Today, businesses collect and analyze huge amounts of data
Today, businesses collect and analyze huge amounts of data about customers, employees, suppliers, transaction, and much more (Nielsen 2014, p.2). Business analytics use the data to help the organization make better decisions and forecast future trends. Lim, Chen, and Chen (2013, p.1) define business analytics as the use of data to develop evidence-based business decisions. Analytics play a huge part in influencing the performance of an enterprise and contribute to business value in a number of ways. Akter et al. (2016, p.114) explain that analysts help transform data into information that aids the organization to create a competitive advantage, delivers a tactical value, and provides support for strategic planning. The organization is operating as a cloth fashion outlet and using business analytics helps analyze important market trends, identify appropriate advertising techniques that appeal to the consumers, identify the target audience, and study the buying patterns among the consumers.
Customers
Customers
Business analytics helps an organization analyze crucial customer data such as what types of clothes they wear during a certain period to help make decisions. Customer data helps identify high-value customers, understand how to acquire and retain customers, and approaches to use to interact with them. The organization will be able to acquire a better understanding of the lifestyle preferences among the customers and their buying habits which are important within the clothing fashion industry. This data ensures that the business makes accurate predictions on the behaviours of the target market and improves the experience of the customers. According to Chen and Storey (2012, p.1167), operating without large amounts of accurate data is a risk to a business as the analysis could present inaccurate information. Collecting and analyzing the right customer data will help the organization to target customers in the right market and understand how the product can be distributed, understand whether the customers are satisfied with the brand, engage with them at the right time and through the appropriate channel, spot new trends that arise particularly within the online community and satisfy their needs.
Suppliers
Suppliers
The procurement department within the organization requires having the right information on how much they spend, on which product, and with which suppliers. Evans and Lindner (2012, p.4) assert that the lack of accurate data makes the identification of hidden cost opportunities a virtual impossibility. Companies that have inadequate or incorrect spending analysis miss a huge fraction of their savings. Therefore, measuring and analyzing supplier performance through business analytics is a crucial organizational process that guarantees business success. Determining whether to retain the current suppliers or to select new ones is a challenging process that businesses have to make from time to time. However, business analytics helps streamline the decision making processes within the clothing fashion business by collecting and examining data on which suppliers are strategic and cost-effective. The business gathers important information such as who are the top suppliers or identify those who deliver on time, late, or early.
Forecasting
Forecasting
The clothing fashion business operates in a multifaceted environment where forecasting the demands of the customers is a complex process. In the present digital world, clients have access to important information anytime, anywhere such as what to buy, where to shop, and how much to pay amongst other crucial business information. Therefore, the cloth fashion outlet has to utilize business analytics to forecast how its customers will respond to new cloth lines that are introduced into the market each time.
2. The Appropriate Types Of Data And Charts Needed By Management To Assess The Performance Of The Sales Department In the Business
Performing an assessment of the sales trend within a business is an invaluable process that provides insights into the operations of the enterprise (Wang et al. 2016, p.98). The data obtained is analyzed and used to make informed decisions such as when to lower or raise the prices of products. A huge fraction of executives uses their monthly and yearly financial statements to assess the performance of their sales department and gauge the progress of the company. However, relying on financial statements to measure sales the management may not be able to identify other important trends. They should introduce other measures such as a sales analysis report that highlights new growth opportunities for the business.
Chen, Peng and Hung (2015, p.149) argue that a sales analysis report offers a chance to assess the performance of certain products in the market and various departments within the organization. The appropriate types of data to be used by the management to assess the performance of the sales department include;
ü Customer data including name, email address, and phone number.
ü The most frequently purchased product
ü The number of new customers acquired over a specified period
ü The frequency of repeat customers
In gathering the information on the trends and patterns in the sales of cloths within the organization, one can use tables to record the numbers, figures, and percentages. Once the data has been collected, it is converted to an easy and quick to understand format. The analysts may present the information in charts or graphs to make the information easily understandable. Viau and McGuffin (2012, p.1289) state that graphs and charts help make a comparison, show a relationship or highlight a trend that exists between variables such as sales performance for a business. There exist different types of charts and graphs and the management of the cloth fashion business must make the correct choice to assess the performance of the sales department. One of the most commonly used graphs is the line graphs that show trends and identifies the correlation that exists between two variables. The management can utilize a line graph to understand how sales of clothes vary from month to month. They will be able to see the main fluctuations in sales during the course of a year. A pie chart can also be used to compare two or more parts to a whole. Ervin (2011, p.205) explains that to represent information on a pie chart, one must always use the same unit of measure such as percentage distribution. However, using a pie chart requires that the data types to be used in assessing the performance of the sales department be presented in a ratio or percentage relationship.
The graphs and charts help visualize the data and can be used to show which sales variables areas are decreasing, maintaining a constant figure, or growing. Furthermore, the visualized data can be analyzed in different time phases such as monthly, quarterly, or annually to help compare the performance of the sales department during different seasons. Assessment of the department can also be done through tracking variables in the growth of the organization.
Data in graphs and charts can be used by the management to understand trends in the sale of clothes such as how frequent the repeat customers buy from the organization, determine whether there are seasonal trends for making purchases among the buyers, identify periods when certain types of clothes sell more, and what types of wares the customers buy together.
3. A Management Dashboard Appropriate For the Clothing Fashion Outlet
Eckerson (2012, p.1) defines a management dashboard as an information controlling tool that displays, tracks, and analyzes important data points and key performance indicators (KPIs) to assess the performance of a business, department, or certain processes. Krush et al. (2013, p.825) add that the dashboard can be tailored to meet the specific needs of a company or department where it provides real-time monitoring of data by assessing files and attachments in the background then displays the information in the form of bar charts, line charts, and tables. Therefore, it aids in reducing the number of hours that are required to analyze data within the organization. The cloth fashion outlet will be able to track customers and sales through a well-designed sales management dashboard. Bremser and Wagner (2013, p.62) assert that a well-designed dashboard with the right elements ensures that the right performance results are captured and delivered to the appropriate hands.
Allio (2012, p.25) states that building a sales dashboard guarantees an easy and quick way to visualize data, in the form of figures and numbers, and information to help a business identify more growth opportunities. An operational dashboard creates real-time daily reports that are constantly updating to reflect new sales that have been made by the sales department. The usefulness of a sales dashboard lies on the key performance indicators that have been included. A customized sales dashboard for the cloth fashion outlet would include a simple clock that will help draw people to view other numbers that are contained in the system. There is a number widget that displays the number of leads that are being worked on by the cloth fashion outlet sales department. The number of leads is placed against the target number and once the team achieves the goals the progress meter on the widget turns green.
The dashboard also displays individual progress for the sales representatives working for the organization. The individual performance will be placed against those of other personnel and focuses on the sales revenue that the staffs have brought in over a specified period. Allio (2012, p.27) states that individual performance is an important feature in the sales dashboard as a number of people will be interested in checking their progress every morning. Therefore, it promotes a healthy competition within the sales department which is important for the sales department. The revenue for the organization is displayed. The figure represents a seven-day revenue which fluctuates from week-to-week. The fluctuation gives the team motivation to perform as they see how the company as a whole is performing over a certain period (Geckoboard 2018, online). Furthermore, making the revenue figure visible on the dashboard ensures that the employee understands how important this number is to the cloth fashion organization. Velcu-Laitinen and Yigitbasioglu (2012, p.57) conclude that showing the company-wide performance in real-time makes it easier for every individual to understand how their contribution impacts on this metric. A widget with the weekly revenue figure is also displayed which shows the contribution of the sales department to organizational performance. Finally, there is a text widget that is placed at the bottom that provides a description of the dashboard.
Important KPIs included in the dashboard to measure the progress of the sales department include; Average Purchase Value which is the average amount of dollar that is spent on an individual transaction on a service or product offered by an organization. Placing the average purchase value is important for the cloth fashion outlet as the organization will be able to see if activities that are focused on sales are generating a lower value or a higher value deals. Another important KPI is Average Sales Cycle Length defined as the amount of time that is taken for a business to close a deal. Introducing this element in the company's sales dashboard helps the sales department to predict its sales forecast. Pipeline Volume vs. Goal which involves a comparison between the numbers of leads in the company’s sales pipeline to the number of leads that are needed to achieve the target goal. Geckoboard (2018, online) argues that this is an important KPI that helps the business determine if it is on track to meet the sales target.
References
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