Handling people issues key to HBC

Data is everywhere, but useful information is in short supply. Many companies have or are planning to put in place a business intelligence (BI) system to transform all that leaden data into golden information. About 22 per cent of Canadian companies have BI in place, while another 34 per cent plan to invest in one over the next three years, according to Jeff Dutrizac, a research analyst at Info-Tech, a London, Ont.-based research consultancy.

On the BI technology front, what you can do is only limited by time and money, said Diane Drotos, director of BI at the Hudson’s Bay Company (HBC). But there were significant people and change management issues in the course of HBC’s BI implementation project that had to be overcome.

Drotos gave a summary of her firm’s BI story during last month’s Teradata conference held in Orlando, Fla.

The impetus for the project began several years ago, when HBC changed its business strategy. The company had five banners operating as silos: The Bay, Zellers, Home Outfitters, Designer Depot and Fields. Each store had its own credit card, and under the old Club Z system, customers could only collect reward points from a single store. The company decided to reorganize the five under a single HBC umbrella brand to deliver integrated customer service and offerings.

Implementing a BI to consolidate information was crucial to this undertaking. But each banner applied its own business rules to its data. For example, gross margin for one business unit was defined and computed differently from another.

Well before the actual implementation began, HBC conducted a separate BI business project to get consensus on the rules, an initiative that had its own project manger, budget and timeframes. This was a major achievement it itself for HBC, said Drotos, accustomed to operating in a banner-specific fashion.

“If the business units are not prepared to sit in a room and come up with common definitions and say, ‘Yeah, I’m going to give up whatever I used for reporting before,’ the best technology in the world will not solve the problem,” she said. Info-Tech’s Durtizac agreed: “A BI implementation is absolutely a catalyst for change.”

Drotos’s team anticipated potential user acceptance problems when the implementation began. Users accustomed to receiving information in a banner-specific way might assume the information generated by the new BI was wrong. To counteract this, her team communicated and emphasized that information and reporting would be different, but not wrong.

Despite much work put into user consensus and quality assurance, some issues nevertheless cropped up after the rollout. The business committee had originally agreed that exception reports would only provide flagged information based on a particular threshold, for example, if sales were down 10 per cent for an area – essentially leaving it to the BI system to show users what areas to focus on. But people accustomed to data dumps of all the info for a given area initially distrusted the exception reports.

Drotos’s team earned their trust by accommodating their requests to see all the underlying data by developing a colour-coding scheme for exception reports, based on the usual red-yellow-green system.

“They need to be comfortable with what’s there, and that the areas of focus really are right. Over time, we believe they’ll migrate to just asking specific questions such as, ‘Show me where sales are down from last year,’” said Drotos.

In spite of the teething pains, the BI rollout at HBC was well worth the effort: the company has enjoyed a 300-per-cent return on its BI investment, identified through areas such as reduced excess inventory, lower labour costs because relevant information is easier to find, and a reduction of lost sales during promotions.

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