Wednesday, March 15, 2006

Does Your Data Support The Information Your Business Needs?

We are currently working on a demonstration for a retail merchandising application. We begin with an architectural drawing of a retail environment. An overhead view of the entire store is used and we also look at each display unit from a head on perspective; the same way a shopper would view the display. We map all of our business metrics into the retail environment. This includes sales, supply chain, product and employee performance metrics. Our tools can display cross selling opportunities, product associations, and the effects of both internal and external marketing efforts. We can also show the same shelf and how it changes over time, profit contributions, metrics by employee or customer type or store and so on.

Here’s the problem we’re faced with. We wanted to map raw data into a mock up from an existing retail database but the appropriate data simply isn’t there to support the information metrics we need to run the strategic and tactical side of the business. The operational part of the OLTP database is fine and you wouldn’t think there is anything wrong with it. That’s one of the problems with databases and commercial applications.

An off the shelf application rarely encompasses the strategic vision of the company that uses it.

We wanted to create metrics for product categories and sub categories like gross revenues for the men’s wear department and then men’s shirts. But all of the raw data is focused on the performance of the sales rep. We can create basic metrics but we can’t create key performance indicators against the products, only against the employees. Each one of them has a goal to achieve but there’s nothing for the elements within the store. We also wanted to establish metrics for customer lifetime value and the data support for that was also sorely lacking. There are more examples but you get the idea. This retail database simply does not have sufficient raw data of the type needed to perform anything more than simple analysis.

What do you do if you’re faced with this problem? You have to go out and get a new retail application, right? This is what companies often do and they pay big money for shiny new apps because they feel that new applications must capture the information they need to run the company. Unfortunately new applications often don’t address the problem you are trying to solve.

Determine what your business information requirements are before you go out and get the latest software app. You probably already capture most of the data already in your current applications. Our retail example had 80% of what we needed. If something is missing, consider having a small app written to capture the missing pieces. It will likely be cheaper to implement since you get exactly what you’re missing and you won’t have to change everything else you already do. Create your business intelligence reporting from a centralized database so that users always see the same view of the data. This is how business intelligence solutions work anyway – centralized reporting of consolidated data.


Anonymous Business Intelligence Software said...

I agree on this. Business intelligence applications should meet the special requirement of an enterprise's operations.

6:19 PM  

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