IBM Retail Business

Intelligence Solutions
Retail RBIS/Cognos Solutions
Overview

Agenda

Information Management Approach

Overview of RBIS and Cognos
Case Study
Value Proposition

Becoming customer focused requires bringing together a

customer view with a traditional product view
Traditional inside-out view is constrained by
organizational silos and only product focused
Separate marketing
plans by channel

Assortment
planning doesnt
reflect customer
needs

No access to
inventory
availability; staffing
based solely on
cost
Inventory
management
doesnt span
channels

What the
Customer Sees

I see different
promotions online
and in the store for
the same item

I cant find clothing

items that fit my
particular lifestyle or
needs

Mass market
approach to
promotions

I wasnt able to
reserve an item from
the website and then
go pick it up in the
store
I can never find anyone to help
me and if I do they cant tell me
whether a product is in stock or
not
The emails I receive from
this store are usually a
waste of time

Add & Integrate the

Customer View
Adding the Customer View creates a cross organizational
common view of the customer and business
Marketing plans
coordinated across
channels

Inventory
management
across channels

Assortment
planning reflects
local market and
customer needs

Promotions and
offers tailored to
each customer
segment

Inventory availability provided to associates; staffing

balances cost with customer needs

Promotions are the

same on the website as
in the store
I can always find clothing
that suits my tastes and
needs

Creating
Advocates

I can reserve items or

purchase items online and
pickup them up in the
store

I can always find someone to answer my

questions and tell me whether the product
is in stock or not

The emails I receive from this store

are always relevant to what I have
purchased or might need

Customer focus and detailed views of information highlight common

fundamental information issues

Multiple versions of the truth

Problems managing customer, item, vendor, and location data and interactions
Regulatory compliance inhibited by poor transparency

Lack of trusted information

Incomplete, out-of-date, inaccurate, misinterpreted data
Difficult to understand or control how information is used

Too much information and not knowing whats important

Not using demand signals to drive supply chain
Not using customer analysis to tailor marketing and sales
Not leveraging valuable unstructured information

Lack of agility
Inability to take advantage of opportunities for innovation
Escalating costs due to inflexible systems and changing needs

The IBM Retail Business Intelligence Approach

Inventory Analysis Pricing AnalysisMarketing Analysis Financial Analysis

Financial

Applications

Sales
Merchandising
Planning

RETAIL EDW

Analysis

SAP/BW

Current Operational
Sources

Diverse Information

Dashboards
Data Consolidation
&Validation
Interactive Analysis

Real-time Analysis

Expanding User Communities

Operational
Sources

Why do I need a data warehouse?

Corporate
Finance

Sales

Customer
Management

Purchsg
Inventory

Order Mgmt

Credit
Card
General
Ledger
Hr
Payroll
Cash
Mgmt
Investmnts
Other
Apps

Retail Data Warehouse

9
9
9
9
9
9

Enterprise Wide
Consistent Reporting
Reuse of extracts from Operational Sources
Cost Effective Reporting
Support all types of Sources & Reporting Apps
Proven Scalability

Merchandising
Management

Product & Services

Management

Store
Operations

Retail Business Intelligence Solution includes hardware, software and services packaged
to deliver targeted retail functionality and insight

Retail and BI ISVs

GBS Retail And Business Intelligence Services
Retail Business Solution Templates (RBST)

BST: MOLAP Models and Cubes

BST: Reports and Graphs

Pre-defined Accelerators/Cubes and Reports

RDW Relational Model (RDWM)

Data Warehouse Structures and Summaries Logical
Reference Architecture
RD
WM

TSD
M

Retail Services Data Model (RSDM)

Industry Definitions, Concepts and Classifications Metadata

Balanced Configuration
Unit (BCU) Retail Optimized Business
Intelligence Infrastructure
(integrated and performance
optimized - server, storage and
software)

DB2 Data Warehouse Edition

IBM Information Server

Intelligent Miner

p/xSeries Server
Total Storage

BCU 1

p/xSeries Server
Total Storage

BCU 2

p/xSeries Server
Total Storage

BCU N

Retail Major Analytic Process Areas

Merchandising

Supply Chain

Stores/Channels

Customer Mgmt. and

Marketing

Maximize
Merchandise

Focus the
Supply Chain

Revolutionize
the Experience

Motivate
Shoppers

Retail Business Intelligence

Assortment
Allocation
Inventory
Physical Merch
Space Mgmt
Pricing
Promotion

Business Performance
Planning
Forecasting
Product profitability

Store Location
Store Optimization
Suspicious Activity
Activity Based Costing
Location Exposure
Location profitability
Loss Prevention

Campaign & Promotion

Cross Purchase Behavior
Cross Sell
Cust Attrition
Cust Complaints
Cust Credit Risk Profile
Cust Delinquency
Cust Interaction

Embedded mining used to get deeper insights

Market Basket Analysis
Avoid OOS for associated items during promotions
Shelf/Web/Flyer layout
Increase high margin item pull

Next Logical Purchase

Promotion Targeting
Easy way to predict purchases

Store Segmentation
Individual view of store for category managers.
Automatic planogram creation
New store assortment

Customer Segmentation

Target marketing
Define offerings to attract desirable segments
Tiered loyalty
Programs to migrate customers to more profitable segments

BSTs and Report Templates

Purchase Profiles BST

Product Group Average Sales Quantity per

Transaction

Product Penetration (to Geography, geodemographic mix)

Customer Profiles BST

Customers Attribute report

Percentage Sales by Customer Segment report

Product Purchasing Recency, Frequency & Quantity

6 Month Customer Age Group Segment RFQ

Business Performance Analysis BST

Vendor Performance sales reports by vendor

Vendor Compliance - billing, delivery

Product Analysis BST

Product Performance by Store, Geography report

Product Category Performance report & Drill Down

Physical Merchandising/Space Management

Demographic Response to different Layouts

Category Profitability to Physical Presence

Optimization of Linear Footage to total store

Section elasticity / adjacency

Campaign & Promotion Analysis BST

Sales Performance by Campaign Response

Target Product Analysis BST

Average Transaction Quantity & Value

Customer Acquisition & Defection report

Segment Migration Comparison report

Market Basket Analysis (Clienteling)

Cross Merchandising (whats in a basket)

Demographic profile to market basket

Inventory Analysis BST

On Order V On Hand

Days of supply

Out of Stock .. by Product

Slow moving inventory report

Assortment / Allocation Analysis BST

Product Affinity

Product to Customer Profiles

Pricing Analysis BST

Markdown Trend report

Price Elasticity report

How do I get Started?

1

ADDRESS
Initial
Reporting
Needs

DRIVE
Insight
through
BI

EXTEND
BI
EnterpriseWide

ADVANCE
Performance
Management

Reporting is Typical First Agenda Leading Business Intelligence

Initiatives
Reporting-led business intelligence initiatives provide a proven,
pragmatic approach to implement Performance Management
Initial focus is on meeting the organizations reporting needs
Most organizations are still in stage 1 or 2 in their journey but
recognize the need to move to 3 and 4

Introducing IBM Cognos Business Intelligence

Complete range of BI capabilities in a single product, on
a single proven Web services architecture
Zero-footprint, Web interface for all users
Standardizes the delivery of information to accelerate
and improve decision-making
Foundation for performance management

Web

Office

Mobile

Search

Why?
Reporting

Analysis

Dashboards

How are
we doing?

Scorecarding

Breadth and Depth of Reporting

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Managed Reporting

the ability to create standard reports

every quarter for our account managers,
branches and regions.
Bank of Austria Creditanstalt

Managed Reporting
We cannot keep up with the user requests

Requirements
One to many reporting
Flexible prompting and bursting

Users
Professional author design
Distribution across the enterprise

Primary Data Sources

Data Warehouse
Operational Stores

Example: Sales Report By Region

Business/Ad Hoc Reporting

End users no longer have to wait for IT to

build a report. Instead they can author their
own reports at any time.
Mold Masters

Business / Ad Hoc reporting

We get a lot of last minute requests and scramble to deliver answers

Requirement
Example: Inventory Level Product X
Interactivity & flexibility
Self service design
Financial information

Users
Information worker
LOB manager

Primary Data Sources:

Data Warehouse
Relational
OLAP

Production Reporting

we register more than 46,000 transactions

every day and the sheer quantity of data makes it
essential for us to know exactly where follow-ups
are needed .
DHL Worldwide

Production Reporting
We need to provide high quality detailed reports both internally & externally

Requirement
Large volumes
High fidelity formatting
Users
Designed by IT developer
Consumed by customers,
suppliers
Data Sources:
Transactional sources
e.g. Operational data stores

Example: Invoice for Purchases

Analytical Reporting

Managers can slice and dice this

information to reveal key trends such as
changes in average wage per store year-overyear and productivity per sales associate hour
American Eagle Outfitters

Analytical Reporting
We have users who need to see the trends at a macro level

Requirement
Slice and Dice
Predictable performance
Users
LOB managers
LOB analysts
Data Sources
Data warehouse,
Relational
OLAP sources

Example: Revenue by geography by

date by sales person

Operational & Transactional

Reporting
Our customers want immediate access to
their records & profiles to help make financial
decisions

Blue Cross Blue Shield Tennessee

Operational & Transactional Reporting

We have many requests for up to the minute data

Sweet Spots
Example: List of Product Transactions
Integration & Access to core
systems
Leverage enterprise architecture
Users
Designed by professional authors
Distribution across the enterprise
Primary Data Sources
Transactional
Financial Systems (P/L reports)

All BI Capabilities in One Product

Full range of BI capabilities needed to improve
decision-making and manage performance
Cognos 8 BI

Query
Reporting
Dashboarding
Analysis

Scorecards
Event
Management
Planning

Eliminates need for multiple BI tools,

lowering costs and easing standardization

Query
Browser based self-service reporting for end users who
like to create their own reports or collaborate with others

Reporting and Dashboarding

Fastest time to create and deliver any report and
full report coverage including business,
production, dashboard and personalized reports

Analysis
Guided multidimensional exploration as
well as comparative capabilities for faster
more manageable analysis

Scorecarding
Align individuals on the key business metrics and drive users to
understand what is happening, who is accountable and who is
taking action

Event Management
Alerting and Process Integration for automatic
management and fastest time to action

Planning Integration with Cognos 8

All BI capabilities
against all planning
data
Live plan, published
plan, workflow
Standardized delivery
of planning information
Planning data united
with all other enterprise
data sources

Cognos 8 BI provides the foundation

for performance management

Microsoft Go! Office

Extend the reach to business users who live in Microsoft
Office through a live and smart client application

Cognos Go! Mobile

Provides users with the ability to
make decisions in context, anytime,
anywhere

One Product, One Architecture

USER
Zero Footprint
Task-Based Interfaces

WEB, OFFICE, MOBILE, SEARCH

REPORTING

QUERY

ANALYSIS

DASHBOARDS SCORECARDS

SERVICES
Purpose-Built Web
Services Architecture

DATA
Open Data Access

INFORMATION

Transaction
Systems

MANAGEMENT

Warehouses
(Relational & OLAP)

FRAMEWORK

Flat, Legacy
or Modern

Retail Performance Blueprints

Store P&L Operations
Revenue, Labor, Controllable
Expenses, Initiatives
Store Development
New stores, upgrades, remodels
Promotion Planning
Marketing spend, campaigns,
vendor trade fund compliance
Strategic Merchandise Planning
Annual target setting by division,
channel
Calendaring, spreading of targets
Merchandise financial planning
Stock valuation

Performance Management Success in Retail

General Retail

Food & Drug

Restaurant Chains

Sample Case Study :

Retail Business Intelligence Solution at Target
Challenge
Create support for and implement an enterprise data
warehouse solution including:
CRM Analytics
Financials Analytics
Credit Analytics
Others (e.g. Merchandising) on the horizon
Solution
IBMs Retail Business Intelligence Solution
Retail Data Warehouse Model (RDW), Retail
Business Solutions Templates (RBSTs), Retail
Services Data Model (RSDM)
Consulting Services
DB2 Data Warehouse Edition
Benefits
Integrated view across the company
Visibility to complete profitability picture

Gartner - Magic Quadrant for Business

intelligence services, 2007

Item Affinity What sells together

Days of Supply Drill Down

Where clients see value

Targeted analysis for Merchandising, Supply Chain, Multi-Channel and Store Applications

Faster Time to Value

Retail Model, Pre-built BSTs and implementation methodology are proven accelerators
Mining capabilities are embedded in the DB and thus do not need 3rd party tools

Lower TCO Look at all costs and over a 3 5 year time horizon
Open standards & Industry Standards
Expanding ecosystem of Application tool providers

Solution Performance
DB2 and System P at the core are proven, scalable products
Hardware and Software have been optimized for data warehousing

Long Term Viability Competitors have numerous distractions (spin-offs, IPO, etc.)
IBM has invested over $1.5B in Information Management in the last 18 months