Implementing BI and understanding the value of such investments

CORE BUSINESS: Canadian Tire Corporation (CTC) is an enterprise that includes a network of businesses including retail, financial services, and petroleum operations. CTC operations were divided into five main categories including Canadian Tire Retail (CTR), Canadian Tire Financial Services (CTFS), Canadian Tire Petroleum (CTP), and PartSource (specialized automotive product servicing company), and Mark’s Work Wearhouse (retail provider of casual and work wear for men and women)  

MARKET TRENDS

Competitive market forces within the retail sector: Historically, retail organizations have invested significantly less than other industries in IT infrastructure (2% versus 5% revenue expenditure, respectively). They had traditionally focused on POS and supply-chain management. However, due to increasing competition, retailers began switching to Business Intelligence to improve sales and better serve their customer base. Recently, however, large North American companies with sales over $1 billion intended to make Business Intelligence (BI) analytics their second-largest IT investment after their Web Portal investments. 

Business Intelligence: Consolidation and analysis of internal/external data to enable effective decision making. At the core of all BI initiatives, there is a data warehouse that contains the data and analytics software that stores data from operational systems in the organization and restructures it to enable queries and models to extract decision support reports. The BI industry is expected to grow from $30 billion to $75 billion by 2005

Challenges: Despite the benefits from BI and data warehousing investments, implementation of these projects consumed huge organizational resources and was difficult. Some of the challenges to achieve success in implementing BI were related to budgetary constraints and their justification, understanding and managing user expectations, and logistics related to its implementation.

HOW BUSINESS INTELLIGENCE ALIGNS WITH THE CORPORATE VISION AT CTC

Change of image: Development of the Information Warehouse (IW), which was implemented by the CTC IT group, was prompted by a paradigm shift in CTR’s image from a wholesaler to that of a retailer. This meant that more data was required in order to begin analyzing data like a retailer, including sensitization to product, store, and margin trends. This eventually led to the development of the Finance Retail Analytics Group (FRAG) that fulfilled the marketing needs at CTC and provided the relevant reports that enabled strategic business decisions.

Barriers to BI success at CTC:  Despite the vision, there were a few transitory challenges that CTC had to address prior to integrating BI with their daily business operations. 

1. Resource constraints: Due to limited resources, storage and querying of the IW was not possible. While this cut down query duplication, it resulted in limited data access across the breadth of business operations
2. Lack of standardized definitions: This meant that the same IW could be interpreted in different ways by different users. For instance, depending on the interpretation, one could end up with six different levels of inventory. This delayed the decision-making process.
3. Lack of available data: Multiple data resources were not available. Thus, the data model was not exhaustive and failed to reflect the data requirements of the business. 

REMEDIAL MEASURES TO ENSURE LONG-TERM SUCCESS OF CTR WITHIN CTC 

The retail IT segment within CTR identified several short-term initiatives, including development of dedicated resources to implementing quick-win projects and finalizing a detailed strategy-and-planning document to guide business operations for the next three years. Broadly, they intended to address the aforementioned challenges through

1. Systemic information sourcing and organization: developing standardized data formats and a central data warehouse. Essentially, this would collate, organize, and provide easy access to data and meta-data.
2. Developing data marts/views: To enable timely decision-making while masking the complexities associated with access to the full corporate data structure. 
3. Quick-win assessments: These comprised short-term IT projects that improved BI capabilities and provided users with new information. These included opportunities such as providing access to daily promotional sales data and market-basket analytical capabilities

RECOMMENDATIONS FOR FURTHER IMPROVEMENT

1. Data privacy: While there is emphasis on improving data auditing and archiving, issues such as privacy and security are important within the retail IT segment to ensure integrity of the data. The current and the future IT system do not factor this within the scheme of priorities.
2. Data cleansing and governance: Detecting and removing data that is out-of-date (incomplete or redundant) is considered to be one of the most important, costly, and time-consuming activities within any BI initiative. Further, identifying irrelevant information is not confined to the IT department. This requires a collective engagement of the HR, Operations, Marketing, and Vendor divisions within CTC. 
3. Senior management commitment: Finally, for most organizations, an enterprise-wide approach to managing data analytics is a major departure from the current practice. Therefore, a robust IT infrastructure needs to be well-supported by a committed senior IT management, which must establish and rigorously enforce data management policies and high-quality data that is scalable, well-integrated, and consistent.