Significance of SAP HANA for Retailers
Given the significant business impact it provides, SAP HANA is being looked upon by increasing number of enterprises. Given the nature of retail industry, the volume of data as compared to other verticals are manifold. Hence it would not be incorrect to say that HANA is finding a sweet spot amongst leading retail players. This article demystifies the concept as a whole, looks at possible business impact across segments and then looks at the relevance of the technology from perspective of a retailer.
In traditional systems there was a distinction between OLTP and OLAP layers. Former was meant to do the real time data processing and later did the analysis out of it. It is obvious that you would need your OLTP systems (like SAP ECC) to accumulate data, have an ETL process designed to extract data and pass it on to OLAP (like SAP BW). The fallback of this sequential approach is that business decisions are slow and corrective actions take time. To be direct and honest, business decisions being taken today (in many cases) are not data driven.
SAP HANA combines OLTP and OLAP layers into a single system. This has been made possible because of significant advancement in underlying technology. Due to this tremendous amount of data (say in Terabytes) can be stored in cache. This reduces the processing time as this approach ensures that you don’t need to hit the database layer time and again.
HANA has far reaching consequences. It accelerates the advantages of what a typical ERP application was originally meant to do – make enterprises nimble and efficient. Due to its processing power, it makes things which were difficult to imagine earlier, easy and intuitive.
Consider a company which wants to increase the price of its product and it want to see a real time simulation of how the markets would behave. Another example, a company looking at streamlining their logistics cost by choosing amongst the alternatives available can use deploy HANA for this purpose.
The above real time simulation results can bring a lot of focus back on having a data driven approach to run business.
What is in there for a Retailer
There are thousands of transactions happening every moment for a Retailer. Even now in many cases, the POS transactions generated in a day is being consolidated product-wise before feeding into SAP IS- Retail system due to sheer volumes.
Mentioned below are some business cases why this technology makes so much sense in the above context. Though there are many aspects, the most significant ones are mentioned below.
- 1. Store Layout Optimization:
There are thousands of customers visiting your store every day. If the retailer has an online presence as well, these numbers just balloon out of proportion. Using simple technologies it is possible to accrue the movement of customers (both in physical as well as online stores). Using SAP HANA to analyze this can help optimize store layout and increase you top and bottom lines.
- 2. Inventory Levels – Real Time:
Usually inventory levels are tracked at the end of a period. HANA can help track real time inventory across hundreds of stores and millions of SKU on a real time basis. This can make stock-outs a thing of past.
- 3. End Buyer Personalization:
CRM can now take a totally new dimension. It is possible to identify every customer with his name and understand his buying pattern in much more detail. This makes up-sell and cross-sell much easier and efficient than in the past by a targeted campaign.
- 4. What-if simulation for Promotion:
With the power of HANA it is possible to carry out simulation and decide amongst various promotions schemes that a retailer may want to offer to their customers. The application can give quick results on the impacts on various KPIs. This can help shorten the decision making time.
In summary, retail industry has two primary challenges – enormous data and short response time. Given the dynamics of this vertical, the decision makers need their applications to quickly assimilate the data points and give them an edge over their competitors. This is exactly what SAP HANA can do for them.