ERPs and Predictive Analytics
What’s the best way to make accurate decisions about the direction of your retail business? By having a strong understanding of the past and how it relates to the future, oftentimes via something known as ‘predictive analytics’. It is essentially the culmination of many different techniques including data mining, statistics, modelling, machine learning and artificial intelligence being used together to make predictions about what is to come in the future based on the patterns that it has learned from events in the past. It includes data from as many different places as possible in order to find patterns in historical and transactional data in order to make better decisions for daily operations and long-term planning. However, this is only one side of the equation. In order to have effective analytics, you must first have accurate and recent data – seamlessly collected and organized by your cloud-based ERP. (source: https://www.predictiveanalyticstoday.com/what-is-predictive-analytics/)
In this post we’re exploring the relationship between ERPs and predictive analytics and how together they can help your retail business to grow.
Predictive Analytics & Retailers
Given the growing number of moving parts that retailers must keep in mind at every stage of the game, it’s no surprise that the insight gained from predictive analytics and your ERP can be hugely helpful in this industry. Some of these major ways include:
- Big data and its usability. The almost never-ending wealth of customer data is only truly useful if it can be made into something that can be understood.
- Customer service. The more you know about your customer, the more you can do to make their buying experience with your brand more pleasant and tuned in to their needs.
- Loyalty. If you implement a predictive model, you can get a better idea of which customers are staying and leaving - and apply the right technique to keep those who are starting to stray.
- Price setting. All of this data that you’ve collected and organized will be able to better tell you how you should price your item based on inventory, history, and demand. It also gives you the agility to respond when the market changes.
- Promotion planning. Knowing your customer, your product, and the overall trends in your retail business can help you to plan the best sales and promotions at the right times.
And the best part of this is that once you’ve established many of these things, your ERP can help to automate and carry out a number of the tasks and processes that you’ve decided to implement. Because really, what good is data and decision making if it doesn’t make your daily life run a little more smoothly? Over time, as these processes become more streamlined, they will also only serve to help each other, creating a positive feedback loop that only stands to improve with time and information.
Supporting Predictive Analytics with an ERP
As mentioned, vast chunks of data are required for predictive analytics to be effective and to support key retail operations. An optimal way to get all of this data is by implementing an ERP solution on the cloud. Such an arrangement can help you bring your operations together and to streamline information and data to help you get the most out of it. Moving ahead, you have an opportunity to build machine learning initiatives, leading to elevated customer experience and superior operations along with enabling insights for effective decision making.
Some examples of questions that an ERP together with predictive analytics can answer include:
- What is the best price for my products when considering both customer and channel?
- What is the most efficient way to manage and distribute products from customer orders online and in-store?
- Who are our most valuable customers?
Having such information will cause a ripple effect across your business, leading to more productive employees and a better overall customer experience. For businesses that are considering making the change to an ERP, the ability to practice predictive analytics will help to increase the ROI on such an expense - especially given the multitude of other features that an ERP provides.
Predictive analytics may sound intimidating, but ultimately it is just another tool in your arsenal for creating the best retail business possible. However, you must be sure to collect data that is recent and true - which is a process that is best left to an ERP in the cloud. By utilizing information you gain via predictive analytics, you enable key parts of your business to function more efficiently and effectively, ultimately leading to improvements in your daily processes and long-term planning that can have major impacts on your bottom line.
If you think that better retail analytics start with better data collection or you’re intrigued by predictive analytics, but aren’t really sure how to bring it together with your retail business if it’s necessary for you, make sure to write to us at firstname.lastname@example.org for your complimentary consultation.
Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of Systems Limited, or any other entity related to Systems Limited.