IBM and SAP Release Data-Driven Forecast Accuracy Tool

Service provides hyperlocal insights to businesses

ARMONK, N.Y. --IBM and SAP have released a retail solution that uses real-time data from inside and outside stores to help improve forecast accuracy.

IBM's Metro Pulse uses the company's cognitive services to provide hyperlocal insights on weather, events, traffic and demographics and helps address key industry challenges such as on-shelf availability and demand forecasting accuracy. During trials of this cognitive technology in more than 100 stores in multiple U.S. markets, the solution improved forecasting accuracy of volatile, hard-to-forecast products by 75%, according to the company.

For example, a New York City sales operation manager for a beverage company may try to forecast sales during the New York Marathon at one of her team’s stores along the running route. Using this new solution, she could incorporate information on traffic flows at different points along the route, as well as the effect of forecasted weather on demand. This allows her to predict with much greater accuracy the spikes in demand at a store level. Based on these insights, the sales operation manager can create tasks and suggested orders for sales representatives, who in turn can discuss with each individual store manager how to make the appropriate product adjustments expected to maximize incremental sales for both parties.

The solution uses near real-time data to improve planning and execution in the physical store. Unique data sources, such as IBM’s Metro Pulse, flow through SAP's Cloud Platform to provide insights that can be acted upon almost immediately. These insights are fueled by live business, unique near real-time market-demand signals and a digital core that helps make the execution possible.

This is the first plan for an industry-focused solution resulting from the two companies’ digital transformation partnership announced last year. It is one of several industry-specific digital solutions in development. It also expands upon the investment IBM has made in retail and consumer packaged goods customers with SAP S/4HANA industry solutions. The two companies also intend to collaborate on SAP Model Company services, a prepackaged, ready-to-use, end-to-end reference solution that can be customized to meet specific line-of-business and industry needs to accelerate the time to value.

"SAP S/4HANA, coupled with access to rich, hyperlocal data understood and reasoned by IBM’s cognitive services, can provide consumer product and retail business users across the c-suite with the specific insights to gain a competitive advantage in major markets,” said Laurence Haziot, IBM global managing director and general manager of consumer industries.

IBM Global Business Services, Armonk, N.Y., aims to help organizations fundamentally redesign experiences to create new sources of value, digitally reinvent their operations for great efficiency and transform their enterprise through data.

Newton Square, Pa.-based SAP offers enterpise application software and services to enable more than 355,000 business and public sector customers to operate profitably, adapt continuously and grow sustainably.

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