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Elie Tahari uses BI tools to grow without adding overhead

Elie Tahari Ltd., one of three Gartner BI Excellence Awards finalists, implemented business intelligence tools that helped the fashion retailer grow without adding overhead.

Elie Tahari may not be a household name, but his work is certainly recognizable. The fashion designer, who came to the United States in the 1970s with no place to live and little money, made his big debut with the tube top, and, yes, that factoid received a round of applause at the Gartner Business Intelligence Summit 2011, held in Los Angeles earlier this month.

Whereas the other two presentations for the Gartner BI Excellence Awards came from big corporations, Elie Tahari’s exhibition, given by Director of Business Applications Nihad Aytaman, focused on a midsize business installing what turned into a mature BI project.

Elie Tahari Ltd., a privately held clothing retailer, has just more than 800 employees with 22 retail locations, clothing in 600 free-standing boutiques and all high-end department stores. The retailer’s merchandise is also available in 40 countries around the world.

The problem: The Elie Tahari story is not unlike that of many businesses interested in deploying a more sophisticated BI system. Information stored by the fashion retailer was placed into disparate systems. Although all systems were integrated, each had its own set of standards, reporting tools and user interfaces, creating silos. Beyond that, some data was compiled manually, and the process could take days, causing the sales staff, for example, to respond to trends slowly. Existing systems were clunky in reporting the availability of products at specific locations, and communication with the supply chain lagged.

The implementation:  In 2005, the organization decided to implement a data warehouse to eliminate the silos and manual processing to create a standardized reporting system. That project included an operational data store (ODS), which acts as a conduit between all reporting systems and the dimensional data warehouse. By implementing both the ODS and data warehouse, all data was collected and stored in the same place, enabling the fashion retailer to have more up-to-date communication with its supply chain. The system removed the need for manual processing, so that the sales staff, for example, could access data quickly and respond to trends faster. The organization also ensured that almost all transactional data flowed into the data warehouse within minutes, a system they refer to as near real time. This, according to Aytaman, allowed store managers to make insightful decisions such as altering buying patterns based on sales data.

After that successful implementation, the clothing retailer looked for other ways its BI tools could help cut down on inefficiencies. That led to a renewed focus on metrics in 2007, enabling the company to set targets and identify variances showing trends and health in specific areas or departments.

In 2008, noticing retail controllers were struggling with monthly budget reports because the 22 locations submitted Excel spreadsheets separately, Elie Tahari decided to streamline the process by creating an online portal specifically for that purpose.

In 2010, a major department store customer complained that the retailer wasn’t providing details about sizes ordered. Elie Tahari responded by implementing an SPSS statistical modeler to perform predictive analytics. That data is then fed into a multidimensional planning engine, which includes data on current inventory, production already under way or orders in the system. This system helped to meet customer demand and control production.

The outcome: Elie Tahari’s implementation of a BI system led to growth and more efficiency without adding overhead. The clothing retailer spent a total of $560,000 for its software and BI tools and spends about $50,000 per year in support. It now has 151 BI users within the company who request around 26,000 reports per month. Those reports come in different shapes and sizes from line lists to heat charts to linked reports, which can illustrate six separate reports on a single screen. In one example, a map of the continental United States highlights the state where a specific store is located and tracks where customers who purchase clothing from that location live. Aytaman said this kind of information could inform where another Elie Tahari location would be successful.

But the most surprising statistic came at the end of the presentation.

“I’d like to leave you with one last number, and that number is the number one,” Aytaman said. “It is the total number of my IT staff supporting BI.”

He added that “super users” trained for each department do simple ad hoc query reports. IT maintains the infrastructure, builds the complex reporting tools and implements new modules over the years.

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