Using information to navigate uncertain times – a case study

One of the most valuable uses of good business information is to help navigate a business in times of uncertainty and change. Many of our clients are doing exactly that and seeing huge benefits from having a data mart of solid, reliable and up to date information about their business performance.

A little while ago I had lunch with one of our Retail clients and they provided a great example. Their bank had been hit hard by the financial services crash and decided that over a period of months they would scale back our client’s line of credit for working capital. Rather than panicking our client went back to a new multi-dimensional analysis that they’d been using to analyze their inventory levels. They realized they could more closely manage inventory now that they had more accurate and timely seasonal sales information. Over a period of about nine months they reduced their inventory levels and working capital by almost 50% and were able to easily accommodate a smaller line of credit. In fact, they are seeing other operational benefits from not storing and managing so much inventory. Since their customer’s economic situation has also been dramatically changed they are buying different products. Having less on-hand inventory has kept our client better positioned to respond to these product buying shifts and able to move quickly into new higher-margin products rather than having to heavily discount large inventories of older products.

Having good business information delivered in a means that facilitates analysis allows our clients to see leading indicators of change well in advance. It also allows them to explore multiple possible solutions and anticipate how these solutions will impact their business. These are essential capabilities in these times of economic change!