Item data: Value Chain Perspective
In Retail, Item is the single most strategic asset whose influence is pervasive across the entire enterprise. And yet, retailers often tend to think about item data in silos. For e.g. - Merchandising team focuses on improving the weight and dimension quality of the product, Finance team is interested in better accuracy for price and cost information while Store operations are most worried about accurate barcode and other labeling issues. Accordingly the initiatives that get most traction are the ones focused on solving the issues faced by individual business units rather than the entire organization.
What often falls through the cracks is the perspective that these are not really different problems but 'one common problem' which is tied to item data quality and visibility. The idea that item data quality impacts all core business functions is not that new but often IT team finds it difficult to articulate the spread of item data related issues and the cost impact that it has on the organization.
Here, a value chain perspective can help provide a framework to retail IT organization to clearly understand and explain all the issues related to item data while also allowing them to create a business case to drive the investment.
Value Chain of Data
So what is the value chain view of item data? To understand it, we need to think about item data along the similar lines as product. Just like physical products, item data is envisioned, created, maintained and consumed by various participants in a value chain which consists of several players across various business units like Supplier, Buyer, Planner, Replenishment Manager, DC Coordinator, Store Manager etc. There is also a time dimension to this perspective, where value is being added to item data at each step as it moves through the chain starting with vendor negotiation all the way through in store sales followed by discontinuation.
When one looks at flow of item data through this lens, it is easy to draw parallels with the supply chain of products. Such a perspective helps identify the problems and opportunities at each node in the chain which can be linked to the larger picture. It also helps identify and associate the losses due to issues at a particular node which can be tied back to overall cost of data issues for the enterprise. In a nutshell, it acts like a dashboard to tell the story about the Impact of bad data on the entire enterprise.
In our experience, we have found it to be a very powerful and effective way to communicate the overall impact of poor item data quality and visibility to business stakeholders. It helps set the right context with the executives and allow them to ask the right questions to make appropriate decisions. We believe that such a perspective can help IT team better articulate the need for item data quality and visibility while engaging business stakeholders meaningfully to make the right decisions.
We would like to know what you think about this approach and better still if you have tried it in your organization, please share your experience. Did it work or not?
This article has been authored by Shachin Prabhat - Principal Consultant (Infosys Consulting). Reach Shachin at Shachin_prabhat01@infosys.com