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Is Your Data Holding You Back Instead of Driving You Forward?

Adoption of Open Source Technologies is Increasing in Financial Data Management – But what are the Challenges?

By Chris Newbery, industry consultant Retail/CPG EMEA at Teradata.

As with so many things in life, how much you have matters less than how well you use it. Everyone knows that data is vital for success in retail, whether you’re fighting for survival or aiming to thrive in an ever-changing landscape. Retailers and CPG’s must increasingly use this data to get ever closer to their customers, be more responsive to their needs and become considerably more agile in order to drive cost effective growth.

But to do this they not only need sufficient quantity and quality of data, but it must be stored and structured in a way that enables it to be used more effectively and efficiently, transforming ways of working and business processes. Without a clear data strategy though, led right from the top of the organisation, retailers often eat up resources fighting small-scale battles, whilst gradually losing the war.

The global crisis caused by the COVID-19 pandemic has highlighted the multitude of threats faced by retailers. The variety and speed of evolution of these threats, and their ever-changing combinations, make them far harder to counter than any single risk. The shifting shopping patterns and customer needs, the dominance of Big Tech in frictionless ecommerce and the encroachment of discounters to name but a few.

These all lead to rapid and far-reaching changes in customer expectations and behaviours. It’s then the realisation that there are not just one or two competitors that are threatening to eat your lunch, but your ability (or inability) to understand and react to each and every single customer, in a truly personalised and relevant manner, that threatens the future of your organisation.

Constant battles

The response is often to approach each challenge individually. This fire-fighting approach may well be data driven, but it is not coordinated, and is therefore suboptimal and consumes considerable time, money and effort. As McKinsey recently stated“Businesses can waste a lot of energy collecting data and mining them for insights if their efforts aren’t focused on the areas that matter most.”

Often due to a lack of a clear top-down strategy, organisations tend to collect, transform and analyse data to meet a specific threat, which is seldom used to fight the next threat. Retailers that continue to use this fragmented data approach for small-scale digital projects, simply create more and more data silos, which further reduces their agility, constrains value and makes it harder to address new challenges.

Winning the next war

Instead, retailers and CPG’s should be preparing to fight and win the next war. They need to cut through the cats’ cradle of point-to-point integrations and data silos, and start orchestrating their data across the business with an enterprise data strategy. To do so, there are three critical and interrelated elements that are required.

The first is an overarching vision of how data will be used as an asset to add value to the business. All retailers use data to report; for example, pre-canned data from departmental silos to supply dashboards with key performance metrics, providing ‘BI’ type reports to a fraction of their internal consumers. However, to succeed retailers need to think bigger, much bigger.

The retailer of the future will need to use granular and wide-ranging data from internal and external sources to support tens of millions of queries, creating hyper-personalised interactions and hyper-localised offerings with their customers, partners and suppliers in real time. To prepare for this, retailers and CPG’s need to establish a clear vision of how they will use data to serve customers consistently across all channels, outline the precise steps they will take to deliver it, and they need to start now.

The second element is a governance framework that transforms data from a raw material into insights that can be used, and reused, to support all business functions. McKinsey estimate that less than 1% of the data collected is currently analysed. Deciding what data should be used by whom, and for what, and ensuring that it is aligned to business goals and strategies, is critical if data is to be trusted by the business. Insights need to be in tune and in time with business needs. Sadly, many digital transformation and analytics projects are really just science-fair projects that fail to scale or add real value to the business.

Which brings me to the final, and often most overlooked element, culture shift. Data is not something for IT to handle, but a vital part of everyone’s role. Data strategies that reside with IT end up being exercises in cost management, focused on reducing the cost of storing and analysing data. Whereas successful data strategies not only build trust in data to shape decisions across the entire organisation, but look to it as the essential catalyst for transformative change. Comfort, understanding and data literacy across the business are essential for these transformations to be successful.

It’s clear that these changes must be led from the top. Many organisations claim that data is their biggest asset – but still too few CEO’s manage it as such. For data to be an asset it must generate a return through business outcomes, and ultimately the CEO is responsible to the shareholders for delivering return on their investment. This is the step change that successful retailers are making. Orchestrating data across the business to not only to create efficiencies and cut costs, but to act on new challenges and opportunities.

This fundamentally transforms not only the how, but also the what the organisation does on a day-to-day basis. Only then will data truly become the asset that drives the organisation forward ahead of its competitors.

Global Banking & Finance Review


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