Do retailers need better business intelligence tools or a better analytic strategy?
Most retailers still use Excel for data analysis. Looking back to the days of Business Objects, Cognos and Brio, many tried business intelligence software with the promise of doing something more valuable than what is possible with a spreadsheet — make better decisions.
Despite this, shelfware conversations were rampant in those days.
It’s fascinating how even today most companies report struggles with data analysis. Managers say:
- It’s too hard;
- The right data is not available;
- IT has to be involved, and they are intractable;
- Aggregated data just tells you what happened — not what’s going to happen or what you should do about it;
- We can’t take action on our analysis.
Human nature may be at work here. Expectations escalate in relationship to how well a manager leverages analytics to improve performance. Analytic excellence also depends a lot on information architecture. So maybe IT is at fault?
What’s missing here is what is now proven: data-driven excellence starts at the top, with a CEO who values and has at least a conversational knowledge of modern analytics, such as artificial intelligence.
At a conference earlier this year, I started a talk with a quote from a ZDNet article — “There’s gold in them thar databases.”
It read: “Although many companies have successfully implemented data warehouses — massive databases containing large volumes of historical data for analysis and reuse — many more have struggled to do more with that data than run basic reports using simple tools.”
The quote was published in 2003. How little has changed.
Within the last 20 years, companies such as Walmart, Kroger, P&G, Unilever and Starbucks have gone down the analytics path with decent results compared to most in their industries.
The capabilities offered by certain software today mirrors how these leaders take insights and activate them into business processes at scale.
As managers evaluate new options for analytics, they should not make the same mistakes as in the past. Instead, any evaluation should connect to a CEO-led initiative to improve the business via analytics and focus first on use cases that support the business strategy.
Like digital transformation, analytic excellence is a journey as opposed to an end state. It is all about continuous innovation.
DISCUSSION QUESTIONS: Are retailers making improvements in their approaches to data analysis or are they still stuck using spreadsheets to manage their businesses? What do you think is holding retailers back from achieving the benefits of advanced analytics so widely reported by industry leaders?