DSR Enterprise Vision
There is a lot of discussion in the consumer products industry today regarding the use of downstream demand data and its potential uses for various parts of the organization. The concept of the demand signal repository (DSR) has gained a lot of attention in recent years, but few companies have thought through a long-term, enterprise-wide vision for how their demand data can be marshaled for maximum company benefit. It is often challenging to think about a long-term vision when driving short-term return on investment (ROI) for a team or one part of the organization. Confusion in the Marketplace
There has been much confusion in the industry regarding the evolving definition of a DSR. The DSR is not just a database of point-of-sale (POS) data that allows one or two functional teams to be more effective. Nor is it simply a reporting tool. The DSR, instead, is an architecture and process built on a solid methodology of integrating and cleansing demand data with other internal data to support ongoing business needs. It is not just about today’s needs; it’s also about the needs of the future.
There are DSR solutions in the market that are focused on traditional “silo” reporting for a specific retailer team or group. In these “team” solutions, there is little ability to expand and scale the solution without extensive and manual coding. Also, with these approaches, we have seen little ability to extrapolate the positive results from one team across the whole enterprise to show significant financial return. As a result, companies have become frustrated in their inability to grow the solution.
Take an Enterprise Approach
On the contrary, an enterprise DSR foundation will allow an organization to realize an ROI in the first phase, and then extend it across the entire retail and corporate landscape. Sustained ROI, over time, can occur in many areas — such as managing out of stocks, supply chain management, new product introduction, trade promotion effectiveness, channel partner relationships and consumer understanding, to name a few. With the right solution approach, downstream POS data and internal operational data can be effectively integrated, enable growth and accommodate rapid change that is part of the process.
Additional Considerations
From our experience, there are key items to consider while formulating a strategic approach for your long-term demand data needs:
Have I factored in the organization change management necessary for success?
While deploying a strategy to enable demand-driven insights, it is critical not to underestimate the importance of process change management as part of the initiative. With POS data, for example, the company may be using data for new purposes in addition to managing requirements that exist today. The decision of an organization to use more downstream demand data, in addition to internal data such as orders and shipments (for example), is highly strategic and may not happen overnight.
How do I know if I have a solution with an optimal architecture?
Ensure your DSR approach can natively integrate Electronic Data Interchange (EDI) and data sources from various database technologies. This is required to ensure the inclusion of internal data sources such as shipments, ERP/SAP data, forecasts and other data sources that will support multiple user groups. The solution should have a solid and open data model that can be leveraged across the industry. It should support multiple business intelligence tools. In addition, the solution should allow the clean POS data to be leveraged into other systems including TPO/TPM, manufacturing, pricing applications, etc. The retail information requires a proper integration and data architecture solution with abilities to consolidate, harmonize and align the data.
What about rapid data evolution and international data?
Ongoing evolution of the DSR will take place, and is to be expected. Requests for new and more information is a sign of success and should be welcomed. This will come in multiple forms: retailer consolidation, UPC changes, restatements of data, new application inclusion and new data sources. Ensure your approach can rapidly accommodate change. Additionally, leveraging international downstream sources is becoming imperative in many organizations. It is no longer just a U.S. opportunity.
What about data security?
From our experience, there are retailers that have very specific security requirements regarding both the use of the data and where it can be housed. Multiple levels of security are needed depending on the user permission and the roles the user has within the organization.
What about analytic performance?
Understanding how the most challenging analytics will perform for end-users on vast amounts of downstream data is critically important. Speed of the analytics will require the correct hardware/appliance choice. Analytics that involve complex algorithms and extreme amounts of data should be looked at closely to ensure they are optimized for performance. Having the right appliance for your specific DSR is a key decision that will help with rapid adoption, and improve ROI.
There are many other questions to consider when determining the right DSR strategy. However, the best foundational solution will allow for both short-term “team” payout and also long-term enterprise growth — enabling maximum benefit for the organization. Taking into account some of the considerations above will help drive sustained success.