and analysis. Mobile-ready apps are created by using drag-and-drop as well as other easy-to-use features.
Figure 2-11 shows an example of using the drag-and-drop feature to add a dimension to a chart.
Figure 2-11: Qlik Sense drag-and-drop development
The new Data load editor serves the same basic purpose as the QlikView script editor – it is the place to create, edit, and execute the ETL script code. A redesigned layout includes new panes in which to manage data connections as well as the debugging process. Figure 2-12 shows the layout of the Data load editor window.
Figure 2-12: The Data load editor
In addition to the full-featured Data load editor, Qlik Sense provides a new wizard for a Quick data load. This new wizard makes loading flat-file data easier than ever before for the non-technical user.
With beautiful visualizations right out of the box, as well as an all-new data load interface, Qlik Sense provides the ability for nearly anyone to quickly create and share beautiful analytic applications.
In Chapters 15 and 16, you’ll learn more about how to build applications using Qlik Sense Desktop.
II
Learning the Core Techniques: Sales Analysis
Chapter 3
Defining a Business Scenario for Sales Analysis
The metric of sales is one of the most important measurements when evaluating the performance and prospects for success for a business. The growth, profitability, and cash flow of your company rely on the level of sales, and margin on those sales, you can achieve. Understanding the value you receive for the sale – the price someone pays you – is critical to making decisions related to product development, supply chain, working capital investments, and so on. The value you receive affects virtually all aspects of your business.
Many businesses believe that they know the value they are receiving for their products and that that price is essentially their price list. There are, however, decisions made every day that affect the value they actually receive. Those decisions can be in the form of customer programs such as co-op advertising, volume discounts, seasonal discounts, markdowns, and so on. They can also take the form of product promotional discounts, damage allowances, and so on. The effect of each of these decisions can result in different transactions in different parts of your ERP/financial reporting systems. These decisions are drivers of sales and margins in your business. Quantifying and understanding these drivers are part of advanced sales analysis beyond the one line on your financial statement labeled “Sales.”
In this chapter, we describe the common characteristics of an advanced sales analysis that can allow your company to better understand the outcomes and the drivers of sales. The data you need for advanced sales analysis can be complicated to identify and access. Business intelligence (BI) tools can accelerate the analytical methods required to access and evaluate that data. The chapters that follow this business case will demonstrate the use of Qlikview business intelligence tools to help you understand more about your business and make better decisions.
“What Do You Mean When You Say Sales?”
This is perhaps the most common question asked at the beginning of every BI project, and the answer is never trivial. When finance people say “sales,” they typically mean revenue. Their definition encompasses delivered and invoiced products or services that are ultimately paid for. Operations executives, on the other hand, may be more interested in “shipments.” Sales people like to count the number of customer orders written, whether or not the product or service was delivered or charged for.
Depending on the audience, sales numbers may represent any of the above, including or excluding various discounts, returns, liquidations, and more. It is very important to know what you’re including in your sales analyses. If you don’t have an accurate understanding of what’s driving your sales, you run the risk of making incorrect pricing or volume decisions.
We have all heard the saying, “they are so good at sales they could sell ice to an Eskimo.” Making a sale is first and foremost a relationship event. After the relationship has been consummated, what is the actual result of the transaction? There are many things to think about when trying to answer this question. The answer to the question will come by analyzing the data associated with the analytical questions posed throughout this chapter.
Sales commonly represent the amount that a company bills or invoices its customers for goods and/or services. It is known by a number of business labels, including revenue, billings, sales, and so on.
Many people believe that “sales” analysis is the most understood and straightforward business metric out there. To most, there are only two components to understanding sales – the unit price and how many units shipped. Because of these simplifying assumptions, sales data is too often analyzed only at the aggregate level. This approach can leave many organizations in the dark with respect to significant drivers of their business.
What Is the Real Value of the Sale?
Consider going to a store to buy a retail item of almost any kind. First, you may have received a coupon. With the coupon in hand, you are feeling good about this form of incentive, which has added to your rationalization to purchase! Then when you get to the store you are bombarded with all kinds of point-of-purchase information about further markdowns, customer loyalty programs, and even “point” systems that can be used against future purchases. The item you set out to purchase may normally have a price tag of $100, but with all the incentives, it costs you only $75. You are now convinced that you just received the deal of the century!
This example raises some basic questions, such as what is the real price of the item you bought and what should it be? A related question is what is the revenue, or sale, to the company that sold you the item?
Do you know the real price of your company’s products? Is it the “list” price or list price reduced by terms, discounts, and other programs that you don’t have much visibility into?
Another example involves a manufacturer of consumer products that sells to major retail chains in North America. In order to set the stage for this example, it is important to know that retail chains, like most businesses, are constantly challenged with achieving results in terms of sales and margin. To help meet this challenge, retailers have ways to “ask” suppliers for money to increase their margins. These many ways include co-op advertising paid for by the manufacturer, free goods, in some cases as a promotion, and slotting allowances. In addition to the demands placed on suppliers to pay for these programs, suppliers typically have to pay commissions to those who represent their products.
Slotting allowances, for those of you who are not painfully aware of them, are the costs of buying out the competitors’ merchandise to make room for your products on store shelves.
The company in question was attempting to understand their sales information and why their margins continued to erode. The company controller was attempting to help so he went to see the sales folks. After a number of well placed questions and intentionally vague answers, the controller believed he finally had an understanding of some of the issues. After verifying with the sales folks that he had heard the facts correctly, he said, “So, we paid sales commissions and we owe the customer
