The last several articles I have written for this publication (Retail Industry Leaders Association, RILA) have had as their central theme the use of business intelligence (BI) and the impact loss prevention can have on shareholder value. At the risk of over communicating and boring the reader I continue this writing along those same themes because I truly believe BI is an under utilized opportunity for more than just the loss prevention function in retailers today.
It’s no secret that we are all being called upon to do more with less. None of us enjoys the management task of reducing staff. When I was at the helm it was one of the most painful things I had to do. There is a certain residual guilt associated with the process of causing a major and, initially negative, change in someone’s life while seemingly nothing happened to me. But, we all know that as leaders, not everything is easy. We have tough decisions to make and frequently those decisions impact others. When we do have to make those tough calls, hopefully we work hard to minimize the negative impact and do what we can to help the affected.
So, as we are taking the action necessary to make those staff reductions, we are also worried about how can we now get the job done. Our management teams will expect no less of us in terms of what they want delivered so now we have to get very creative. How can we make process improvements, doing more with less, and particularly in this economy, without capital availability to install the latest whiz-bang loss prevention technology? If technology might permit us to improve our results even with fewer people how do we determine what that technology is and how do we prioritize it? Then, if we do identify it, how do we pay for it?
During the last year or so I have worked with some great technology developers, particularly on the BI initiatives. I have worked with BI software and with hardware designed to facilitate and improve the efficient use of BI. As written about previously, these technologies frequently transcend just loss prevention benefits and provide store operations, merchandising and marketing with information which enables them to improve staffing efficiency, understand the shopping experience of the customers and improve product and category selection. So, there are a number of beneficiaries and there are creative ways to share in the costs of implementing these BI tools.
Here are some recommendations on how to get “capital creative” and make significant improvements in your company’s bottom line, in your company’s competitiveness and in your department’s results:
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Explore the BI technologies that are currently on the market and learn about what is coming to the market and what needs to be made available.
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Make a spread sheet of the various features of the BI technologies you learn about and look for overlaps and for gaps. This will help you understand better what will best help your company (not just loss prevention) so that you can discuss this technology opportunity with other functional areas within your company.
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Work with the providers of the technologies to develop a true understanding of the various ROI opportunities through the use of their tools.
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Agree with the other functional beneficiaries how you all would divvy up the cost if this were a capital purchase based on various ROI’s. Frequently, one functional area’s use of the BI tool will pay for it within a short period of time which provides “free” benefits to the other areas.
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Then, work with the BI tool provider(s) to explore creative ways to finance the implementation. With the right financing it might be possible to expense the purchase over an extended period of time and charge each of the functional beneficiaries a relatively small monthly expense and derive monthly benefits which far exceed the costs.
Today, many BI technology companies understand how they have to work creatively with their customers to earn their business. This absolutely does not mean that you should demand and expect anything for free from your potential provider. They wouldn’t be around long if they had to give into that type of demand from everyone they wanted to sell to. But it does mean that many of them are understanding better how to help you explain and justify to your management not only what the proven benefits are but also how to enable your company to pay for it.
Implementing effective BI technology with proven ROI frequently will mean that you are actually doing more with more, just fewer headcount and overall less cost. Choosing the right tools will add value to your personal stature, your company’s bottom line and to your company’s shareholders.