5 Tips for Maximizing the Value of Exception-Based Reporting SystemsGeneral
Exception-Based Reporting (EBR) has been widely used by retailers to analyze transactional data for over 25 years. The most common purpose of this type of reporting has been to help loss prevention professionals at retail organizations to easily identify instances of potentially fraudulent activity by using data from point-of-sale (POS) systems. With an EBR solution, Loss Prevention Analysts no longer need to search through cumbersome sales records, or video surveillance footage to spot patterns of dishonesty or inefficiency. And yet, many aren’t satisfied with the Return on Investment (ROI) or value their system delivers back to the overall business. Before starting over with a new system evaluation and selection process, it may help to take a step back and examine the ways in which your current system could be better. Even if you ultimately decide to implement a new tool, there are ways to maximize value in the short-term while also setting your new implementation project up for success.
Here are five recommendations for maximizing the value of the Exception-Based Reporting resources you already have:
1. Gain Buy-In from Organizational Leaders
Whether the end result of your EBR audit is a new implementation project or not, it’s important to get organizational buy-in up front. Maximizing the value of a new or current system often means involving various departments and even altering existing business processes. EBR tools can make sense of a plethora of data that can support areas beyond fraud and theft, including: Operations, Sales Audit, Finance, Promotions, Inventory Control, Training, and much more. Limiting input from these areas will limit your ability to assist the company by fully utilizing the power of a highly effective tool. Of course, people are naturally resistant to change, so ensuring that those most affected are informed and engaged throughout the process will help to set expectations and to uncover new and creative ways to utilize the system. This buy-in will allow you to expand the functionality and usability of the system through incorporating additional datasets and delivering greater insights into organizational performance.
2. Regularly Review Business Processes
Some Loss Prevention and Asset Protection departments operate with blinders on, merely looking for cases to solve rather than stepping back and looking at the big picture. This can be a result of measuring success in terms of cases rather than in opportunity dollars delivered back to the business’ bottom line. The fact of the matter is that a broken process will almost always cost your organization more than fraud. If this is the case, even the best enterprise system will merely mask the problem instead of fixing the root cause. It’s important to periodically document business processes in order to identify any potential causes of misalignment between your technologies and your operational expectations. It’s also important to remember that exception reporting can always provide value to departments outside of Loss Prevention and Asset Protection. Reevaluate how the system is being utilized and determine where else in the organization this type of data analysis and reporting could improve business outcomes and efficiency. Identify any activities that can/should be performed within the EBR system but are not and eliminate any “rogue” alternatives. Ask your vendor and users in other departments which processes can be automated, which data sources can be integrated, and which reports can be simplified to maximize value in various areas of the organization.
3. Address Organizational Change Issues
Improving the ROI of EBR systems will require fundamental organizational change. If users view Loss Prevention imperatives or data analytics and reporting systems as an impediment, they will likely look for other ways to capture and categorize information, turning once again to non-EBR databases and alternatives. Whether intentional or not, employee resistance to change is a common root cause of poor system performance. Employee resistance can be difficult to identify and address but can go a long way in improving operational efficiencies and effectiveness. Conduct an organizational assessment to determine where the organizational issues lie and develop an organizational change management plan to address them. Getting all of the departments of the organization rowing the boat, in the same direction at the same time, is a difficult task but leads to the most fruitful outcome.
4. Provide Users with Targeted EBR Training
Even the best system, implemented perfectly, is useless unless your end-users know how to use it. Employee turnover can often lead to a large number of EBR users without formal training from the initial implementation. Develop a detailed training plan to keep your employees properly trained throughout the lifecycle of your EBR system. Identify employees across different departments that can become power users. Get them trained with the ability to spread and grow institutional knowledge on the data flowing through your EBR tool. Have your power users meet monthly to discuss different ways they have found to utilize the tool in their departments along with ideas to improve and drive efficiencies within the organization. Your training plan should adhere to training best practices to continuously empower users to be more productive using the system.
5. Evaluate the System and Compare to Modern Alternatives
Once process and people issues have been addressed, it’s time to look at the system itself and compare it to other systems on the market. Could another system provide greater value? Is the system taking advantage of modern technologies? Keep in mind that modern EBR vendors invest heavily on consistently improving their solutions with regular functionality improvements, service packs, and other updates that allow users to benefit from lessons learned and emerging technologies. Some systems can achieve a full ROI in less than a year. Consider the costs/benefits of replacing your current system and determine whether this type of project would benefit your organization in the long run.
Implementing the above best practices can help organizations ensure that they extract maximum value from their EBR system with minimum effort. However, fixes to your current legacy system don’t always yield a greater return on investment or lower cost/risk than a full rip and replace system implementation project. If a new, modern EBR system is the better option for your organization’s needs, the above steps will help you build a bullet-proof business case for the new system by comparing the cost and benefits to the cost of fixing your current tool.
Learn more about making the switch from legacy reporting systems to cutting edge technology in our on-demand customer panel webinar, “The Switch: Leaving Legacy Reporting for Modern Data Analytics.”
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