Retail and hospitality companies unlock the data insights they need to face the future

Keith Pickens Profile picture for user Keith Pickens February 28, 2024
Summary:
Workday's Keith Pickens looks at the findings from two surveys exploring the challenges faced by business leaders in the hospitality and retail industries - and how customers have addressed them by unlocking data insights.

Two people looking at a laptop in an office discussing data decision making © PeopleImages - Canva.com
(© PeopleImages - Canva.com)

The past few years haven’t been easy for retail and hospitality leaders. The disruption of these years has highlighted that organizations must be more agile and flexible in their operating models. Only then will they be able to predict and respond to fluctuating market conditions.

However, retail and hospitality companies don’t always have the technology in place to allow them to operate in such a fluid and responsive manner. Instead, the legacy finance and HR systems they rely on make change difficult, if not impossible, and prevent decision-makers from accessing the insights vital to making intelligent decisions.

IDC recently surveyed IT and business decision-makers in the retail* and hospitality** industries. Over three-quarters admitted they had more to do in finance and planning to become fully prepared for future challenges. 

Data-driven decision making

The top priority for retailers is improving data-driven decision making, followed by planning for new business models and growth, and attracting, retaining and upskilling the right talent.

In order to achieve those improvements, retailers need to modernize their legacy systems and processes to improve visibility and decision-making. At the moment, they’re being hindered by disparate systems, siloed data and integration complexity. 

RaceTrac was facing all these challenges before it made the switch to Workday.

The Atlanta-based company owns and operates 800+ stores across thirteen states, employing close to 10,000 people.

RaceTrac previously housed its financial data in three systems that were time-consuming to run and error-prone. The company experienced poor visibility into actionable data within the general ledger, and its finance team found it difficult to connect purchases with what was actually happening in stores.

Speaking the same language

One of the bigger challenges for RaceTrac finance executives was connecting data to its stores and retail assets. As vice president of accounting Merlix Reynolds explains:

People need information to be able to run their business, but weren't speaking the same language. As accountants, we were speaking in codes and in different numbers, and when we needed to truly come together and collaborate, we couldn't.

Using Workday systems including Financial Management, Human Capital Management and Payroll, RaceTrac has been able to reduce those three separate finance systems to just one, and is seeing a 75% reduction in internal queries, a two-day reduction in AP reimbursement cycle times, and 7,000 ledger accounts down to 330.

RaceTrac’s financial and HR data is now unified, and the automated workflows and enhanced reporting are driving greater profitability and helping management make better-informed decisions. This is all underpinned by the new technology systems, which keep things simple and allow everyone to speak the same language, as Reynolds explains.

They use the terminology every day, from putting in a supplier invoice to doing an expense report, so when they need something from us, they can truly get it. We can get to it fast,” she says.

The impact that Workday has had on our finance organization is amazing. We are a data-driven organization, and we believe that getting that data to our business owners at the right time with the right speed with the right credibility will allow them to truly move the needle within our stores.

Updating its finance and HR to a more modern system will help to ensure RaceTrac, which has been trading for 90 years, will continue outdoing the competition and offering customer excellence for many decades to come.

Better visibility for the road ahead

RaceTrac’s experience tallies with the findings from the IDC InfoBrief*. When it comes to the biggest challenges in managing systems, processes and functions in the past 18 months, 44% of retailers cited limited visibility into operations across the front and back offices, and a lack of confidence in data used to drive intelligent decision making.

Challenges around data access and integrity are also common among retailers. When asked about the most difficult challenge they face when integrating core operational systems, 45% said data quality and standardization, while 39% cited disconnected legacy systems and point solutions, another problem RaceTrac has overcome with its switch to Workday.

By partnering with a cloud solution provider and modernizing systems, processes and operations, retailers will find it easier to expand market reach, accelerate innovation, and increase efficiency and agility.

With the latest technology systems in place, retailers can also benefit from artificial intelligence and machine learning, whether that’s for customer recommendations or anomaly detection for finance transactions.

Working toward a more hospitable future

Hospitality organizations are facing many of the same challenges to retailers when it comes to legacy technology. Heightened guest expectations, labor shortages and extremely tight margins are causing headaches for firms in the hospitality sector. While these problems can be aided with the right technology, existing systems aren’t always helpful.

The IDC hospitality sector research** found that around a third of users have frustrations with current financial and planning systems. Primarily, this was down to issues with financial information gathering and reporting, followed by difficulty in maintaining integrations with other systems, and disruptive upgrades and system downtime.

Respondents to the survey felt that using connected cloud services in hospitality business systems would lead to improved risk management, expanded market reach, and increased efficiency and agility.

Hospitality firms are also keen to make use of AI and ML. More than one-third of hospitality organizations are using or considering using AI and ML capabilities to automate menial time-consuming tasks to free up staff time for high-value guest-facing interactions, as well as for anomaly detection. But again, such advanced technologies require systems adapted to modern architecture.

AI and ML potential

Restaurant chain P.F. Chang's, which is using a unified Workday system for HR and Finance, is one of those hospitality organizations keenly aware of the potential of AI and ML.

P.F. Chang’s switched to Workday in 2021, when it wanted to simplify its technology operations. Having a one-stop-shop for restaurant managers gives them access to real-time data that speeds up hiring and employment decisions – critical in such a competitive labor market.

The latest Workday AI solutions will offer P.F. Chang's further benefits around data and decision-making. These include generative AI capabilities to address common business challenges such as generating job descriptions and knowledge base articles; and the Workday AI Marketplace to help customers easily find and deploy trusted AI and ML apps.

Speaking on the launch of the AI products, Art Kilmer, chief operating officer at P.F. Chang's China Bistro, said: 

Workday is the technical backbone that brings our finance, HR, and operational data together in one place to help us manage our people and effectively run our business. The AI embedded into the Workday platform helps augment our people so we can move faster, make more strategic decisions, and deliver operational efficiencies across our entire business, ultimately enabling us to better serve our customers.

Conclusion

Retailers and hospitality organizations realize that modern, cloud-based finance systems are crucial to being able to respond to change and current pressures. Disparate systems and siloed data need to be replaced in favor of a unified, consolidated enterprise finance platform to facilitate better informed and faster decisions.

As the RaceTrac and P.F. Chang's examples show, switching to an agile, connected finance and HR system gives retail and hospitality businesses the foundation they need to operate and compete in an ever-changing landscape.

* IDC InfoBrief, sponsored by Workday, How Intelligent Business Systems Help Retailers Drive Profitability and Growth, IDC #US51011223, August 2023

** IDC InfoBrief, sponsored by Workday, How Intelligent Business Systems Help Drive Profitability and Growth in Hospitality, IDC #US51011323, August 2023

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