CASE STUDY - Business Intelligence Does Compute for CompUSA
Commentary by Dennis Naherny, Director of Enterprise Data Management, CompUSA
Connected systems increase customer insight and decision making; realize over $6 million ROI in phase one of project
As the largest computer retailer in North America, CompUSA is in the business of helping customers improve their personal and business productivity through technology. When CompUSA looked for ways to improve its own productivity by gathering its sales information from disparate databases into a central data warehouse for analysis, it searched the market and determined that the best platform was Microsoft Windows 2000 Advanced Server and Microsoft SQL Server 2000. Now the company has greater flexibility to gather reporting information based on management needs.
The name of the game in retailing is to be the first to recognize sales trends, which is all about knowing your customer. But collecting and analyzing customer information can be a challenge when you are CompUSA, which has more than 200 stores located across North America.
CompUSA isn’t a newcomer to using technology. It has a point-of-sale retail sales reporting system running on an IBM 4690, an SAP system running on Microsoft SQL Server 2000, and a collection of Oracle databases. “In a lot of cases, we’ve had to build or purchase point-solutions to accommodate business exceptions,” says Cathy Witt, CompUSA vice president and chief information officer. “But the result is complexity of systems, lots of interfaces, and multiple databases. Trying to get the data into one spot for easy reporting and analytics has been a challenge for a long time. We needed an inexpensive place where we could dump this data and get it all together and do something with it.”
CompUSA needed a system with the ability to transform raw data into high-value business intelligence. The company saw a big opportunity in solving this problem: “Almost anybody can sell a computer, so what’s going to give us the competitive edge over our competitors is the ability to gather the data from all our systems and present it in a way that is easy for our people to slice and dice,” Witt says. “This is how we learn how to take a sale to the next step. This is how we keep the customers coming back, because creating loyal repeat customers is what you want to bank on.”
Another part of the situation was a need for a fast project timeline, while keeping costs to a minimum.
The CompUSA information technology team, which has experience with a range of platforms and databases, chose a solution based on the Microsoft Windows 2000 Advanced Server operating system and SQL Server 2000 with Analysis Services and Data Transformation Services.
Completing the solutions were products from two additional companies, which were suggested to CompUSA by Microsoft Consulting Services (MCS) as part of a bundled solution. ProClarity Corporation’s ProClarity Rich Client was deployed in stores as a Web access thin client for reports, and ProClarity Desktop Client, which provides additional reporting functionality, was deployed in regional and corporate offices. MATRA Systems’ Freedom-ISP was used for reading proprietary IBM format from the transaction logs of the point-of-sale devices for input into SQL Server and SQL Server Analysis Services. Users from stores, regional offices, and corporate headquarters were interviewed to determine the most valuable reports, which are delivered through ProClarity using SQL Server Analysis Services. Reports can be customized for the user base.
Based in Dallas, TX, CompUSA is the largest computer retailer in North America, with 240 superstores in 90 major metropolitan markets.
CompUSA required a data warehouse and business intelligence system to interoperate among its disparate legacy databases, and required a flexible, robust reporting system to provide analytics on a per-store, regional, and national basis.
A solution using Microsoft SQL Server made use of ProClarity Rich Client deployed in stores as a Web access thin client for reports, and ProClarity Desktop Client to provide additional reporting functionality deployed in regional and corporate offices. CompUSA recently upgraded its data warehouse from 32-bit to 64-bit servers running Microsoft Windows Server 2003, Enterprise Edition, and Microsoft SQL Server 2000 Enterprise Edition.
- Store managers are able to easily access information that had previously been in three separate systems.
- A corporate-level daily Tracker report captures a half-dozen key metrics that senior management wants to see every day.
- A first-year ROI of $6 million encouraged CompUSA to move from tracking POS sales data to importing financial, merchandise management, retail analytics, and inventory information into the data warehouse; customer analytics are the next planned addition.
“As our business information needs grow, ProClarity continues to play a key role in CompUSA’s business intelligence strategy,” says Dennis Naherny, director of enterprise data management with CompUSA. “Because ProClarity is so tightly integrated with the upcoming release of Microsoft SQL Server 2005, we will be able to take advantage of the enhanced BI features and new functionality in both product lines.”
The Power of Knowledge
CompUSA has made good use of the business intelligence it has been able to harvest from its data warehouse. From the floors of the stores to corporate headquarters, CompUSA workers are putting their vast reporting capabilities to work. In addition to improving the bottom line, the company wanted a reporting system that would make life easier for store employees.
“The data warehouse is an excellent tool,” says Landon West, a store general manager with CompUSA. “It brings together information that used to be in three separate systems. I use the data warehouse every morning to pull all my sales information. I begin with a global look at the sales for our region and division. Then I break it down into categories such as the services department to see how I ranked among the other stores in the area. I look at return rates. I look at our margins, at accessory sales, and at the total sales package. The reporting system, in a very short period of time, lets me categorize information, grab data, manipulate it, and massage it into information that helps me do a better job each day.”
The reporting system provides value at corporate headquarters, too. “We have a daily report called the Tracker that captures a half-dozen key metrics that senior management wants to look at every day,” says Steve Ellison, senior director of store operations for CompUSA. “The Tracker lets us closely observe the major drivers of our business. We are able to see product relationships and margin-enhancing capabilities that we’ve never had the ability to see before.”
Anticipated ROI of U.S. $6 Million a Year
Phase one of the CompUSA deployment focused on generating sales reports. Phase two integrates order-entry information to drive aftermarket opportunities (such as selling a technical assistance program) and to better track inventory to prevent loss and fraud. CompUSA sees its data warehouse providing significant opportunities and a good return on investment (ROI). Phase three brought inventory information. Customer analytics are the next item planned for integration.
An early benefit came from CompUSA’s ability to use order-entry information to drive aftermarket opportunities, such as a technical assistance program, and to better track inventory. “We saw a $6 million ROI with just the first phase of our data warehouse, and that’s a very conservative estimate,” said Witt. “Our total ROI is higher now that we have deployed three phases of our data warehouse.”
Witt knows that the market doesn’t stand still—nor does the ever-changing need for information about what the market is doing. Witt values the agility she gains from Windows 2000 and SQL Server 2000. “This is a system we will be able to keep updated with the latest and greatest technology,” Witt says. “We’ll be able to grow it and change it. I know that because we’ve already done it twice since going live. So we know we can turn on a dime. And turning on a dime is what gives you the cutting edge in the retail business.”
This article originally appeared in the issue of .