The president of Manthan Systems says retailers can use business intelligence to uncover many small opportunities that can add up to big profits.
Grocery Headquarters: Why is it so critical for supermarkets to invest in business intelligence systems?
Peter Charness: Maintaining or increasing profit for supermarkets in this competitive environment is a “pennies” business. For most retailers there is no large single change they can make that will uncover a large hidden hoard of unrealized profits.
Extracting pennies requires finding hundreds or thousands of opportunities, one product, one promotion, one customer, one store and one associate at a time. This requires monitoring the current business and reviewing the effectiveness of every change through massive amounts of detail. Looking at business effectiveness, on average, once a week, at a summary level of business just doesn’t cut it. Business intelligence (BI) provides the capability to monitor the business at the frequency and level of detail needed to increase both the top and the bottom line.
Every retailer encounters unplanned events, be it disruptions in the supply chain due to unforeseen conditions, changing consumer tastes or other factors. How can BI systems help them identify opportunities and formulate and executive new strategies on the fly?
Change and disruptions makes retail one of the most challenging, dynamic and fulfilling types of business that one can work in. Can you imagine how boring Monday morning would be if everything just happened exactly to plan and there was nothing much to take care of? A proper BI solution sharpens the retailer’s acuity to the business climate, and finds and presents the opportunities in the business to the decision maker in a proactive fashion. An innovative BI solution then lets that decision maker explore the opportunity and determine root causes, without having to resort to the IT department or some “power user” for help and support.
Innovative BI solutions then provide the capabilities to the decision maker to simulate different courses of action, select the best alternative, and implement that decision through the execution systems. The BI solution should therefore tell you when sales or stock levels are problematic, present some price change options, let the merchant select the best option and send the new price information off for approval and implementation. Traditional BI solutions at best just inform you. Being informed is certainly interesting, taking action is where the profit is at.
Much has been made about the trend toward “democratization” of business intelligence, making information available to a wider range of decision-makers in an organization. Where does Manthan fit in?
The talk in BI has certainly been about pervasive use of BI thoughout organizations. The historic reality has been that traditional BI solutions are too expensive, and too complex to spread broadly within a retailer. Teams who could be making better fact based decisions just don’t get the tools they need. Manthan is changing this through a completely different economic model of ownership, and through novel new interface techniques and embedded retail business process workflows. With these innnovations we are seeing our customers implementing our retail analytics for example to every associate in every store, and very broadly throughout the rest of the organization.
Business intelligence needs evolve as a retailer grows and adjusts to changing market demands. How do your business intelligence tools meet a retailer’s needs now and in the future?
Our design focus has always been to future-proof our applications by making the business user self-sufficient in terms of being able to do their own discovery, create their own dashboards, view alerts or rules without extensive training, or support from IT. The analytics they need for solving tomorrows’ problem is within their own reach in today’s release of our software. We do this through a well-engineered “self service capability” and through guided analytics.
As well with our focus being strictly retail, we’ve been able to provide a full solution to our customers, not a tool set and an accompanying development project. From a research & development standpoint, we maintain a team that numbers in the hundreds focused strictly on retail as our investment in finding and baking into our product that next new capability that will help our customers find that next penny of profit in their operations.