CATEGORY: CRM Analytics
REVIEWER: Mark Cothron, data warehouse architect for Ace Hardware.
BACKGROUND: Ace Hardware serves more than 5,400 independent and company-owned hardware retailers in all 50 states and more than 70 countries. The $13 billion cooperative competes against other independent hardware retailers and hardware behemoths, Home Depot and Lowes.
PLATFORMS: Informatica PowerCenter and Informatica PowerConnect for IBM MQ Series run on Windows NT and source data from JD Edwards, DB2, SQL Server, point-of-sale (POS) data and flat files.
PROBLEM SOLVED: Two years ago, Ace moved to strengthen its position in retail home improvement. A critical element of this strategy was integrating and analyzing wholesale, inventory and POS data to drive business decisions, improve category management, lower inventory costs and optimize pricing. Prior to the Informatica solution, POS data and wholesale sales information were tracked through separate systems, making it nearly impossible to quickly and accurately react to customer buying trends. Ace is creating an organization-wide IT system named Eagle Vision that will use POS information from stores to update inventory information and make that information available for analysis in real time. Based on Informatica technology, Eagle Vision is being tested at select Ace Hardware stores and could be rolled out to as many as 3,000 stores within four years.
PRODUCT FUNCTIONALITY: Informatica's software is the backbone of the system that helps Ace track retail sales data in real time, resulting in a chain-wide view of inventory and the ability to monitor advertising programs and immediately determine effectiveness. The new system helps stores boost margins and present a consistent pricing image to consumers by giving pricing managers a holistic view of customer shopping patterns across different states, cities and stores. Ace can now identify individual items its stores purchase from other vendors. Its retailers are not required to buy all their merchandise from Ace, and the co-op uses this insight to negotiate better deals for its retailers through aggregate purchasing. By ensuring that customer profiles are updated and loyalty points are awarded after a purchase occurs, Informatica is a driving force behind the success of Ace's renowned loyalty program, the Helpful Hardware Club.
STRENGTHS: A strength of the Informatica product is its real-time data integration capability especially critical as Ace approaches real-time analysis of its POS data. Ace's strategy is that its software choices should represent a long-term view on IT investment. Informatica's industry-leading performance, combined with its strong Teradata data warehouse integration and real-time capabilities, made it the best choice for Ace's growing integration and analytic needs.
WEAKNESSES: One weakness is that Informatica does not allow for easy version control in the product. Because it is so easy to make changes to processes in the tool, a version control mechanism should be provided.
SELECTION CRITERIA: The Ace development team looked at several products and selected Informatica PowerCenter and Informatica PowerConnect for IBM MQ Series after extensive testing and benchmarking. Informatica enabled Ace to leverage its existing IT infrastructure with minimal additional investment, which was critical to selection. Informatica's performance, extensibility and the speed and ease of implementation at the corporate level and at the incremental store level provide a strong foundation for Ace's future growth.
DELIVERABLES: Sales, marketing and pricing managers now have access to sales information by product, location, product category, promotional code and SKU. Within the next two years, Ace aims to integrate more of its stores' POS data into the data warehouse to better improve their loyalty program and optimize costs.
VENDOR SUPPORT: The Informatica sales and consulting team worked closely with Ace to invest in customizing the integration to meet specific Ace needs. The Informatica product development team was able to make changes and improvements based on the expanding needs of the project. Ace is pleased with Informatica's commitment to meet its needs through continued product upgrades. In fact, Ace plays an integral role in the regional user groups that focus on consolidating product and service feedback and sharing Informatica expertise.
DOCUMENTATION: Informatica's documentation was more complete and easier to understand than most. From a technical perspective, PowerCenter is self-documenting. Therefore, within the build process, Ace was able to document business rules within the Informatica implementation for re-use throughout the organization.
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