In-Depth
IBM Cognos Introduces All-in-One BI Solution for Retailers
A punishing business climate provides an opportunity of sorts -- for companies willing to grasp it.
It's a brutal time for retailers; sales plummeted during the all-important Christmas buying season (chalking up near double-digit declines in some cases). Even low-cost specialists such as Wal-Mart increased revenues by just 1.7 percent, missing analysts' expectations.
The irony, claims Jim Zalles, a retail business intelligence consultant with IBM Corp.'s Global Business Services (GBS) outfit, is that brutality of this kind presents an opportunity for retailers willing to grasp it.
IBM recently announced Retail Performance Analytics (RPA), an all-in-one bundle -- comprising Cognos client software, DB2 data warehouse assets (and WebSphere DataStage integration plumbing), and, of course, GBS services -- that it says can help retailers rapidly deploy and derive value from retail-focused analytics. It's an especially topical offering, according to Zalles.
"Almost all the retailers that I deal with -- from the sort of top-tier retailers down into the general business marketplace -- already have invested in the infrastructure for business intelligence, so they already have either full-fledged data warehouses or they have targeted data warehouse solutions (data marts) that allow them to do some form of analysis on their customer data. What's missing is the tools to actually leverage that," he comments.
In most cases, not leveraging it -- or not getting the most out of it -- is to squander an enormous investment, Zalles maintains.
In the retail segment, as elsewhere, a lot of shops are still getting by using from-the-hip, Excel-driven analytics, Zalles indicates. This is a workable but by no means ideal approach, he argues, noting that it has the effect of disenfranchising -- or of reducing the effectiveness of -- those who don't use Excel.
"The vast majority of retailers that I've ever dealt with are Excel junkies. They're very, very good Excel junkies. They run the business on Excel spreadsheets. In this day and age, you just can't run your business on Excel anymore," he observes, "so in most [organizations], you have that Excel group. Then you have another group of people who use the BI tools in their ERP. … You also have a third group of people who use business intelligence tools, like Cognos, like Business Objects, like Microsoft, like Hyperion. What you're seeing now is the market's moved away from that because of all of the complexity."
There's a concomitant focus, Zalles continues, on targeted vertical solutions. RPA is IBM's retail entry, but Big Blue has similar efforts incubating for financial services, pharma, telecommunications, and other verticals. The days of buying BI and implementing it in a general sort of way --- driven chiefly by production reporting (with ad hoc activity thrown in for good measure) -- are on the wane, he maintains. Targeted, vertical offerings such as RPA not only give users analytic front-end tools custom-tailored for (in this case) retail use cases, but -- on the back-end -- provide retail-oriented plumbing (data models, product- and customer data- management tooling), too.
"We're upgrading the Excel spreadsheet guys to give them a proper set of analytics … so they can spend their time trying to do analysis rather than gathering data trying to figure out what the data is trying to tell them," he comments. To that end, the Cognos portion of RPA delivers out-of-the-box features to optimize such elements as on-shelf availability or product aging, Zalles indicates.
"That's sort of the retail-specific solution that we're pitching to customers. People are very much moving away from business optimization-type of solutions, so fewer people are going to run out and buy an end-to-end ERP solution, which is multiple years [and] many, many millions of dollars. What they will do is look for business optimization solutions that allow them to get the most of their investments in these leaner times."
RPA itself is the culmination of an integration activity that IBM kicked off more than a year ago, shortly after it first announced its intent to acquire Cognos.
"Before [RPA], we had something that we called 'RBiz.' Essentially, [a group of] IBM kits sort of bundled up into a data warehouse-in-a-box type of scenario. So we took the Balanced Warehouse with DB2, we took [WebSphere] DataStage, we took the retail model and then the retail business solutions that came with the retail data warehouse, and packaged that up into a retail BI offering," Zalles explains.
"What was missing was a front-end for that solution. We essentially acknowledged that every retailer was going to have their own BI and PM tool, and we basically concentrated on providing the analytics infrastructure that would underlay that. When we acquired Cognos last year, that filled in that gap." Enter RPA: "It's sort of the synthesis of the Cognos performance management offerings and the Cognos BI [offerings] into the existing analytics infrastructure, with all of the improvements that IBM has made into their data warehouse infrastructure over the last year."
Business intelligence and performance management players like to talk up the crucial topicality -- the urgency, even -- that their products tend to take on during times of business tumult. Zalles, too, outlines a scenario in which retailers must spend money -- in this case, he argues, a little more money (relative to the significant chunks of money that they've already invested in their DW infrastructures) -- to survive. In some cases -- he cites UK retail grocery powerhouse Tesco PLC -- ambitious retailers can emerge from even a deep recession in positions of considerable strength, at least relative to competitors.
"In the UK, the last recession gave birth to Tesco, and while everyone else was shrinking and sort of protecting their turf, Tesco was taking this and making investments and growing, and they clearly came out as the winner," he points out. "It's clearly a challenging environment; these are not the boom years anymore. There are going to be clear winners and clear losers. I think the clear winners are … preparing the technology, the tools to take advantage of their infrastructure [investments]," he comments.
In this respect, Zalles suggests, the industry might be moving en masse in the direction of more specific BI, with a handful of BI platforms, perhaps, to rule them all -- namely, IBM/Cognos, Microsoft, MicroStrategy Inc., Oracle/Hyperion, SAP/Business Objects, SAS Institute Inc., and Teradata Inc. -- which are complemented by industry-specific offerings, similar to IBM's RPA.
"Repeatedly, what our customers have been telling us, especially in the services arena, is that they want to talk to people who understand their businesses, so we've been moving principals into industry-aligned teams. When I go and talk to retailers, they know that I'm not just a BI guy who can talk about BI. I'm a retail BI guy who can talk about retail, and I understand how to put together solutions that are specific to the retail industry. I have counterparts in financial services, pharma, and [in other industries]."