Building AdoptionBy Brian P. Watson | Posted 2007-05-14 Email Print
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Expanding its product lines helped Dick's Sporting Goods grow from a mid-market player to one of the country's premier athletic retailers. But first it had to become more nimble in the ways it managed and tracked its offerings.BUILDING ADOPTION
Then Dick's set up a bake-off between business intelligence vendors. "We said, 'Let's involve business users and do the whole selection process the way it should have been done all along,'" Schroer says.
Mewherter and Schroer agreed that MicroStrategy's flexibility along with its experience with retailers put the software over the top of other big-name competitors, like Cognos, Brio and Business Objects, who were also brought in for testing.
The vendor's technology, in fact, does set it apart from the competition. MicroStrategy uses relational online analytical processing, or ROLAP, which works directly with a relational database. The MicroStrategy server sits between the user and the relational database that powers the data warehouse and calculates data based on the dimensions the employee prescribes; it thus changes the relational data into multidimensional data, or data combined from various sources, according to Boris Evelson, principal analyst for business intelligence with Forrester Research. MicroStrategy is the only large ROLAP vendor today, Evelson says, though Business Objects and Microsoft have experimented with the technology.
Right out of the box, Schroer saw improvements in how users created reports. Since MicroStrategy interfaces directly with the data warehouse, employees no longer had to download figures or statistics to their computers, as they did with the STS system.
MicroStrategy allows Dick's to create two types of reports: "canned" and "self-service." For "canned" reports, the team analyzed thousands of reports created via the STS system taking into account the specific needs of each business unit, based on their past reporting experience and winnowed them down to templates. Those templates were organized around business functions like ordering and receiving or sales and margin analysis. Users could then narrow the focus by region, department or product, Mewherter says. Dick's went from more than 2,000 reports derived from STS to about 200 on MicroStrategy. The chain has since cut that to 50 since upgrading to the latest version, MicroStrategy 8, Schroer says.
Customization became a big plus for users, he points out. Instead of going back into the system to add levels of granularity, the MicroStrategy tool lets users expand their options. For instance, if an analyst wants to examine how one store's sales stacked up against others in the district, or how that district compared with the entire chain, he can add those fields right into the report. Before, he had to locate reports, plug in the data and then re-run the report. That was one of the scenarios Schroer says took hours. With MicroStrategy, in most cases, the same task takes less than five minutes, because the figures and statistics all come from the data warehouse instead of being scattered in different databases.
The vendor also offers a "self-service" report tool that walks users through a series of prompts, asking them which elements they'd like to include. For example, the tool might ask the employee if he wants to track sales of a specific item, by its style or color, at a range of stores. "It's really looking at the elements available and seeing if that's what you want," Schroer says.
Still, even after all that effort, the team watched as users retreated to STS, for no other reason than a high comfort level with the system's tools, despite requiring more steps and time. "The difficulty we had was that it was too easy for them to go back to the old way of doing things," he explains.
Initially, the team tried to find managers with influence in departments like allocation, planning, procurement, replenishment and store operations to use and promote the software to their teams. "You can't involve everyone," Schroer says. "But you have that person help in the design, and they can go back to their area and say, 'Look at all the things this can do.'"
Still, the plan had only marginal success, he says: Only about 25 employees became users. But the team at Dick's anticipated a bit of an uphill battle, since they had both systems implemented at once. So, right as they finished deploying the software, Mewherter, Schroer and company launched a computer-based training program for the MicroStrategy software. Employees got at least three hours of instruction on how to create, customize and run reports, Schroer says.
As they learned the new system, Dick's, as planned, began phasing out the STS system and implementing new JDA merchandise management software. "That forced adoption," Schroer says, noting that the number of users on the MicroStrategy system jumped tenfold, from about 25 to 250, in less than a year. They've since added at least 50 more users, he says.
Dick's would not reveal how much it paid for MicroStrategy's suite or any estimated return on investment. (Both Mewherter and Schroer say that management has never requested one.) But recent financial results show that Dick's has improved its operations while boosting revenue.
Earnings have more than doubled since the business intelligence initiative began, according to regulatory filings. In the fiscal year ended Jan. 31, 2004, Dick's pulled in $1.47 billion in net sales. In the most recent annual filing, for the year ended Feb. 3, 2007, the company reported $3.11 billion in revenue.
And Dick's operating income has grown year over year by at least 20% since going with MicroStrategy. In the 2005 fiscal year the first full year since the deployment operating income rose 28%, to $110.87 million, from $86.33 million the previous year. In its most recent filing, Dick's reported a whopping 49% jump, approaching $200 million in the 2006 fiscal year.
Instead of drawing a direct line between the business intelligence project and the company's operational improvements, Mewherter calls the initiative an "enabler" a system that helps users fine-tune their reports. "Rather than saying here's Mike's purchase order reports and Betsy's purchase order reports, now we have one report that users can customize and make their own," Mewherter says. "That's business intelligence."