The company specializes in manufacturing sportswear and is part of the fashion retail industry. Lately, the fashion retail industry has seen an increase in adoption of business intelligence technology and Al-Ikhsan of Malaysia is a successful example on top of the list.
Reportedly, within five years of studying insights of their business, the company saw a gain of 30% to 40% in market share. The gross profit was improved by 6% and EBITDA gained 4% before the pandemic. EBITDA is the earnings before interest, taxes, depreciation, and amortization.
In the Covid era amid lockdown, Al-Ikhsan’s business intelligence solution also enabled them to perform profitably where the company expanded from 120 to 140 stores in that period.
With these successful indicators, the leading sportswear now envisages to expand to 200 stores in next two years using the power of Business Intelligence.
Talking about the challenge of business intelligence, the CEO of Al-Ikhsan Sports, Vach Pillutla described the fashion retail industry as a comparatively complex scenario of business analytics. By saying this Pillutla means the additional dimensions of fashion retail that need to be considered. For example, with the type and size of a product the color dimension increases the level of obscurity in performing analytics.
Al-Ikhsan was founded in 1993 and today runs 140 sportswear stores in Malaysia. As part of its digital transformation journey, the company invested USD150,000 to deploy a BI tool: QlikView in 2017.
The deployment was carefully planned in a period of six-months considering the value the BI software could offer to the company. The training requirements of staff were also evaluated during the process.
BI enabled us to move from being a merely reactive business to a more proactive and analytics-driven business
PILLUTLA, CEO AL-IKHSAN
Al-Ikhsan’s Business Intelligence
The company’s CEO Pillutla explains the usability of their deployed BI tool QlikView. The software is used to “monitor and measure relevant metrics on a daily basis”. The company employs dashboards and data analytics templates which are updated as new business data feeds in the system.
QlikView is integrated with Al-Ikhsan’s existing database which is part of the company’s Enterprise Resource Planning system. The database collects historical data on the company’s performance and management parameters. These parameters include data on: availability of SKUs at 140 stores (SKU is a Stock Keeping Unit, a code that identifies a product, its size and color), sales of product, and month-on-hand (MoH) inventory (MoH describes how many months it will take to sell the inventory on hand).
The fact that Al-Ikhsan has 40,000 to 50,000 merchandise in its inventory which are physically impossible to keep in mind, the company uses BI tools for visualization to extract key insights that drive profitable decisions. Before the time of using QlikView such business decisions were merely driven by gut feeling or intuition.
Pillutla says that his company prepares products nine months in advance which cannot be changed afterwards. Business intelligence helps Pillutla’s team to prepare “the right products, right sizes and colors at the right price points”.
The case of Al-Ikhsan’s sustainable use of BI technology shows the power of data analytics to empower business decisions. The role of business intelligence is especially significant for large companies where the decision making is simply out of human’s scope.
