Reports are a big deal — and the BI and analytics industry, which is slated to reach $13.8 billion in 2013 and $17.1 billion in 2016, reflects the growing need for more information. Data itself is growing at a healthy pace of 40% to 50% per year, which is quickly outpacing most organizations’ ability to manage the growth. Retailers need a way to turn this onslaught of data into a competitive advantage.
But turning data into a competitive advantage is a costly endeavor. Beyond the expensive BI systems and applications in any given organization, businesses also spend an average of $79,000 and more than 900 hours annually on processes for gathering, creating and analyzing reports.
Beyond opportunity costs, there are also the hard costs of human error. JP Morgan Chase famously lost $6.2 billion in the “London Whale” trading fiasco, which was directly related to human error in reporting. The Federal National Mortgage Association, better known as Fannie Mae, had a spreadsheet reporting error that led the association to misreport earnings to investors by $1.3 billion. And though the losses in these two examples are extraordinary, the reporting mistakes and snafus are not. With the status quo of BI, analytics and reporting, blatant human error has simply become a fact of business.
That doesn’t have to be the case. From my experience working with retailers and other leaders across virtually every industry, I’d like to recommend three ways to eliminate the hidden costs of reporting so you can put more time and resources into making better decisions — and more money:
1. Centralize Data for a Purpose
Whether you have a BI system to centralize your data or you just get several different reports, you’ve probably realized by now that simply looking at multiple data sets simultaneously isn’t going to improve the status quo. You need to centralize your data so that you can synchronize it — compare apples to apples, if you will. By having a system that helps you see the data in context, you can focus on specific business goals and make the right decisions, quickly.
There are three questions you have to ask before you can set up a successful system:
- What is the overall business objective I’m trying to achieve?
- How can I best measure progress toward that objective?
- What action do I need to take as a result of this measurement?
Without answering these three questions, you can never get the full value out of your data — no matter what format the data is in. That being said, you also won’t be able to truly measure your progress toward business objectives without looking at multiple data sources together, because that’s the only way to get the true, complete story.
At Domo, I’ve worked with a particular national retailer that was in the middle of cutting a product line at the same time that it was implementing a system to centralize data and target specific business goals. One of the business leaders was able to see critical information on that product line in context, and discovered that the product line in question was producing roughly half a million dollars in revenue per year in two regions. The retailer changed trajectory, kept the product line on the shelves in those regions, and retained a significant portion of revenue. And they were only able to do it because they had centralized their data in order to target specific business goals.
2. Automate Data Sources
You don’t always have time to chase reports, but you need to know immediately if there’s a delay in shipment, an increase in sales on a particular item or an unanticipated influx in business. That’s why it’s critical to automate as many data sources as possible.
The benefit to automated data systems is that you get your data in real time. Retailers need real-time data because it helps you manage fewer processes, less often—otherwise known as “managing by exception.” And for the retail world, it helps store managers own every process at their locations, thus relieving upper management of significant headaches and errors.
At Bohme, a national women’s retailer, CEO Vivien Bohme used to spend half an hour checking in on the sales numbers and revenue per location — and at the time, she had a dozen locations. Now that she has automated her data, she not only saves six hours per day for more important processes, but she has totally passed off those responsibilities to her store managers.
Guy Fish, marketing manager at H&R Block, spoke on the efficiency of a real-time system for data analysis and reporting. Fish says, “[It] doesn’t replace thinking — rather it gives us more time to think. [Our system] gives back the 10% of someone’s week that’s spent trying to collect and parse information. If you multiply that across an entire department, the impact is significant.”
3. Go Mobile ASAP
There’s no such thing as closing up shop anymore; with online shopping churning revenue for even local businesses, you need access to your data any time, anywhere. And in today’s increasingly mobile world, there’s no reason for your data to be locked into a desktop-only tool.
Bohme nailed the trifecta by centralizing her data, connecting all of her store managers to real-time updates and getting a system that’s fully functional on mobile devices. By going mobile, her store managers are checking their location’s sales numbers from anywhere; and since the data is also in real time, the managers can make decisions to affect same-day store performance and hit daily goals instead of seeing reports after sales opportunities are gone.
As a result, Bohme consistently raised revenue by 15% per month until the new revenue simply became the new normal. Now, the company is expanding by several locations each year.
Benefits Must Outweigh The Cost
You know that errors in reports mean revenue down the drain. Retailers need a way to reduce time-consuming reporting processes and costly human errors so they can get the right info, the right insights and more revenue. When you have accurate, timely reports, you can spend more time doing what matters most.
Steve Wellen is the Chief Operating Officer for Domo. Wellen draws from more than 30 years of industry experience to his role as leader of the company’s client services team — bringing value to Domo customers through consulting, education and ongoing engagement. For more than seven years, Wellen was with Omniture leading pre-sales engineers, consulting, education, solution architecture and operations, and was part of the team responsible for the company’s record growth.