But many are only in the early stages of implementing BI systems; periodic data review still overshadows ad-hoc reporting.
Posted Jul 19, 2006
Seventy-six percent of retailers use or have active, budgeted plans to use business intelligence in some form or another within their organizations within the next couple of years, according to a new report from Aberdeen Group. Yet only 21 percent of retailers indicated that they have had enterprisewide business intelligence systems for at least two years.
The report, "Business Cohesion in Retail: Bringing Cohesion to a Fragmented Enterprise," states that average retailers have largely missed opportunities to make better decisions by viewing data on an ad-hoc basis, rather than at regularly scheduled intervals.
Report author and Aberdeen research director Greg Belkin says in the report that many retailers are still siloed in terms of their data, so enterprisewide business intelligence is impossible until enterprisewide views of data are available. Belkin adds that traditional merchandising processes are in the need of a serious overhaul to add more in terms of predictive analytics "to ensure last year's results don't become this year's self-fulfilling prophecies."
Breaking down the silos is no simple matter. "Smaller companies have as many as 10 different data marts, while firms over $1 billion will have as many as 50 data marts within the company," adds Leslie Ament, Aberdeen channel director for the customer intelligence practice. Large retailers tend to be near the upper end of this range due to the array of different suppliers.
Supply chain complexities are a big part of the challenge in breaking down these silos, Ament adds. Because different retailers have different supply chain intricacies for discounts, billings, item names and other data records, there's no simple way for a business intelligence vendor to meet the needs of the market.
Belkin recommends that customer centricity should drive any further investments in business intelligence. Those retailers who are "best in class" are already using business intelligence across the enterprise, but these retailers must avoid stalling at current levels by continuing to invest in the technology.
The first step for any retailer looking to implement business intelligence, according to Belkin and Ament, is to "get the house in order"; in other words, to understand the value proposition of business intelligence and to determine where it can provide immediate return on investment.
"Getting one's house in order [using more enterprisewide business intelligence] is something that should be approached in stages," Ament says. "Every retailer is different. The good news is that they're moving in that direction."
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