Summary: The first and second editions of this blog mini-series discussed common concerns about today’s business intelligence solutions for retailers. In this final edition, we will focus on the area of the profit amplification solution where the most value is derived from: taking action. Most of the questions that retailers are asking, when it comes to analyzing the vast amounts of data, and finding true value from this big data, involve what to do with an identified opportunity: “Who do I send responsibility to, if not myself? If I am the right person to take action, what actions could I take, and how do I know the ‘correct’ course of action? If responsibility is given elsewhere, how do I track it? How do I know that the actions are actually being performed, and the issue has resolved?” Wouldn’t it be nice to have answers instead of questions? With the proper solution, you should be able to access and analyze all the available information and data that you need; send it to the right person, at the right time; recommend best practice actions based on your own culture; and monitor and track the actions. All of this being done automatically, easily, and quickly. The real value of a solution comes from the actions that are being taken, not necessarily the opportunities that are being identified. So what really makes an opportunity actionable? It must be timely, detailed, and guided. Timely: The opportunity needs to be created and communicated in a timely fashion. It needs to be sent as close as possible to the time it occurred and/or was identified. Opportunities need to be evaluated every day. If you wait a month or a quarter to find the opportunity, you will miss the chance to take an action and to have an actual impact. Most large issues that are identified are only large because of the time that passed and the value that was accumulated from not taking action. If only known about sooner, and acted on, the issue could have been dealt with and prevented (with less resources and effort) while still a small issue. Detailed: The opportunity needs to have as much detail as possible; store, sku, day or week level, as this will allow you to focus your actions on the right entities. By having detailed opportunities, your store visits will be much more valuable. When you visit a store, you are able to focus on the areas that require attention, instead of aimlessly visiting all the areas of all stores. We refer to these efficient and effective store visits as “value visits”. Guided: By guided, we mean two basic things. First, the opportunity needs to be sent to the right person that will be able to take the actions. The last thing you want is for everyone to look at everything and try to figure out what is theirs and what is not. Secondly, the solution needs to contain recommended best practices, so when the assigned person receives it, they will be guided on what actions to take and how to perform them. We now know that actionable opportunities need to be timely, detailed, and guided; but how do we make this a sustainable process to ensure we are continuously improving and bringing value to the business? The automated process of identifying new opportunities, based on the patterns that are already set or known, is referred to as pattern matching. We know what we are looking for, so we let the system do it for us automatically. However, it is very important to continuously look for and recognize patterns in new areas, based on your business knowledge, and then add them to the process of pattern matching. This is referred to as pattern recognition. So in the world of the profit amplification solution, the job of the analyst is not to analyze the same thing over and over again every day; their job is to look for new patterns, new opportunities, and automate them. This is the continuous improvement that creates operational excellence.
