure in place. Customers can use 3G and 4G to educate themselves. Retailers will need the wireless infrastructure for store managers and employees. Letting customers "hop on the bus" will just be a plus.
  • Modern Delivery Vehicles: The days of desktop dashboards and flash reports are drawing to an end. "Consumer grade usability" has become the order of the day. No one gets a user manual with consumer apps. BI can be equally as simple. Plan for simplicity as an output of back-office complexity.

The task isn’t simple and it will take some time. But when you’re done, you’ll have the extensible framework you need to go forward in our rapidly changing times. New channels, new types of customers, and more specificity are all expected, but not anticipated. Enterprise-wide BI can help us meet the challenge.

BrainTrust

Discussion Questions

Discussion Questions: What are the obvious and less obvious benefits of BI for retailers? What is the most challenging hurdle that needs to be overcome for BI to flourish at retail?

Poll

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Cathy Hotka
Cathy Hotka
12 years ago

BI is a frequent topic at the CIO dinners I manage. Nearly every retail participant who has attended recently had acknowledged all of the pain points listed above, with no clear consensus on how to address them. It’s fascinating to listen to.

Adrian Weidmann
Adrian Weidmann
12 years ago

Understanding data and translating that data into a relevant and personal conversation with your shoppers is the value in business intelligence. Leveraging customer data simply to ‘flog’ more stuff at them is exactly the wrong approach. Customers and shoppers need to be respected in order to bring more value to your brand. Looking over their shoulder and forcing another coupon into their hands will not enhance your brand value — rather it will tarnish your brand.

The overarching challenge is getting your entire enterprise and its culture to understand the sensitivities associated with communicating with the new empowered and connected shopper and customer. Finding a respectful balance with BI and translating that insight into a personal, relevant and pragmatic dialog with your customer is a challenge without resorting to just presenting coupons or ‘old school’ tactics. Be innovative — the connected consumer certainly is!

Lee Kent
Lee Kent
12 years ago

Having been in the retail industry for some 35 years, these issues have always been at the forefront, although the actual components have changed. As new types and forms of technology have come along and the expense of ripping and replacing too high, retailers have simply cobbled in new technologies, leaving the infrastructure with many versions of the truth. I believe this makes possible a huge play for SaaS as well as managed services in our industry, and expect to see more and more retailers moving in that direction. Retailers want to cut back on huge up-front outlays, and enjoy some relief in technology management while getting the results they need. One playbook!

So while the strategy Paula lays out is right on, retailers are slow to jump into this knowing that technology is going to continue to change. When and how remains unknown. So if we give them more options to shove things off their plates and focus on their brand uniqueness, this might get them moving in the right direction.

Martin Mehalchin
Martin Mehalchin
12 years ago

As I have said before in other discussions, business intelligence is something that most online pure-play retailers do very well. So what’s different this time around, as opposed to the last 35 years, is that a strong business intelligence roadmap and capability has become a competitive imperative for multi-channel retailers who want to survive and thrive.

Mark Heckman
Mark Heckman
12 years ago

I can relate to and support every point that Paula Rosenblum cites from RSR’s recent BI research. Most of us have experienced many of these pain points within an organization that layered patch-work solutions on top of legacy systems. While these disparate systems may have been rigged to work together at some functional level, they were never designed to provide enterprise-wide users the same view of important data.

As business evolves and becomes more integrated, departments within the company have an increased need to talk to each other, share reports and most importantly have a “single view” of their customers. The latter issue is a real priority for any company purporting to be in the customer relationship business, as customers have many more engagement points today than in years gone by.

But as the research indicates, it all begins with a BI strategy that every division, every department, and in the case of retail, every store, needs to understand. With a strategy in place, tough decisions can be made as to where to begin to trash the old systems and bring in the new. This kind of transformation in iterative and will take years not months…but for those that have delayed the process, you are indeed “late to the party”!

Ralph Jacobson
Ralph Jacobson
12 years ago

I, too, having more than 30 years in the biz have seen the desire for more actionable insights derived from the flood of data available, both structured and unstructured. Newer BI tools have tangible ROI versus those of past years and can deliver real results to help facilitate better business decisions. Generally speaking, BI platforms that are tightly integrated deliver quicker results. A BI platform with strong integration reduces the amount of custom integration and duplication required to build BI applications; streamlines BI content authoring, administration and security; and incorporates related technologies into the broader information infrastructure.

Retailers need to understand what BI is and what it isn’t. Once the business executives at the retailer have an understanding, then the right tools can be leveraged effectively. This needs to be a more business process discussion, rather than a technology purchase discussion.

Tim Callan
Tim Callan
12 years ago

I agree that consumer-grade usability is key. The amount of data that can be extracted from a modern-day retail chain is breathtaking. None but a few analytics professionals will have time, tools, skills, or inclination to dive deeply into complex data sets and tease out actionable insights. Instead we believe in providing intuitive, simple data visualizations that managers can use to discover the key insights they need to improve the bottom line. At the same time, the deeper data can still be available for any analytics professional who needs them.

Larry Negrich
Larry Negrich
12 years ago

I have been disappointed in the execution of BI/Performance Analysis/EIS/BIS/etc., in retail over the years. That’s because BI efforts seemed to be focused on viewing and sharing analytic results, making great looking reports, but coming up short in business value. Actionable intelligence delivered according to per-established success/failure scenarios enterprise wide, meaning same data across the enterprise is an attainable goal with today’s solutions.

The challenge is the octopus-architecture (I’m so tired of the “spaghetti” comparison) for many retailers. Thankfully modern, robust BI solutions can play a major part is reducing the complexities associated with archaic systems and multiple data types and sources.

M. Jericho Banks PhD
M. Jericho Banks PhD
12 years ago

Being from an agricultural state, Kansas, and having spent my fair share of time cultivating crops and livestock, I know the value of getting ready. Of preparing the fields and the herds before sowing seeds of any kind.

BI is really cool and I was fascinated by Paula’s comments. But I’m reminded of the Book of Daniel in which the King of Babylon, Nebuchadnezzar, had a dream about his kingdom. In the dream Babylon appeared as a huge statue made of several kinds of strong materials — with the feet made of clay. At the end of the dream, a “hand” used a rock to smash the feet of clay. The quintessential definition of a weak foundation.

So, retailers, before you invest in BI, make sure your organization is ready, capable, and enthusiastic. And for Paula and RSR, take a close look at the retail organizations you pitch. Not everyone is ready.