Achieving a Single Version of the Truth

How many times does this happen in your company? You go to a meeting about sales performance, and marketing says it thinks sales are up 3.5 percent. But the merchants disagree and say sales are up 6.3 percent. The specific numbers in this example aren’t important; the point is the two figures aren’t close. And that’s the reality in most companies today.

Here's another example: Management has tasked you with developing a report. Your first step is to look back at prior results, maybe from a season or two ago. How many different versions of the sales, purchase and inventory plans are there? Which ones are the actual and which were prior versions?

Some might say we can do a better job controlling and eliminating versions of plans, which is certainly true and something every company should work toward. Or that if we use only one enterprise system, we can eliminate this dilemma. But that isn’t really the solution; such systems aren’t viable for most companies. Plus, there are multiple data elements that are all valid for whatever processing system is used. There just isn’t a “single version of the truth,” one official set of figures for sales, inventory, plan, history and so forth.

Take a product’s inventory, for example. You can find sales plans on user-derived Access systems or Excel spreadsheets. A product’s inventory on hand in units and dollars is tracked on your order management system. A separate, best-of-breed warehouse management system also includes the same product on hand but needs to be synced up daily. The finance system also carries the total company inventory in dollars — probably not updated in real time, but daily or weekly. You also may have a specialized, stand-alone forecasting and inventory management system to project inventory by promotion or catalog campaign.

Additionally, because the major transaction systems require a high degree of training, management doesn't use them as the source for its information. Management has to go to extremes to get what it needs, either by asking department managers to pull data or by using business analysts to come up with reporting. Because these are manual efforts using sources not originally geared to management’s needs, they're delay-riddled, error-prone processes. And they still don’t deliver a “single version of the truth.”

You get the picture. There simply isn’t a “single version of the truth” for the major data elements used in many businesses. For management to have confidence in the integrity of the data it gets, the time has come to advocate and budget for projects that resolve these problems. Such problems aren't new, and they inhibit the effective management and growth of direct businesses.

Here's a hierarchy of solutions you should consider:

• extract data from major transaction processing systems into Excel or other reports;
• access databases and business analysts using online analytical processing tools;
• data warehouse products; and
• business intelligence systems with dashboards and analytics.

As the new year approaches, it’s time to lobby management for solutions to this problem, especially in this economy, where knowing exactly where you stand is essential. You only can control expenses and inventory, and know which products and promotions are working — and which aren’t — if you have accurate data on which everybody across the company can agree upon. In our experience, companies that use business intelligence systems to overcome such information problems have been successful in getting positive ROI from these types of systems within 12 to 18 months. In today’s business environment, that’s a “single version of the truth” on which all companies can agree.

Brian Barry is senior consultant with F. Curtis Barry & Co., a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory and benchmarking. Learn more online at www.fcbco.com.