Andrew White
I sat down with a large business applications vendor that sells to retailers and manufactures yesterday, to get an update on their “multi-channel” strategy. Multi-channel, or as we are increasingly calling it, “multicommerce”, represent the complexity in a firm that exists when that firm interacts with its customers (or partners) across multiple channels using different methods. For retailers, this can include store, direct, web, catalog, and so on. For many retailers these channels are not all natively developed businesses, but some are acquired over time by the absorption of a smaller, niche competitor. It is very common in fact to find a retailer with all manner of complex business applications systems loosely integrated in an attempt to align data and processes across channels. The fact is that much of this integration is traditional (unchanged in design or structure for the last 8+ years), weak, and now overly expensive to maintain. The result is often experienced by you and me: we can purchase items from one channel and not return it via another; we can place an order via one channel and experience unrelated customer service on another.
The briefing was very interesting and the focus was more on how this vendor was helping retailers with “multi-channel planning”; how to aggregated forecasts and planning information across multiple channels in one holistic process. I asked of the vendor, what they do to help the retailer integrate the underlying transaction and master data across the different channels.
The response was a very bland “same old thing” answer that talks about “integration the way we have been doing it for years”. This particular vendor does not “get” MDM, or at least does not relate publicly the connection between this latest attempt to unify single view of master data (like product, customer, location, channel, price) and how it will significantly reduce the costs of integration associated with managing duplicate and redundant and inaccurate master data.
This is a great shame, in my view. The retailers themselves are not collectively thought of as visionaries when it comes to MDM – though I met two such rare visionaries at our recent MDM Summit. With the majority of retailers not understanding what MDM should be to their business, and with vendors selling into retailers not really “getting it”, the result will be slow adoption and apathy: not a recipe for significant improvement in retail performance.
Have you seen some good examples of MDM being applied in retail? Do you think your examples are isolated? Do you agree retailers are taking too long, in general, to get to grips with their master data?
Category: MDM Summit Multicommerce Retail Tags: Multicommerce, Retail
3 responses so far ↓
1 Boyd Dimmock March 6, 2009 at 1:07 pm
I share your interest in Retailer’s need for better data management and have seen some recent activity where a retailer is getting significant advantage from implementing a strategy around single view of data. The initiative requires moving data out of it’s silos where the same data exists in different forms. I think the key to success is having the IT leaders and the Business leaders develop a common vision for the project. Usually this involves recogniziing both the added business value as well as the cost savings of managing too many data repositories.
It also helps to find some of the leading industry vendors who do “get it” and are developing solutions that both consolidate departmental data, deduplicate the data, as well as aggregates and syndicates data with internal and external data sources. Then the data becomes truly valuable for actionable merchandising decisions.
2 John G June 17, 2009 at 2:02 am
MDM should be natural to retail when it comes to pricing. E.g. how does Walmart get prices to the stores? Specifically retailers that have different prices depending on location/rent etc.
3 Andrew White June 19, 2009 at 10:44 am
Hi John, thanks for the post. I wish retailers really “got MDM”. Certainly retailers have a great need; many have grown via acquisition and rarely spend the time or money rationalizing systems, processes, or data. The average tenure of the CIO in retail is a lot shorter than for their supplier/partners so the level of “planning” remains much more short tern, tactical, or granular.
I have seen some activity, perhaps most, on “in-bound” product and related data from suppliers; some on “out-bound” multi-channel integration, and much less “enterprise” oriented to connect the other two to the rest of the business. Also, too many business applications – and BI providers – maintain “master data” (or say they do) when in fact they don’t; they master application specific data that may or may not include a reference to master data. This clouds the issue for many immature MDM program managers.
Price is a nasty little problem. Price is not always ‘master data’ in that there are different ways in which price is defined and managed. For some firms there is a standard price which can be managed as if it were master data; for others it is a derived piece of data that does not exist until an order is placed; so the definition of the price can be treated as master data but the actual observation is not. This makes for a good dialog with the business. With agreement, progress can be made.
Retail and how it works (or doesn’t) with their suppliers is a real fertile ground for learning about why MDM is needed, and why it is so hard to achieve. There are tons of politics, culture, technology, and processes barriers.
I am seeing interest in retail again, post economic down turn, so hope springs eternal.