When I was a kid there was a line on the report card that read: “works and plays well with others.” It seems the industry is still working to knock down those silos which seem to have been built up again during the recession.

As noted, there’s a data glut out there and turning it into actionable information is essential. But real time BI has to be used to produce actionable information throughout the organization. Someone has to take the initiative and say that the organization has to pull together as a team. I guess that’s what top management is for.

Too much information is housed in silos and difficult to access. Once this access is accomplished or provided, the data is not in a format that can easily be merged or integrated with other data sources such as invoice, syndicated and supply chain. When you add shopper and loyalty card data to the mix, one can easily see the need for BI solutions that can be implemented and deployed not just to a few but to all information workers throughout the retailer’s organization. BI tools have traditionally been too complicated and difficult to use by anyone other than BI experts. The reality is that merchandising managers,supply chain managers and of course, C-level executives are not BI experts, but need the insights for better decision making that BI provides. BI must be provided in an easy to use and easy to deploy manner to get better results. I am not saying it is easy to do. This is a complicated and difficult process, but the complexity must be hidden from the user in order for adoption… Read more »

The retailers that I speak with on a regular basis are not looking for more business intelligence. They are, however, looking for insights at the point of decision. The research that I have conducted clearly shows that retailers are more interested in understanding consumer demand and using that knowledge to make better merchandising and operations decisions. Many will recognize this as software with optimization in the name. The reality of this technology is a demand sensing component that is applied to business processes and decisions. Lifecycle price optimization is one area where we have seen a large number of retailers utilize these capabilities. With this success, software providers are expanding their application of consumer demand science to additional areas like size and pack optimization for apparel retailers, or assortment and space optimization. In each case, a demand engine identifies consumer preferences and translates these demand signals into recommendations and predictions of actions under consideration. Retailers are not looking for more BI, they’re really looking for a better way to understand their customer and to deliver… Read more »

Business Intelligence is required in this age of fast communication, but real-time is a waste of money in retail. What is required is a daily stream of information, preprocessed for exceptions and trends. This provides the foundation for daily operational adjustment. Receiving information at 8:13PM is not actionable until 9:00AM the next day. Processing everything from yesterday can be used to set up for operational adjustments today. This is where small minor adjustments add up to significant operational improvement.

Real-time is required for POS and DC inventory location. Other than these two applications, daily information is sufficient.

Of course demand for business intelligence will continue to increase! Competitor pressure alone will drive retailers to capitalize on data capture. What hampers the process today is a lack of well designed and integrated technology that fully leverages the data being captured.

This is not about whether enough developers are in place to write code and systems to make it happen. What is required are those rare individuals who have the vision and strategic insights to design the decision making process in a manner that fully utilizes the breadth of business intelligence across the many disciplines that transcend Operations, HR, CRM, POS, Media, Real Estate, etc.

We are having tremendous success with technology development that speeds up smart decision making.

One can also over-react to real-time data access but informed decisions are always better than guess work.

Having spent 13 years of my career working for software companies focused on BI solutions specific to the CPG and Retail Industries, I am a big believer that these solutions can make a difference. When I started at Interactive Edge in 1995 there were few BI solutions available to CPG manufacturers. Zel Bianco, now a fellow BrainTrust contributor, was one of the first to see the opportunity and work to build solutions to meet the market demand. Having just left in October 2008 as CEO of Kenosia, I am well aware of how far the BI space has come. The list of BI solutions related to Supply Chain, Category Management, Inventory management and Loyalty is long and growing (I could rattle them off, but it would take up most of this blog). More importantly big players including SAP and Oracle are now getting involved and building or buying BI solutions that are specific to manufacturers and retailers. Wal-Mart’s retail-link was one of the catalysts for the growth of BI solutions over the last decade. IRI… Read more »

Retailers are indeed looking for more actionable intelligence and decision support, as are many other industries. It’s a classic case of lots of data but it’s not organized, centralized or easy to access for anything other than standard reports, many of which are decades old. Part of this is the legacy of retail being merchant-driven and not necessarily marketing- or customer-driven. There are lots of numbers (i.e., data) but little “why.” Look at comp sales, one of the key numbers everyone looks at but can’t explain with any specificity, certainly not in real time. Retailers are not generally known for being forward thinking when it comes to investing in new capabilities, especially technology. After all, it is “expensive” and “difficult” to execute and the paybacks are not always immediate. Unlike markdowns. Even the concept of BI as a tool for management and decision making is limited without the CI (customer intelligence) attached to it. We see lots of retailers that know everything about their transactions EXCEPT the customers that produced them! When they are able… Read more »

Well absolutely, there is a significant new demand for BI with retailers. While interacting with our customers (both retailers and CPG companies), BI invariably pops up, either as a pain point or high on their agenda. Of course not all are at the same level of maturity. Some have troubles with basic reporting while others are working on reducing time to action leveraging predictive analytics. But none the less, everyone has realized the importance of managing their data and leveraging it to gain a competitive edge. In fact, based on the customer queries we get in these areas, I have to agree with the fact that global economic downturn has only increased the appetite for BI. However, cash crunched retailers do not have large budgets to invest in full fledged BI solution. We have seen them embark on small analytics projects yielding faster ROI, or adopting a services model to BI. From what I see, most retailers are not yet ready for real-time/near-time analytics yet. Yes they would like to get there, but it needs… Read more »

I don’t think the demand is new. There is always a demand for insights. The problem is that BI is too often really reporting (i.e., a collection of backward looking facts that may or may not mean anything) instead of analysis (i.e., facts that lead to a forward looking business conclusion). It has gotten to the point where many managers and executives can’t tell the difference anymore. Hopefully, the next generation of predictive analytics can help with this problem. And hopefully, smart organizations will eliminate the old reporting that simply cloud decision making processes with irrelevant facts.

This is another example of the 80/20 rule. If retailers AND CPGers could utilize 80% of what they already capture, there would be enormous insights achieved. The decision is where to focus the BI efforts. POS data? Supply Chain visibility? Promo Optimization? Yes, yes, yes…and more. A Demand Signal Repository can drive fewer out of stocks, for instance. That will help cure disappointed consumers, lost revenue and weak earnings. How about we start there? There are a few retailers out there who have grabbed a hold of this capability and are reaping great success. They aren’t all bragging about it, though, since they view it as a competitive advantage.

Take a look at the BI functionality in most premier providers now. It is absolute overkill for most companies. Aligning the business processes to take advantage of the BI analytics is easier said than done, however, it is proving to be worth the effort.

The problem certainly isn’t a lack of data. Legions of trees have laid down their lives in the interest of helping us make better decisions about how to retail. I don’t think data (real time or otherwise) is the real issue. I don’t want to over simplify this but here’s what I think the problem is; CEOs very often don’t buy their own stuff. I’m not saying they don’t use their own stuff…but they aren’t getting it like customers do. Whether it’s seats on planes, rooms in hotels or running shoes, the C-levels aren’t shopping their businesses just like customers would. Frankly, I think it’s because many are uncomfortable with what they find in their stores. Poor service, product problems, location issues and angry customers/employees are some of the things that are troubling to see first hand. It’s somehow easier to handle it all when it’s stats on a spreadsheet. Easier to delegate the problems away. We’ll always need clean data to test our assumptions against but the best data can only be mined by… Read more »

I agree with Kevin Sterneckert’s comments. While many retailers are still trying to merge silos, others are looking to seamlessly inject analytics and optimization into their existing business processes. The key here is providing the right information at the point of decision.