Winning the Game with Predictive Analytics

At the end of 2009, global retail sales stood at a whopping 13,900 billions of dollars according to EIU. But did you know that retailers have also incurred millions of dollars in losses every year due to the lack of foresight and poor business strategies thus adversely impacting their sales margins? Could this have been avoided with better forecasting and intelligent analytics tools?

In today’s hyper-competitive retail industry, there is no scope for mistakes of this proportion. The answer now lies in intuitive insights that go far beyond mere reporting on existing consumer behaviors and trends to proactively identifying opportunities, anticipating potential problems and predicting future scenarios. Predictive analytics does just that - instead of a post-mortem approach, it helps retailers answer questions like “what’s next?” and “what is the best course of action?” Armed with these valuable insights, retailers can plan ahead for significant capital expenditure and develop optimal long-term business strategies with a clear goal in mind.

No doubt you would have thought retailers would jump at this opportunity and adopt such solutions by large. Far from reality! A recent study conducted by Wipro with RIS News substantiates this fact and even shows that while most retailers are already using traditional analytics tools, it is a shocking few (just around one fourth) that actually have up-to-date predictive analytics solutions in place. Why is that retailers are so reluctant to adopt new technologies like predictive analytics that have the potential to transform their businesses?

Predictably, the first thing that comes to mind is the usual suspect – costs! The costs involved in training employees in predictive analytics skills and integrating an entirely new approach to analytics in everyday work can be significant and may be a key factor in deterring retailers from making this shift. Other challenges include guaranteeing ROI, changing the overall corporate mindset and the need for clear roadmap to deployment of such a solution. What is heartening though is,as the Wipro-RIS study points out, that despite the slow adoption rate there is a growing awareness of such a solution for improving forecasting and planning accuracy. Notwithstanding the challenges involved, there is an expectation of an upward trend in the coming years.

Going ahead, the retail industry has to actively foster a culture that understands and promotes the capabilities of predictive analytics. It involves deep-rooted changes that herald organizational transformation right from getting top-level leaderships involved to breaking down silos that inhibit multi-department collaboration and facilitating a shift to a fact-based culture. It’s definitely not something that can be done overnight, but the benefits of having an inherent and powerful analytic capabilities will ultimately be the decisive factor in achieving revenue growth, innovation, customer loyalty and above all, to stand apart from its competitors in the coming years. That being said, the question now is – are retailers ready for such a revolutionary transformation? What do you think

About the Author

Bhanumurthy BM (Bhanu) is the Chief Executive of Application Services & Strategic Alliances. He carries P&L responsibility, strategy and operations of this unit globally reporting to CEO. With over 20 years of global diversified experience, he has been instrumental in building and scaling many of Wipro's businesses successfully.

Business Application Services is by far the largest service line for Wipro, by revenues. It offers integrated business solutions that span the application and technology landscape, from enterprise applications, digital transformation services to security solutions, enterprise business integration and testing. Under Bhanu's leadership, the services and solutions offered by Wipro's Application Services Practices have been creating the edge that organizations must have to assert their competitiveness in their markets ? a combination of global, forward-thinking strategies and high-impact technology solutions to support them.

Prior to this, Bhanu was Chief Business Operations Officer of Wipro's IT Business and Sr. Vice President, Application Services. He was instrumental in setting up far reaching processes to aligning the delivery structure.

Earlier, Bhanu was head of Retail, Consumer Goods, Transportation & Government (RCTG) businesses, which he built and nurtured for over a decade. He is a strategic thinker and leader with deep understanding of the market and the customer's business, technology, processes and systems.

Bhanu is reputed for his strong work ethic. He is result-oriented, adaptive and has a positive attitude to change. He is known for his exceptional ability to forge and maintain major client relationships. He represents Wipro in several external business forums and is a frequent speaker at leading business, technology and academic forums around the world.

Bhanu holds an MBA from Indian Institute of Management (IIM), Ahmedabad and a degree in Engineering from National Institute of Technology (NIT), Warangal.

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