In this post, the latest in a series highlighting some of the solutions and knowledge we’ve developed in partnership with our clients, we will focus on a challenge facing the retail food and beverage industry: information management. It’s a common problem for many retailers, who are often trying to make sense of data compiled from a variety of locations, from brick-and-mortar shops to ecommerce applications, warehouse inventory systems and more.
Inaccurate data is a problem that’s not limited to the retail food and beverage industry, of course, and it has a direct impact on the bottom line of 88 percent of all companies, with the average company losing 12 percent of its revenue as a result. About 95 percent of all organizations agree that strong information management is critical for business success, and data-related problems cost the majority of companies more than $5 million annually, with one-fifth of companies estimating a loss of $20 million per year.
The issue of data integrity was particularly important for our client, a major international coffee and tea retailer with 20,000 stores in more than 60 countries. With aggressive goals for future expansion, the retailer makes frequent acquisitions, and each new company brings with it a different combination of systems and business processes.
This expansion has made the company a household name, with revenues of around $15 billion, but it has also resulted in a disparate and convoluted IT landscape with thousands of systems and a wide range of business practices. Overlapping, duplicate or incompatible systems can lead to such inefficiencies as products being sent to the wrong customer, resulting in financial losses for the coffee company. Inconsistent operations, such as coffee-storage practices that vary by region or country, result in difficulty in reporting on sales and inventory levels across the enterprise.
To maintain its status as the world leader in coffee and tea, the company needed to be able to generate accurate reports on all of its key performance indicators. It needed to be able to understand how much revenue was lost due to bad data, expose that bad data and take corrective actions to fix the underlying problem.
To meet these needs, ProKarma implemented SAP Information Steward, a data governance solution. The team drew from its experience as a certified SAP partner to set up the environments needed to support it, integrate it into the company’s existing environments and evaluate the underlying data.
The end solution featured a role-based user interface that enabled the company’s management to monitor data quality in real time, including aggregate reports using dashboards and scorecards, and the ability to narrow results to a specific region or store. The ProKarma team also established a set of standard definitions for business practices and processes so that they would be consistent across the company – for example, the standard calculation for days in inventory. The result was a newfound ability by the retailer to fully use information as a strategic asset, fueling its continued plans for aggressive expansion.
- Managing Information in the Enterprise: Perspectives for Business Leaders. Forbes Insights. 2010. http://images.forbes.com/forbesinsights/StudyPDFs/SAP_InformationManagement_04_2010.pdf