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A Network Economy at the SAP Retail Forum

By: Bob McFarland, SVP & General Manager at SAP Retail


Bob McFarlandI was thrilled to host over 150 retail attendees at the SAP Retail Forum in Chicago, IL, which included a visionary keynote from Tony Paoni, Professor at the Kellogg School of Management at Northwestern University.  The theme of Professor Paoni’s keynote was the network economy of today, an economy built upon the sharing of information and data between personnel and business units.


Before the digital revolution and consumerization of IT, a business’s information was siloed.  For example, back in the days of the General Store in The Walton’s, the storeowner was the gatekeeper and holder of information.  He was familiar with his community, his customers and their respective buying habits.  As a result, he could predict the amount of grains, seeds or other goods he needed to have in stock each season to meet his customers’ demand.  He stored and analyzed this data inside his brain.  However, there were several limitations to this method.  If someone new moved into his town, he would have no way of knowing this new customer’s buying habits.  In addition, if demand suddenly changed, the storeowner would have trouble adjusting to it.  Finally, if the storeowner unfortunately passed on, all business and consumer information was lost!

SAP Retail Forum



Clearly, the General Store method of tracking data would never work in the world we live in now – it cannot scale, is inefficient, and relies on biased memory.  With many retailers operating stores all over the world, the multitude of available consumer choices, and a global population that just surpassed seven billion people, there are literally thousands of possible factors that can influence the success or failure of a retailer.  Companies need to make predictions for the future based on a solid foundation of past data and current conditions, despite any fog of uncertainty.  With significant shifts within the economy over the past few years, it is now more important than ever to have the right tools that can analyze the immense amount of data out there to make the right business decisions for our network economy.  As Professor Paoni said “you need a rear view mirror, but you also need a really good windshield if you are going to survive in the Networked Economy”.

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