IBM Software Retail

Thought Leadership White Paper

From touch points to turn rates

Charting a road map for retail success with BPM and decision management

From touch points to turn rates

Contents
2 The complex, dynamic business environment facing retailers 3 Prescribing a road map for scalable solutions to drive business agility 4 Taking the rst step with business process optimization 6 Taking the next step with decision management 8 Taking it to the next leveldelivering insight when and where it matters 13 Driving business agility to address core business pains 14 Future-proong for success in a dynamic retail network 15 Getting started on a sure path to business agility Retailers operate in a complex business environment marked by dynamic change and compounded by better-informed customers demanding ever-increasing levels of personalization and customer service. If an organization cant meet their needs, customers will quickly take their business to one of the many

increasingly sophisticated global competitors. Meanwhile, the embrace of new technology helps them broadcast their dissatisfaction far and wide with a few mouse clicks.

The complex, dynamic business environment facing retailers

The retailers expanding business network involves complex relationships between customers, suppliers, partners and vendors. Todays retailer is increasingly challenged to adapt and respond as these business networks become broader and increasingly dynamic. In addition to this complex dynamic, a greater number of critical functions are taking place outside of the business, requiring improved collaboration within and outside of the retailers organization. In a recent IBM study, 87 percent of CIOs interviewed declared that their organization will be more collaborative in the next ve years. As more functions move outside the walls of the business, the distinction between external and internal members of ones business network is disappearing. Hence, companies must look to maximize the value of the interactions throughout their entire networkviewing each interaction between, for example, supplier and vendor or marketing and customer as an opportunity to improve a process or relationship and capture greater value.

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Franchisee

Logistics

Retailers

Marketing

Vendors

Merchants

Consumers
Stores

Retailers

Stores

This shift in dynamic between the consumer and the provider means that retailers must enhance customer insight and segmentationto know, for example, that a particular customer enjoys preferred customer status, has been shopping for new cookware online and will want to take advantage of current price incentives and coupons, including a birthday discount. This kind of customer insight can be used to ensure a level of customer satisfaction that increases the likelihood the customer will recommend products and services, purchase more and remain loyal to the retailerin spite of the competition.

Suppliers

Prescribing a road map for scalable solutions to drive business agility

Figure 1: The expanding retail networka complex and dynamic web of relationships, interdependencies and transactions that increasingly drives the retail business model.

Adding a layer of additional complexity is the fact that todays consumers are more discerning, informed and demanding than ever before. In addition to the impact that technology has on their buying behaviors, consumers today are more strongly inuenced by the opinions of friends, family and product experts through new social media channels. They no longer rely almost entirely on trusted product experts, retailers and manufacturers that broadcast to the consuming public through the traditional channels of TV, radio and print advertising. These increasingly informed consumers are short on time and want to be served, not sold to. They want retailers to listen to them, know them and empower them to shop, browse and check out products when and where they want them.

In this paper we will discuss the issues retailers face in todays complex business environment, and we will prescribe a road map to success that, rst, prescribes retailers to optimize business processes and, second, guides retailers to tackle the way their organization enables business users to make decisions. Well also explore several customer examples of proven results achieved by retailers on the road to success with BPM and decision management. Many retail processes, such as the planning of a promotion, include a high degree of end-user involvement and frequent change. Many separate activities and events need to be orchestrated involving numerous people and information residing in disparate locations.

From touch points to turn rates

To succeed in this complex, dynamic business environment, retailers must move faster, become more exible and optimize costs while putting greater focus on the processes that drive business execution. Todays retailers demand fast and accurate business-level decision makingthe ability to capture and work with knowledge about customers needs, preferences, buying patterns and propensities, and the relationships and interdependencies within the business network, in real time, is crucial to becoming an agile organization. And, to adapt to the complexity and growing body of information encompassed in and owing through the ever-broadening network, retailers need exible solutions that can scale to meet those growing demands.

as promotion and loyalty campaigns. Business processes underpin most activities spanning a retailers business, so lets take a closer look at the value of process optimization.
Optimizing performance with process automation and strategic rules policies

Taking the rst step with business process optimization

IBMs Smarter Commerce approach recognizes that the sale is just one aspect of the experience. As with traditional commerce, the customer is at the center of all operations. Smarter commerce turns customer insight into action, enabling new business processes that help companies buy, market, sell and service their products and services. Indeed, processes are everywhere. There are people-centric processes required to reconcile a vendor trade fund agreement; back-end processes that drive integration of data and inventory among supply chain systems and customer-facing processes, such

The automation of manual steps involved in a process typically leads to increased productivity, reduction in errors, lower costs and less need for manual intervention for exception handling, content management and other common tasks. Many retail processes can benet from automationfrom simple workows, such as a vendor onboarding process, to complex multientity, multisystem processes, such as order fulllment. Process automation spans across any number of disjointed IT systems, information and human tasks, and orchestrates them into an optimized process ow. As retailers strive to build agile organizations, they are seeking ways to optimize the countless dynamic processes involved in running the business and delivering products to customers where and when they need them. A driving force behind an agile organization is often represented in the alignment of the business and IT teams. Retailers with exible IT infrastructures tightly aligned to the needs of the business are better equipped to address the changing needs of the market and the customer. Agile retailers are able to rene and continually improve processes over time, and to tap into the information needed to drive intelligent, effective decision making.

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To help us further explore how retailers can achieve success and growth in a dynamic business environment, lets look at the unique values that two technologies bring to enable agility specically, business process management (BPM) and business rules management systems (BRMS).
BPM and BRMSa two-pronged approach to process improvement

BPM can help retailers to orchestrate various tasks and services that comprise the end-to-end business of their organization. A business rules management system (BRMS) helps manage automated decisions at specic points in a business process. BPM and BRMS can be thought of as two prongs in a business-process improvement effort. In most cases, a BRMS is exposed to BPM through web services that are invoked by the business process to make a decision that directly inuences how the business operates. BRMS is a technology that enables retailers to dene, implement and manage simple routing rules inside a business process. It can also be used to automate complex, highly variable decisions that take place at different points in a process and in other systems that may not be involved in orchestrated processes. The IBM Business Process Manager solution provides a unied BPM environment for collaborative process improvement, designed to make it easy for process owners, business users and IT to collaborate and engage directly in improving the organizations business processes. With the single, comprehensive environment for process design, execution, monitoring and optimization that the IBM Business Process Manager solution provides, a retailer can gain signicant efficiencies, avoid costly errors and increase customer satisfaction.

For example, the documentation and automation of the process required for the planning of a promotion can provide the business user with an environment for improved collaboration and continuous change, where the user can monitor the various tasks in the workow through a user experience that helps them engage more fully in the steps of the process. Has the ad been sent to the printer? Has the price been approved by nancing? Are approved suppliers able to fulll inventory requirements on time? These and other questions are quickly answered through the end-to-end process visibility and improved collaboration that IBM Business Process Manager can provide. By adding a BRMS to the process with IBM WebSphere ILOG JRules, retailers can drive powerful rule-based applications that automate the ne-grained, variable decisions used in business processes. As a result, business users are equipped with streamlined processes that include the capability to drive powerful decision making, based on predened rules and business policies. To expand on the previous example, if the business user determines that the supplier is unable to deliver enough inventory to meet the needs of the promotion, the business user can draw on the predened rules to determine alternative vendors that are approved in good standing, have the required inventory and can deliver in the appropriate time frame. With this information in hand, a well-informed, effective decision can be made to improve the business outcome and ensure customer satisfaction. The value of rule-based decision making can be realized both during the execution of the business process and in subsequent processes as the business user is empowered to rene the rule sets based on the users learningsproviding future opportunities to achieve further optimized business outcomes and improved decision making.

From touch points to turn rates

The implementation of IBM Business Process Manager and WebSphere ILOG JRules together provides retailers with a scalable solution for more efficient, simpler, faster process improvement that can yield the organizational agility required to succeed and grow in the dynamic, complex business environment of today.

exible creation of solutions for process improvement. Thats step one of the road map to retail success. Now lets explore step two of the road maphow your organization can attain the next level of business agility with decision management technology. The value proposition of BPM for decision management goes beyond process automation, which helps to ensure process compliance and the integration of people, processes and information. By adding replicable best practices and the use of imbedded logic to optimized processes that span multiple roles and functions, retailers can drive business agility to another level. Over the past few years, a lot of attention has been given to optimizing the planning and management of merchandise promotions, from coordinating numerous people, tasks and related information to selecting the right offer to present to customers. Yet, it is common knowledge that nearly 50 percent of all promotions fail to reach their volume and prot targets, because some part of the promotion was not executed as planned. Implementing a successful and well planned promotion involves many people within and outside the retail organization that oversee the development and creation of the advertising message, the buying of media spots, the sourcing of inventory and the distribution and display of the promotion in stores and on the web. In addition, the promotion planning and implementation process may be started up to 26 weeks prior to circulation of the advertisements. Many details need to be tracked at the stock-keeping unit (SKU) and day level throughout multiple parts of the business to ensure a successful promotion, and numerous decisions need to be made along the way. Any variation and change of plan in this complex set of processes will likely have a negative impact on the promotion performance.

Figure 2: Driving better-informed decision making by delivering in-context

insight to business users.

Taking the next step with decision management

Weve talked about the problems that invariably arise when business processes are not optimized. In the previous section we outlined the value to retailers of bringing together process automation and rules management technologies to enable the

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Therein lies the value of combining BPM with decision management to ensure that all activities of the process are tracked in an efficient manner, along with the many decision points that intersect the process. As a result, when an issue arises it can be addressed in an effective and timely manner, based on contextspecic informationhelping to avoid problems later. When BPM is combined with decision management, the functionality available in business event processing, business rule management and process orchestration can be leveraged to streamline the process and embed decision logic. To address the increasingly complex demands of todays informed consumer, retailers need capabilities to allow them to design, implement and monitor business processes, manage business strategy and automate decisions. They need capabilities to enable them to deliver insights at the point of impact (or, touch point) to empower the employee with the tools and information to make the right decision within a given context. Lets revisit the promotions planning process referred to earlier. Once the process is automated and business events have been established to enable effective, more informed and timely decision making, imagine the value of being able to more effectively differentiate and personalize offers for customers, based on improved intelligence provided in context. By delivering insights to the right place at the right time, retailers can offer a consistent experience through all interactions with the customer, making pricing and promotions more responsive to competitors

and market conditions, and improve the ability to respond to unforeseen events in the supply chainbefore they impact the business. Decisions are required to be made throughout all layers of the organization, and retailers face innumerable opportunities to improve business agility and customer satisfaction through optimized decision-management capabilities. Typically, there are four key areas where retailers can drive business agility through optimized business processes and improved decision management: 1. Observe and detect. Retailers want to know what is happening through the tracking of all activities and data that comprise a process or event. 2. Investigate. Retailers require the ability to quickly investigate exceptions once detected, based on the rules dened in the event. 3. Analyze and decide. Retailers need to understand the meaning of what has been observed and make informed, timely decisions, based on the insight gained. 4. Act. Retailers succeed when they are equipped to execute on the appropriate decisions in accordance with dened next steps, while they continue to observe and detect and make further renements to the process and dened events, as required.

From touch points to turn rates

Key Components of Business Process Agility

Detect Investigate Analyze/ Decide Update

The business situation is dened as a single process event made of several activities All activities are tracked to DETECT any issues that my impact the process

If an exception is detected, it is quickly INVESTIGATED based on the business Rules dened around the event

The Process engine executes the Rules directing the ANALYSIS of the situation and the resulting DECISIONS are passed on to another process or to an individual for follow up

Based on the event outcome, Rules can be modied and UPDATED to improve on the tracking, analysis and decision path to drive improved outcomes in future

and information within their business processes through automation, and decision managementto efficiently and effectively manage the vast amounts of data owing in and out of the business. Add to this the number of decisions that must be made throughout all areas of the business and we see the need for retailers to be responsive to the increasingly complex and dynamic marketplace. Business process management combined with decision management can empower retailers to further increase their organizations agility in addressing three priority business objectives: 1. Improved business agility and responsiveness 2. Enhanced business alignment, compliance and transparency 3. Delivering a customer-centric approach

Decision Management leverages and aligns BPM components to maximize operating agility and efciency

Figure 3: Key areas where retailers can drive business process agility
observe and detect, investigate, analyze and decide, act.

Lets explore each of these in greater detail.

Objective 1: Improved business agility and responsiveness

By combining software capabilities and expertise to automate core business processes and improve operational decision making, retailers can achieve greater business agility and fully use organizational insight and know-how at the point of impact when and where it matters.

Taking it to the next leveldelivering insight when and where it matters

When it comes to delivering on the promise of improved business agility, we at IBM are certain of this: there are no shortcuts. Retailers must improve the efficiency and integration of people

Because customers are more informed and demanding, loyalty is a key challenge for retailers. As a result, retailers are seeking ways to improve business agility and responsiveness to customer and market demands. By providing their employees with clearly dened processes, rules and intelligence necessary to manage and improve decision making, retailers can shorten response times and bring the right product to the right customer at the right timewith speed and increased consistency.

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But many retailers are spinning their wheels and losing sales, merchandise and customers in the process. Fifty percent of retail promotions are not executed effectively, resulting in a huge loss in potential sales because the needed information could not get into the right hands at the right time. USD93 billion in sales are missed globally each year because retailers dont have the right products in stock to meet customer demand. USD1.2 trillion in excess merchandise is stockpiled in supply chains, resulting in long lead times at a great cost to retailers, because of information gaps or bottlenecks in the end-to-end business process. The impact to a retailers business of not pursuing improvements in business agility and responsiveness is very seriousand can be very costly. Empowering the front-line staff to deliver better service and improving the systems and technology with which customers interact enables retailers to create a highly productive customer experience at the touch points, where it makes the greatest difference. To make that happen, both systems and staff need to have the right information to make the right, informed decision at the right time, effectively answering questions such as: Is this one of our best customers? Should she receive a special rate or discountright now? What should I offer next? Where should I send her next? The application of business rules-based decision making provides the mechanism to help make informed decisions quickly about what to offer to whomwhile the customer is at a retail touch point. The right decision can be automated using business rules, helping enable front-line staff to make the right offer with

condence and providing a high level of service in a predictable fashion spanning all customer touch points. It is this improved ability to provide the most-relevant information about a product, service or customer to the right place at the right time in the right manner that can greatly boost a retailers agility and responsiveness. Customer spotlight 1: Major grocer builds agility and responsiveness with automated HR process A major grocer needed a better way of empowering local managers with the exibility to adapt their core business processes, while still adhering to corporate standards and policies. They turned to IBMs business process management offering to help them more efficiently manage human resource (HR) processes to keep pace with their rapidly increasing hiring needs. Through process optimization the grocer ensured consistent and timely response to employees and the business by delivering a guided self-service option to streamline HR requests and integrate data with existing HR management systems. The solution automated manual, error-prone processes, helping to reduce bottlenecks and enable the organization to leverage existing data and corporate policies. Results included signicant efficiency improvements, along with a 90 percent reduction in time spent managing the process and a 400 percent increase in their HR requests completion rate.

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Customer spotlight 2: Large specialty retailer empowers store owners with rules-driven merchandising assortment An award-winning specialty retailer needed to manage the assortment and display placement of thousands of units throughout thousands of stores. This IBM client required exible assortment-planning capabilities to meet the needs of the growing business and to guide space planning for store- and shelf-layout strategies, while empowering store owners to improve execution quality and efficiency. The retailer implemented a solution based on WebSphere ILOG JRules and took full advantage of business rules to redene assortment planning and help them identify strategies to increase sales, improve relationships and boost efficiencies. The specialty retailer now provides more exibility to store managers to change parameters and rules as applied to product mix and optimal placement, based on the specic needs of their location, customers, seasons and local buying factorswhile complying with corporate requirements. The resulting benets include more effective and efficient dispatching of personnel for the monitoring, restocking and arrangement of merchandise, along with the intelligence to drive mark-down optimization, production planning and scheduling. The retailer has realized improved revenues from optimal product placement and a reduction in time needed to determine product mix recommendations for all storesfrom 70 hours down to 70 minutes, once the process was optimized and the business rules were dened.

Objective 2: Enhanced business alignment, compliance and transparency

Retailers need to achieve alignment among people, information and processes throughout the organization. Many retailers are spending money and time on manual processesfor example, in the way they manage and reconcile the agreements with and allowances owed to them from vendors. The cost of handling exceptions, tracking and reprocessing denied claims and conducting post-audit services can cost a retailer 20 to 25 percent of the recovered dollars, in addition to the legal costs incurred for noncompliance. By optimizing the vendor trade fund management process, retailers can increase efficiencies and cash ow with timely receipt of hard cash from vendors that would otherwise be lost or delayed. Retailers need to automate processes to achieve high passthrough rates of information to help employees and users in their business network make informed, in-context decisions about resources, next steps and required actions to ensure customer satisfaction and drive business success. By following the prescribed road map, retailers can improve business alignment, compliance and transparency through optimized business processes and business rules management to externalize decisions and automate the more complex ones. By maximizing the effectiveness of their decisions, retailers can achieve optimum allocation of inventory and resources and reduce risk in many processes. The vendor trade fund management process is one example in which retailers can gain signicant benet when transparency and alignment of information is

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improved, because in many cases managing trade funds and administering allowances are still largely manual processes. Employees are required to locate information from disparate, nonintegrated sources and systems for manual entry into unwieldy spreadsheets. This process is not only time consuming and error prone, it can lead to unnecessary risks for the retailer, in the form of unused and unclaimed funds, unrecoverable invoice write-offs and limited tracking and trade fund reconciliation capabilities. Customer spotlight 3: Outdoor gear retailer improves revenues through automation of vendor trade fund process An outdoor gear retailer opted to automate the vendor trade fund management process from vendor contract management and in-season rebates to reconciliation and invoicing. The automated solution positively impacted many roles in multiple areas of the business, including the merchant/category manager, nancial analyst, nance director, CFO and legal contactand all needed to access key vendor contract information, maintained in spreadsheets, to perform their individual roles. The disparate processes and systems resulted in unused and unclaimed trade funds; the retailer was leaving cash on the table by missing rebates and paybacks it was owed from vendors. The organization knew it needed to integrate processes and improve documentation control in order to facilitate the recovery of dollars otherwise written off. In addition, the company needed improved visibility into usage and return on investment (ROI) of trade funds in order to effectively conduct annual cost negotiations with vendors. Moreover, the company knew its spotty tracking and lack of accountability impacted its ability to comply with government standards and regulations.

The retailer implemented a process automation solution that included business rules to ensure compliance of vendor policies, on-time collection of invoices, tracking and reconciliation of out-of-cycle negotiated rebates that would otherwise be lost, and timely generation of invoices, using accurate data from different sources throughout the enterprise. Anticipated results include improved cash ows resulting from increased data accuracy and visibility, lower staffing costs and increased compliance. These positive results will be compounded by future gains yielded from improvements based on better-informed future negotiations. Customer spotlight 4: Leading outdoor equipment and apparel company applies business rules to reduce fraud A leading US-based company selling apparel, outdoor equipment and advisory services faced several challenges. They were saddled with disparate information residing in silos throughout the organization and an obsolete front-end order-entry system with limited functionality that was built on home-grown technologies. This clients inability to efficiently make accurate decisions resulted in revenue losses and wasted time that heightened the business risk and impacted customer loyalty. In fact the inefficient order-entry system resulted in three of every 100 orders received proving fraudulent. The organization implemented a solution founded in IBM software, including WebSphere ILOG JRules, with support from IBM Global Business Services. The rules-based solution helped enable the retailer to transform operations and processes and ensure effective fraud detection and case management. IBMs exible, scalable solution helped business users access the information they needed to make informed decisions and take appropriate action when they

12 From touch points to turn rates

received alerts about an inappropriate transaction occurrence. Benets included signicant reduction in the amount of time spent on loss-prevention activities, including manual auditing of potentially bad transactions. Today, a potential invalid transaction is diagnosed and acted on within hours instead of weeks. As a result, customer service is improved, staff efficiencies are increased and prots are up, while risk to the supply chain is down.
Objective 3: Delivering a customer-centric retail experience

Lets look for a moment at another key part of the promotion areathe opportunity to cross-sell and up-sell a customer by delivering targeted offers to them based on their interests and buying habits. Consider what might happen if a retailer could take their customer segmentation to another level by injecting additional intelligence into empowering employees and users in the business network to uncover new correlations between buying patterns, customer proles and shopping history, thereby delivering on-the-spot tailored promotions to the customer. When retailers follow our prescribed road map, moving decision-making capabilities closer to the customer touch points and empowering business users with intelligence to effectively and efficiently deliver targeted promotions and offers, they are better able to meet the needs of the customer, increase satisfaction and boost sales. With a combination of process automation, business rules and in-context intelligence, retailers can deliver ner-grained promotions, pricing and strategic offers that increase the precision of operational decisions and improve the consistency of customer interactions to ensure a customercentric approach. Customer spotlight 5: Beauty retailer boosts customer loyalty with rules-based promotion process A French cosmetics and beauty company had in place a manual and highly inefficient process for its loyalty cards that slowed down employees and the organizations ability to respond to market needs. Cashiers and the promotions infrastructure could not keep up with the fast-changing, potentially conicting promotional offers that had to be tracked in real time. This IBM client implemented a solution based on WebSphere ILOG JRules to manage rules that dene marketing promotions and dependencies on the loyalty program.

In response to better-informed consumers with higher expectations, retailers need to put the customer rst throughout every area of the business. Customers have more choice and more knowledge than ever before, so customer service really is job-one today. Weve discussed the need for retailers to drive business agility as they also align information and processes throughout the business for compliance and transparency. Woven through all of this is the need for retailers to ensure a customer-centric approach in everything they do. The customer needs to have efficient, timely access to the products and services they need, when and where they need them. All this needs to be backed by knowledgeable staff who are informed and able to present a top-notch customer experience to shoppers. Earlier, we looked into the promotions planning process and explored the gains to be yielded by automating a once-manual process. We discussed the value that predened business rules can provide by enabling the business user to make informed decisions about next steps to take. This represented the rst step of the road map to retail success. Improved process models for managing promotional campaigns can help retailers reach more customers, give greater control and improve overall effectiveness by 20 to 25 percent.

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Now, the organization can turn customer loyalty cards into a powerful differentiator that takes into account point of sale transactions, in addition to customer prole and sales history. Shoppers now receive loyalty cards with embedded magnetic strips that track their personal information, spending habits and earned rewards. The solution automates points management and rewards, while offering the business real-time visibility into customer buying patterns. The new rules-based solution resulted in dramatically reduced time to market for hundreds of promotional offers every month, improving the personalization and accuracy of promotions to ve million customers through 45 million transactions annually. Customers realized increased savings and extended their loyalty; meanwhile, the organization is able, using highly accurate customer data, to quickly adapt to marketplace conditions. Customer spotlight 6: Large home improvement store improves efficiencies by automating supply chain A large home improvement store faced a prevalent retail issue: the need to ensure that the right product is on the right shelf at the right time to meet the customer needs. Reliance on error-prone manual processes conducted by entry-level workers put the organization at risk. More than 100,000 SKUs needed to be tracked manually in systems based on spreadsheets and manual counts, rendering the data unreliable and difficult to analyze. The organization sought to automate this mission-critical business process to ensure supply chain replenishment would happen in a timely, efficient manner.

This client implemented a solution based on IBMs business process management offering that enabled them to automate the once-manual process with an application that integrated smoothly and completely with several existing back-end systems to drive efficiencies and register exceptions. The solution helped enable the retailer to obtain clear views of their inventory so they could forecast seasonal and regional variants and replenish shelves with the right product at the right time. Staff efficiencies are improved, which in turn provides improved levels of customer service and, of top importance, customer satisfactionfrom having the right products available when and where needed.

Driving business agility to address core business pains

Weve outlined our prescription for success and how retailers following a roadmap based on process optimization and decision management can realize a wide range of benets throughout numerous areas of the organization. Weve shared real-world stories of retailers whove optimized their business processes to reduce bottlenecks, boost efficiencies and realize tangible benets. Weve observed their ability to make better, more effective and timely business decisions based on predened rules and intelligence that helps business users to make informed decisions that can be further rened in the future for continuous improvement. Weve also discussed how critical it is for retailers to increase their business agility in order to successfully address the key challenges they are facing today as they operate in dynamic business environments laden with increasing complexity, while striving to meet the needs of better-informed customers with

14 From touch points to turn rates

higher expectations than ever. Youll recall that USD1.2 trillion in excess merchandise is stockpiled in supply chains, instead of on store shelves where they can be seen and purchased. By following the road map outlined here for optimized business processes and rules-based decision making, retailers can improve business agility and solve key challenges in several core business processes that span their organization, including:

gained from customer and organizational data that will provide the competitive differentiation needed to achieve success and sustained growth. End-to-end process visibility and dynamic, real-time insight are needed to enable retailers to effectively respond to customer demand, and this need is evolving faster than retailers ability to meet those demands, hence the need to increase business agility with BPM and decision management and to get started as soon as possible. This is the evolution that many organizations are making todaymoving from inefficient access to information, lack of insight and an inability to predict customer wants or how to respond to them, to predictability and responsiveness based on informed decision making that leads to effective action. Retailers are realizing the value of automating the manual processes performed by back-office employees, while providing employees with in-depth, context-rich information about changing markets and customer habits. Those that deliver the information employees need to make the right decisions for the business position themselves for increased customer satisfaction and sustained business success. Looking ahead, information is only going to gain importance and power, and retailers who implement techniques for mining, analyzing and acting on statistics and historical data will be better positioned to predict and plan for future events, customer behaviors and buying patterns. To future-proof their organizations, retailers ought not only to be optimizing processes and identifying business rules to guide actions; they also must inject intelligence into the business processes to enable better, more timely decision making today, while considering historical information to help them plan and position for future success and growth. By embracing predictive analytics, retailers can detect

Promotions planning and management. Streamline coordination of tasks and information from disparate areas of the organization for potential boost of promotion success rates by 50 percent. Vendor trade fund management. Recoup potentially lost funds and improve future agreements and increase cash ows by a much as 20 to 25 percent. Pricing management. Simplify pricing of simple to complex products and bundles to ensure protability while enabling dynamic pricing to meet customer needs. Multichannel inventory location. Make available the right product when and where customers need it for potential revenue increases of up to 30 percent or more. Vendor onboarding. Get products to market quickly and boost time to value by up to 80 percent. Inventory replenishment. Ensure availability of the right products the customer needs and increase customer spend by up to 25 percent. Customer loyalty, cross-sell and up-sell. Provide targeted offers to enhance customer satisfaction and boost sales improving effectiveness of promotions by 25 percent.

Future-proong for success in a dynamic retail network

The complex, dynamic and broadly networked environment in which retailers are operating requires that they nd new opportunities to improve their business. Simple cost-cutting measures are no longer sufficient. Instead, retailers need to optimize business processes to gain efficiencies, while leveraging the insights

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Business Outcomes

useful patterns and discover new insights to help them make better decisions, deliver suggested next-best offers and empower their employees to provide an improved customer experience. Successful companies today are recognizing the increasing need for business agility, driven by process optimization and decision management. To help you take your efforts to the next level and keep up with the pace of change, weve dened a road map that takes retailers to two important stops on the road to business agility: business process automation and decision management. The question that remains is which stop does your organization need to make rst? Many organizations nd value in starting with process optimization before they determine the extent of decision management required. Some start with the decision points in their process and work from there to achieve agility. We want to hear your perspective on which stop youre making rst on your road map to business agility. Join us in conversation on Twitter: #bizagilitywe want to hear from you.

2 1
Assess Your Business Objectives Accelerate change Integrate with customers, suppliers and partners Control costs and add exibility

Complete an initial project in 90 days or less

Advance to Higher Value

Extend and enhance process improvements Dene and automate a business process Integrate a core system with a partner application Virtualize an application Deliver new services
Manage and scale workloads in the cloud

Project Scope

Figure 4: Three phases of building a road map to business agility.

Getting started on a sure path to business agility

Get your organization started now on the road to business agility. Depending on your needs, IBM can work with you to determine the most appropriate starting placewhether you are ready to start with a specic project, or are wanting to build your success out into a broader program or a complete organizational transformation to achieve higher value. To learn more about how your organization can take part in a complimentary IBM Process Improvement Discovery Workshop to help you estimate value and appropriate entry points recommended to get you started on your process automation and rules management efforts, visit the following website:
ibm.com/process-improvement-workshop

IBM is a business and technology leader offering hardware, software and services to help clients effectively integrate business strategy, business process management, service-oriented architecture (SOA) connectivity and integration and dynamic application infrastructureto drive greater agility and better business outcomes. IBM offers a variety of solutions that can be deployed individually or together. Those referenced in this paper include:

IBM Business Process Manager, a powerfully simple solution providing centralized visibility and control along with industrial-grade scalability IBM WebSphere ILOG JRules for the creation and deployment of powerful rule-based applications

Additional WebSphere offerings are also available, including software for SOA environments to enable dynamic, interconnected business processes and delivery of highly effective application infrastructures for all business situations. In addition, IBM offers the IBM Retail Industry Framework, which provides a software platform for deploying retail solutions in addition to specic IBM industry accelerators to speed implementation of BPM projects and realize ROI more quickly. IBM has the tools, knowledge and industry-specic experience to help you optimize your retail organization and drive business agility on the road to smarter commerce, including enhanced customer satisfaction and increased sales.

Copyright IBM Corporation 2011 IBM Corporation Route 100 Somers, NY 10589 U.S.A. Produced in the United States of America May 2011 All Rights Reserved IBM, the IBM logo, ibm.com, Global Business Services, ILOG, and WebSphere are trademarks of International Business Machines Corporation in the United States, other countries or both. If these and other IBM trademarked terms are marked on their rst occurrence in this information with a trademark symbol ( or ), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the web at Copyright and trademark information at
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For more information

To learn more about BPM solutions from IBM that can drive business agility in retail and join in the conversation on how IBM can help you shape your road map to business agility, please contact your IBM marketing representative or IBM Business Partner, or visit the following website:
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Additionally, nancing solutions from IBM Global Financing can enable effective cash management, protection from technology obsolescence, improved total cost of ownership and return on investment. Also, our Global Asset Recovery Services help address environmental concerns with new, more energy-efficient solutions. For more information on IBM Global Financing, visit:
ibm.com/nancing

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