Maximizing Your Finance Data to Drive Your Retail Business
By Steve Pugh, firstname.lastname@example.org
Imagine this scenario:
First thing in the morning, with your initial cup of coffee in hand, you review the morning reports on your mobile as you walk to your desk. The data just in from Italy -- tracking in multiple currencies and languages, and allowing you to alternate between retail and cost accounting methods -- indicates the latest SKU in your shoe line taking off, delighting customers, with no end in sight. Experience tells you that demand in Italy serves as a bellwether to your business in the United States, and you want to make sure you are in full control to leverage the opportunity from a business perspective, while presenting a consistent customer face and experience. A few swipes through the data allow you to profile the buyers and to map that data against the profiles and volumes you have in your various channels throughout the United States.
Another couple of swipes enable you to move that shoe’s inventory to stores and other channels where the demographics match the buyer profile, and your data mining/business analysis enables you to order accessory products with similar styles and features to encourage impulse buying. You navigate between your financial management and operational systems seamlessly, notifying the marketing department to get the store, online, social and mobile promotions ready and scheduling additional staff and other resources to support the projected customer crowd that soon will be coming through your online and brick-and-mortar doors in the United States.
As you sip that same first cup of Joe, you lean back, confident that your ability to analyze business information in real-time has just made your short-term business direction sharper, more effective at putting your customers first and anticipating their needs, and perhaps most importantly, poised for increased profitability. All of this is thanks to the depth of features such as interoperability, integration and granular-level tracking and reporting of your financial management system.
Having data has never been an issue in the retail industry. Data churns through monthly reports; information is gathered in significant layers. Sales reports are generated; gross margins are analyzed. I’ve even seen retailers with piles of printed reports, with accounting staffs manually trying to make sense of multiple brands and channels, and country or regional variations in reporting. Additionally, I’ve seen skeleton finance teams forlornly pushing Excel to the breaking point to get data that their executives demand. Data often lies in disparate systems, the result of mergers, acquisitions, or new channel models, and the process of verifying and updating that data throughout all systems is a slow process -- and the reports those systems generate often have a backward looking view of data, making it hard to accurately forecast and respond to changes in the marketplace.
In the fast-paced, changing world of retail, headquarters and decision-makers in the field need to have the ability to easily harness the data they have and analyze it in new and different ways. They want specific answers to specific problems, and they want it in an easy-to-read format. While ERP solutions may help some retailers in addressing parts of their business, oftentimes the finance module just can’t keep pace with what is needed. With more Big Data on the horizon, retailers are now focusing on their financial management solutions and how they can be more strategic in integrating effectively with operational systems and more importantly, inform decisions that can have an immediate impact on the bottom line. For these retailers, as well as retailers who have opted for ERP alternatives, best-of-class financial management solutions are an excellent choice. They add a modern, sophisticated and flexible financial system to existing operational systems without the need for large-scale “rip and replace” projects.
Based on my conversations with retail leaders, here are some features of best-of-class solutions that can help ensure your retail chain can fully leverage Big Data:
Flexibility. Bob Perry, finance manager at Kramer, Ltd., a Caterpillar dealership with nine locations doing business as nearby as Canada and as far away as Kyrgyzstan, has evaluated several different financial management solutions over the years. According to Perry, “Kramer’s financial management system has not only allowed us to keep costs down, but it also stands apart as a best-in-class solution that provides the power, features and flexibility we need. The reporting capabilities are endless, allowing us to analyze information any way we want. For example, we can slice and dice elements to see the business in real time so we can build on strengths or shore up weak areas. It also gives us flexibility to extract data in a variety of ways based on the needs of the user, so even people who are not financially oriented can understand the reports.”
Single version of the truth. A project manager at one of the world’s largest home furnishing retailers had this to say: “Having a common chart of accounts across the business was important to us. It means information contained in the system can easily be compared like for like. Information about the performance in any country can be accessed easily and everyone knows what that item relates to because we are working to the same project costs and codes.”
Forward-looking. At the Fashion Institute of Design and Merchandising (FIDM), a specialized private college based in Los Angeles, merchandising is more than academic -- it runs three stores on its campuses. Roxanne Reynolds-Lair, CIO, says: “It's always better to get ahead of problems, the way FIDM does with its financial management software. One time, when the credit card processor went offline, we used the system to browse in real time, which helped us trace the problem back to our vendor, identify the cause quickly and move onto resolution. It's very important to be able to troubleshoot a problem, and to do it much faster than doing so manually. With our solution, we have just that.”
Interoperability. Increasingly, companies today want to retain their existing operational systems that work, and replace only those that lack the flexibility to meet their strategic needs. They want a best-of-class financial management system that enables companies to accomplish that, as well as adapt to ever-changing market demands.
While this list is not all-inclusive, it does give you something to think about as you build your vision of the future in the energetic, multichannel world of retail. A best-of-class approach allows you to retrofit and modernize your financials, no matter what your infrastructure, and uplevels the quality of your business analysis. The net-net is meaningful, accurate and real-time decision-making for your retail chain.
Steve Pugh is CEO of UNIT4 CODA, Inc., a specialist in international, best-of-class financial management software. Coda Financials is designed to integrate with industry- and company-specific applications and provides real-time financial visibility and control across people, processes and systems. He can be reached at email@example.com.