At a time when fast, accurate decision-making can be the difference between long-term success and dismal failure, how productive is it to spend 14 hours pulling together a sales report — and paying for the privilege?
This was the issue facing Stein Mart, which operates more than 260 stores in 30 states. To facilitate future expansion, the chain needed to upgrade its business intelligence capabilities and transform itself into an information-based culture to meet increased competition and rapid-fire changes in consumer demand. “Business intelligence has become increasingly important,” says Hunt Hawkins, the company’s executive vice president and chief administrative officer. “As we continue to grow and try to improve sales and product, we needed the ability to give store and executive managers greater access to information.” Hawkins’ comments are being echoed throughout the industry as retailers in every segment adopt BI, a broad term covering all software applications used to quickly analyze corporate and in-store sales data and inventory.
Long-term success The need for new systems at Stein Mart was underscored in comments about the chain’s 2010 results from president and CEO David H. Stovall, Jr. “Our long-term success is dependent on gaining more traction in sales growth,” Stovall says. “We are confident our strategies of offering distinctive merchandise at great values, providing a terrific shopping experience and attracting more customers with targeted marketing will enable us to deliver profitable growth.” Toward this end, the chain allocated 2011 capital expenditures of $25 to $30 million to be used primarily for enhancing information systems, as well as store openings, relocations and remodels. “Our legacy system did not keep up with our growing business,” says Ilan Wajsman, Stein Mart’s data systems manager, and the retailer required a “data warehouse that could not only handle the seven-plus terabytes of existing data but could easily be able to scale up.” The result was switching to a BI system on the Microsoft SQL server 2008 built on an HP technology platform. The solution also includes Excel Services in Microsoft Office SharePoint server 2007. The Microsoft SQL Server 2008 platform is an industry leader in both scalability and performance, designed to streamline data processing and help customers more efficiently harness their business intelligence, notes Fausto Ibarra, senior director of Microsoft Business Intelligence. “Not having that data would hinder the executives’ ability to make the decisions that drive Stein Mart’s growth.” This system has become the centerpiece for a mission critical platform that greatly reduced technology costs and enabled the chain to react faster by running sales reports in three hours instead of 14. As Andrew Black, Stein Mart’s vice president and chief information officer, notes: “Cost is a major factor in any CIO’s decision on which BI platform to pursue. I think using the Microsoft solution along with the HP system enabled us to save money on hardware and software as well as staffing. “From an engineering standpoint we could use the team that was in place,” he says, “and we were able to combine our Microsoft BI initiative with a more robust data center and simplification of my hardware architecture. So we were able to offer a better solution in a more secure facility and drive cost savings of $600,000 per year.”
Same-day data As was the case with most retailers, Stein Mart executives met regularly to discuss sales and inventory reports. “They’d compare planned vs. actual sales performance to see what is and what is not working in terms of in-store promotions,” Wajsman says. “It’s critical they received data promptly for every planning session.” The company’s legacy data warehouse system had serious performance problems that led to reporting delays. Moreover, the chain lost business analysis capabilities. “Our business revolves around merchandise reports, but we wanted to become more analytical and be able to do data mining, sales forecasting and analysis,” Wajsman says. “Not having that data would hinder our executives’ ability to make decisions that drive Stein Mart’s growth.” The chain began its BI evaluation process in 2009, eventually choosing the platform from Microsoft. Stein Mart worked with Microsoft’s Gold Certified Partner Pragmatic Works to migrate from its old system to SQL Server 2008 and convert data reports to the new system. With that done, sales data is now loaded sequentially into partitions in SQL using parallel loads. Moreover, the new system uses data compression to shrink the digital footprint of the company’s data warehouse to less than two terabytes. The result is that sales reports are produced much faster than in the past. This is also important for store managers who can now have in-store performance data at their fingertips — information that supports actionable decisions that can improve sales the same day. “The system has a dashboard that enables store managers to come in in the morning and review business from the day before by division and department level and to make adjustments accordingly,” says director of store communications Scott Breedlove. And all this can be done at a reduced cost. “In fact, hardware leasing and maintenance costs were reduced by about $50,000 per month,” Wajsman says. “We’ll be able to eliminate 95 percent of the monthly costs related to the previous system.” Another bonus is that Stein Mart employees will no longer have to spend time managing servers as they did with the previous system. “Maintaining that system required multiple employees with diverse skill sets,” Wajsman says. “We need fewer people to operate the new system [and] the time savings helps us focus on business and customer challenges rather than technical ones.”