Retail Transformation

The retailing giant is the part of a conglomerate which is having a history of 125 years. The retailing arm itself is 32 years into operation. The magnitude of the size is very much in the show if we mention that the employees in the retailing arm are 44000 and the store is operating in the Middle East and North Africa, Russia, Turkey, and Europe. This huge presence is through about 2400 of the stores where over 70 brands are being sold eventually in 15 countries.

The retailing arm is structured keeping world standards of retailing in mind. The CEO controls the whole establishment. The brands fall into 7 categories such as Fashion & Footwear, Food, Health & Beauty, Pharmacy, Optics, Home Furnishings, and Leisure & Entertainment. Each brand is led by a Vice President or Business Director. Ultimate brand responsibility and P&L accountability sit with business unit Presidents who report directly to the CEO. Each brand gets its own team for driving the sales and customer experience.

Cross-border functional teams for HR, Finance, Legal, Property, Supply Chain, Audit, IT and Customer Service provide specialist support and consistency of reporting in key areas. Whilst structures vary by region, a focus on common policies, metrics, and reporting systems provide an enterprise-wide perspective of performance.

Business Needs

• As there are specific Brand managers and teams within the organization, the time spent on planning and budgeting was huge.

• The sales forecast was happening every week. With multiple touchpoints and decision-makers, the timeline and accuracy was anybody’s guess.

• Lack of traceability of changes in the data was an issue as the data was collated from various sources through multiple brands/stores which in turn masked the purpose of having one version of the truth.

• Lack of standardizations and logic assumptions for cost allocations.

• An enormous amount of data was a result of a lack of visualizations over the changes in the data.

• Uniformity of the data for the closed periods and flexibility of real-time forecasting based on scenarios were not possible- A classic drawback of spreadsheet budgeting.

The Solution

IBM provides organizations with a performance management solution that enables a line of sight to improve outcomes. IBM solutions for financial and operational performance management enhances organizations’ capability to perform key processes, such as planning, budgeting, and forecasting. IBM’s solution to the challenges described here supports the execution of performance in an integrated, collaborative, connected, concerted manner in order to impact change and get better results.

• Implementation of Cognos in lines of the requirements of the organization created a robust business intelligence platform that allows users to forecast weekly sales and margin.

• Store wise forecast against the top P&L Line items facilitated the flexibility of referring multiple versions of a forecast for the users.

• Variance analysis across multiple versions of forecasts and data became possible without any extra effort. E.g. Current Forecast, Budget, Actuals, Last Year Actuals, etc.

• Web-based deployments of models for data collections & validations enabled real-time access to various users at multiple locations.

• Real-time calculations is enabling users with the flexibility of allocating various costs, based on trend ratios.

• Accurate and multidimensional reporting systems enabled the top management to have a final info sheet as there is uniformity and data input is permanent for entry-level users.

The Benefits

• Cognos helped in accelerating the time required for analyzing multiple combinations of data.

• Cognos improved efficiency over data integrity and multidimensional analysis.

• Real-time weekly and monthly forecast became effortless, which was otherwise near to impossible.

• The user has the flexibility of entering and analyzing sales and margin values weekly as well as monthly.

• A single source of information system is established where the data transparency is sustained and single version of the truth is maintained.

• The organization has been able to find a solution to forecast for unplanned stores and have clear visibility over the uncontrollable due to the Cognos installation.

• Users now have the visibility of viewing the previously closed forecast values and analyzing for reporting requirements.

The retail industry is where there are millions of SKUs present. Considering this hurdle, excel-based management can be termed as a failure even before assessing the scenario. Adding up to the chaos was the 2400 stores and 44000 employees covering 70 odd brands. IBM COGNOS Enterprise Planning tool is more than capable of handling such a large organization with its multidimensional approach. Veracitiz was able to understand the exact scenario and implement the COGNOS for the best of utility.