How can IT directors better integrate systems to satisfy business demands for data, analytics and reporting once and for all?
Many years after business intelligence tools first appeared, retailers are still being urged to make greater use of their data. The argument gets louder each year due to the sheer volume of data coming in from multiple systems and the ever-more urgent need to exploit it. The urgency for better data, in real-time and on-demand, has further intensified since the pandemic accelerated digital transformation and caused significant shifts in consumer behaviour. For more on this subject, download our report on data management in retail - A Little Data is a Dangerous Thing.
IT leaders have heard most, if not all, of the arguments so the idea they are not responding is false. It’s just that elements of the solution have progressively moved out of their hands.
In a BI survey carried out by BARC (Business Application Research Centre), the three most common problems in BI (Business Intelligence) projects are:
slow query performance (technical-related)
lack of interest from business users (people-related)
poor data quality and governance (data-related).
In the total list of 13 problems, only about one-third sat directly within the IT director’s purview. And yet the IT director carries the responsibility for the shortcomings of the technology.
The people problem has arisen because users have been unable to get what they wanted and created a culture of workarounds that have gone far beyond the control of the IT function, who have just had to go with it.
Working with only partial views of data, users have developed complicated formulae to try and integrate it, and then eschewed calls to use software dashboards by trying to condense everything into Excel.
One study by Retail Info Systems and Consumer Goods Technology, found that 56% of retailers still use things like Excel sheets, PDFs, and flat files for data sharing. This makes data sharing a time-consuming and error-prone process that puts a huge burden on resources.
The culture then becomes one of ‘make do and mend’, because the only history of reporting is saved versions of Excel reports. These reports are often based on small data sets and are hard to validate because there is usually only one author. The culture becomes entrenched with people forced to adopt bad practice - rushing around fixing data flows, re-running batch processes, and validating data that should be inherently trusted – or in some cases, arguing over whose data is correct.
Culture adds a further barrier: one of ownership. Data sharing is typically not seen as an enterprise-wide priority, so no-one has ownership for managing it. In a highly task-fragmented industry like retail, individual departments jealously guard their data and are reticent about sharing it. Put simply, a single view of the truth is not seen as valuable to everyone.
Naturally, there are security concerns, particularly where data is shared with third parties such as brands and affiliates, but most IT directors are on firmer ground here; they know what needs to be done and can dictate the protocols to ensure security.
There have been some serious attempts to solve the problem in the last few years, as evidenced by the sheer number of data engineers and scientists recruited into retail. They're all on a mission to confront the tidal wave of data and apply artificial intelligence to channel it into commercial solutions.
Even at this advanced level, which is not a must-have for most retailers, it does not fix the fundamental problem that the data is not integrated with the BI solution.
Retail IT departments are pursuing a range of strategies to deal with a problem that is almost certainly clearer to them than any other department. Often reporting to the CFO, they can use the numbers to show what can be achieved, and there is now ample evidence of the commercial returns to be gained from being able to analyse broad data sets and act on the insight quickly.
For instance, fashion retailers in the marketing department alone have been able to report between 25% and 45% improvement in KPIs including cost of acquisition, average spend and customer lifetime value.
That said, the returns are dramatic across all departments, including finance, operations, and customer management. It's this that is the catalyst for changing processes and creating a more data-driven AND customer-centric culture.
The role of the IT director is to champion that all-important integration of data, systems, and BI and to work with tech companies that can enable the integration and provide BI and analytics tools and templates specific to retail and each department's needs.
Interesting in reading more on this subject? Have a look at our report ‘A little data is a dangerous thing - Data management in retail.”
We do data! Datitude is a fast, robust, customer and retail data platform that helps retailers and consumer businesses make sense of their data. Combining data warehouse and data lake, systems integration, and business intelligence, Datitude's platform integrates, processes and unifies your key data from multiple systems and channels, both on and offline, to unleash the most powerful customer and trading insights. Whatever the data source, we can process it. Business intelligence, reports, and analytics are built-in and automated as standard, including visualisations and sophisticated interactive dashboards. If you need to turn your data into valuable intelligence, insight, and action, we'd love to talk.