Q: How can retailers can make better decisions that help reduce costs and increase profitability?
A: With the help of relevant, at-a-glance information provided by a retail ERP dashboard.
This is especially useful in calculating how indirect expenses such as overhead or occupancy costs affect store revenue.
Retail ERP dashboards are customized according to key performance indicators (KPIs) pertinent to a specific business operation or to an employee’s role. So to measure the performance of a customer service call center, the KPIs might include how long it took for a representative to answer calls, customer ratings or the number of customer complaints.
Most dashboards feature a low set-up cost because they’re frequently included with a resource planning ERP system. The system-generated dashboard, also called a role center, contains standard KPI metrics that are used to create various reports, including financial reports, cash flow information and sales reports. All the metrics are “drillable,” allowing retailers to dig into the details behind the metrics.
Here are five ways retailers should use retail ERP dashboards to obtain relevant financial information and better data visibility for decision-making.
1. Access to real-time data:
Let’s say an apparel retail chain has various store locations, each with varying rental prices that increase annually. Utility expenses also vary depending on the store’s square footage or location. If retailers don’t adjust their operations according to shifting overhead and occupancy costs, it can greatly affect their bottom line.
This is where a retail ERP dashboard is able to help. It provides retailers with an abundance of at-a-glance data, quickly showing how overhead and occupancy costs affect sales profits, employee salaries and other expenses at each store location.
Access to real-time information is vital so that retailers can immediately see the cause and effect of decisions on business operations. This also helps retailers to better adjust to the ebb and flow of industry trends.
2. Keep budget in check:
A dashboard allows retailers to check cost overruns for budgeted items, including rent or store utilities, in real time. Just configure the retail ERP dashboard to conduct a financial analysis of expenses in your system, including rent, utilities, Internet access and more. With an at-a-glance dashboard display, retailers are able to compare whether their ongoing occupancy and overhead costs are consistent with the budgeted costs.
3. Gain deeper insights into business operations:
Dashboards help retailers to narrow down the correlation or root cause of an unusual or specific event, such as a spike in expenses. So if the dashboard shows spikes in other data sets — such as non-operating expenses — occurring at the same time, retailers can identify at-a-glance possible correlations.
4. Stay focused on performance outcomes:
It used to be common for a retailer’s corporate office to track KPIs using dashboard metrics, sending KPI reports to local store managers either monthly or weekly.
These days, most retailers are moving the primary ownership and the responsibility of creating KPI dashboards and metrics to local store managers. Since such managers directly operate the store, they greatly benefit from having real-time and at-a-glance performance metrics of what they’re tracking. This often leads to better decision-making based on performance outcomes.
5. Make better decisions using interactive dashboards:
With regard to managing overhead or occupancy costs, store managers are able to run “what-if” scenarios using KPI dashboards. The key is to have accurate data in the retail ERP system, which is the original source for a KPI dashboard. Retailers should update data in their retail ERP system frequently.
Retail KPI dashboards are helpful tools in making business decisions, especially when it comes to overhead and occupancy costs. Dashboards make it easier for store managers to set and track metrics as well as obtain at-a-glance results to identify the status of store operations in real time. In addition, dashboard metrics enable retailers to conduct a “deep dive” of data, pinpointing a source or correlation of performance metrics.
Author: Thomas Nielsen
To learn more about using a retail ERP dashboard, schedule a demo of ArcherPoint Retail’s Retail Management Solutions.