Business Intelligence Blog from arcplan

Business Intelligence Value for Retailers


bi-retailHow BI facilitates a decision-making process that saves millions

At the core of every business decision is the desire to drive value for the company – whether that’s increased sales, higher margins, elevated profits, or return on investment. Decision makers should use all the resources at their disposal to drive this value, including their business intelligence software, which may include guided analytics (i.e. dashboards), ad-hoc analysis and collaboration capabilities that contribute to informed decision-making. Today I’ll explore how BI software facilitates decisions in a retail scenario. But this article isn’t just for retailers – anyone can extrapolate this information to their business to see how BI can provide concrete ROI.

arcplan serves a number of customers in the retail industry, including two of the largest grocery chains in the United States. Retailers are well-known for the small net revenue margins – on average, 3% across the globe for all types of retailers – which pose significant challenges on process controls and efficiency in supply chain decisions. One of the key areas of interest for all retailers, especially grocery chains, is the reduction of shrink – the loss of inventory due to product spoilage, waste, theft and other causes. It’s estimated to account for 2-3% of overall sales. Perishable shrink even goes up to 5% within a typical grocery chain. So for one of our customers, whose revenue reached $6.25 billion in 2012, a reduction in shrink of just 0.1% means $6.2 million to their bottom line.

So a simple question that would catalyze a decision-making process at this grocery chain might be: How can BI help reduce my shrink by 0.1% while balancing availability of goods and customer satisfaction? They would want to meet high customer expectations without over-ordering, which leads to shrink through spoilage.

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Guided Ad-Hoc: It’s Not an Oxymoron


Limiting the ad-hoc experience may be best for most business users.

Last time, I wrote about how the concept of self-service is driving ad-hoc adoption and presented the kinds of skills users need in order to effectively take advantage of ad-hoc reporting tools. The conclusion was that even though self-service is great for the power users in your organization, it should not be seen a silver bullet for regular business users. Sure, business users want to be able to answer business questions on the fly, but most ad-hoc reporting tools are going to be too advanced for them. So what can you offer them?

Most people need a guided ad-hoc experience or straight-up guided analytics, i.e. dashboards and scorecards. Guided analytics are suitable for most business users, especially executives and managers, and can contain an ad-hoc component that allows for some on-the-fly report creation. To the right, you can see an example of a dashboard solution whose final tab is ad-hoc.

The other option is to offer “guided ad-hoc” to users, meaning that there is some structure to the process; you have the flexibility to generate your own reports within certain parameters. For example, a guided ad-hoc tool may allow the user to build a report from a list of predetermined columns and rows. This way, the user has a solid foundation for creating their report along with complete flexibility for generating the answers they need.

Whether you choose to implement a guided ad-hoc tool or a guided analytic application with an ad-hoc component, features that are essential include familiar controls like undo and redo buttons. Drill-down, filters, and charts are features users expect. Business users may also want to share reports with their peers or decision-makers, so the ability to create a PDF, export the document to excel, or simply print are useful features as well.

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