Our customer is a retail giant, one of the largest in the UK, operating more than 94 million square feet of retail space and employing nearly half a million people. Since 2006, they have also operated a multi-channel online business, offering customers the option of ordering goods for collection in store or delivery to their homes.
Our Understanding
The retail giant was only too aware that the profitability of every order depends significantly upon the ordering and delivery option chosen by each customer through its multi- channel ordering capability. With this in mind, we immediately understood that Delivered Margin was a key metric affecting both profitability and business decision-making.
Our Approach
Our scoping workshops revealed that the company had already developed a Microsoft Access model in-house. While this was adequate for providing directional insight, it was too slow, unreliable, inflexible and inaccurate to enable measuring of robust KPIs. Worse, it took three weeks to process monthly data, when there was a clear business need for reports to be delivered on a weekly basis.
CadDo was engaged to implement a reporting model using a cost management solution providing the pace and agility required to support a high transaction environment. To keep implementation cost to a minimum, the model was migrated by CadDo ‘as-is’, minimising the need to build a model from scratch.
Measures of Success
The model went live, with the immediate benefit that reports were delivered on a weekly basis, which was made possible by the elapsed cycle time being reduced from three weeks to just four hours.
This renewed focus on Delivered Margin helped to drive a behavioural change for the Commercial teams, encouraging them to understand and focus on the true profitability of all their products. The notable insights provided resulted in a significant multiple ROI on the initial investment, initially estimated at £2m per annum. In fact, the project has been deemed so successful that a further infrastructure upgrade was signed off, increasing the user base from 40 to 150.
