As my previous blog entry discussed, retailers remain challenged to ever increase return on investment against their IT spend and it is seen as one of the main challenges for CIO’s in 2016. Against this fiscal backdrop, business stakeholders are demanding capabilities to enhance and personalize communication with their customer base that align with both current demographics and technical capabilities. Alignment of these two realities requires a clear business capability enablement roadmap aligned to a concrete IT infrastructure evolution.
Effectively a retailer can choose one of two general options when planning a system landscape to support business capability enablement. One may choose to look at sets of business requirements individually and select both hardware and software that are deemed to best meet each capability. In this scenario data sets, landscape architecture, and business processes can – and often do – remain separate across different divisions in large organizations. On the other hand, one may choose to select hardware and software that best meets the needs of all business stakeholders at an aggregate level. Here, one leverages commonality across data sets, infrastructure and business processes to simplify, consolidate and standardize business capability enablement. In contrasting these two options it becomes apparent that the latter approach provides the best alignment between business capability enablement and return on investment.
At /N SPRO, our Consumer Industries team has managed implementations that have demonstrated a retailer can find a balance between business capability enablement and return on IT investment. This balance is achievable through the utilization of the SAP suite of products and begins with an Omni-Customer data foundation established in SAP CRM (Customer Relationship Management) in conjunction with SAP HANA (High-Performance Analytics Appliance) and CAR (Customer Activity Repository). Properly constructed and enabled, this technical foundation provides a single source of truth for all of your customer’s data elements and shopping activities.
As opposed to the individualized software selection approach mentioned above, this aggregate approach preferred by /N SPRO immediately provides both IT and business benefits. Firstly, SAP HANA is the #1 rated In-System Memory Platform according to Forrester. This rating is predicated on a number of factors including, speed of result availability for complex queries, the thousands of successful implementations and the over-arching suite of SAP applications that leverage this common data set. Investing IT spend here buys your organization the best product on the market today. Although an important accolade in itself, the benefits to your business stakeholders and your IT organization are at least equally important.
Business Benefits: Current and Complete Data Sets and Efficient Processing
Your business stakeholder groups gain the benefit of having all relevant data elements available in ‘real-time’. Foundationally, articles, sites, assortments, transactions, inventory and pricing are brought together in a single database source and paired with a comprehensive 360o customer master record for the provision of all key data elements required for your business to operate in an Omni-Channel environment. The utilization of an In-System Memory Platform makes business service-level agreements (SLA’s) much easier to achieve. Not only are queries made against a complete and current data set, but results generation speed is greatly improved – SAP quotes up to 10,000 times faster in numerous articles and press releases. Additionally, SAP CRM, as an application layer, helps the business to effectively plan and execute targeted marketing campaigns based against this single data set. Users are provided with a comprehensive set – at an individual customer level – of all relevant targeted marketing in place as a result. This single data set is also a key benefit for your ‘Call Center’; a customer’s profile, shopping history and marketing communications are immediately made available whenever they contact you. Your support colleagues are able to directly maintain data elements relevant to individual customers, such as attributing a transaction to a customer, updating an address, phone number or contact preferences.
IT Benefits: Simplified Landscape Architecture and Limited Data Duplication/Erosion and Aggregation
The individualized software selection approach invariably comes with a disconnect between databases and application layers. In order to make appropriate data elements available to consuming systems an IT organization is typically required to provide and support complex custom integration solutions. The challenges here are threefold. Firstly, this custom integration comes at both an initial cost and a support cost. Secondly, one typically sees data elements either duplicated across multiple databases and/or data elements unavailable to required business processes (without additional customization). Finally, decisions are typically made to provide aggregated data to consuming applications to achieve SLA’s, thus devaluing these applications processing abilities.
Our recommended approach, SAP CRM based on HANA and CAR, fully addresses these challenges. The integration is standardized and fully configurable, data elements are stored in complete and transparent sets, and data aggregation is no longer required. One can quickly see that, from an IT budget perspective, that there is a tremendous opportunity to limit both initial and support costs through the removal of redundant databases and custom integration. This cost/benefit analysis must be clearly quantified in your business plan whether your software decision is individualized or aggregated. There are cost savings to IT here as well, not to mention the obvious benefit to the business, given that any data retention levels required must be aggregated through custom programming on the back end.
However, the biggest benefit to IT is yet to come and it will be fully aligned to your business capability roadmap. Choosing this path will allow you to now fully enable your data-as-a-product offering. SAP provides a suite of applications that utilize the model explained here. As you continue down the Omni-Channel path, enabling business capabilities for Loyalty, e-commerce, Promotions and others, now only require standard integration, with limited high value enhancements, of the application layers to this foundation. Essentially, you can continue to enrich the cost/benefit ratio of implementing this foundation through the implementation of additional applications, while limiting expensive customization and data duplication.
My following blogs will look at these business capabilities and the suite of tools SAP has provided to enable them.