The retail industry has always been competitive with very slim profit margins. Retailers can increase their sales, their profits, their relationships with their customers, and their competitiveness by effectively and efficiently managing their inventory. Historical sales data is just as important as accurate sales forecasts in spotting trends and making critical business decisions. Balancing inventory to optimize and maximize ROI entails understanding the marketplace, effectively reducing warehouse costs and customer returns, and improving sales.

        Existing applications for reporting and analyzing data are inflexible and inefficient. Many retailers are moving to cloud-based SaaS (Software-as-a-Service) applications for business intelligence analysis and evaluation of business metrics. SaaS and cloud-based solutions can be implemented across all departments, including purchasing, distribution, and point-of-sale, and can be accessed from any location, computer, or mobile device. Cloud-based business intelligence technology has the capability to assist in the management of inventory more rapidly, more efficiently, and more effectively; thereby boosting profits, enhancing the competitive position, and improving customer relationships.

        Inventory management is a key component to the success of retailers and several capabilities need to be available to understand the natural fluctuations of inventory and customer buying patterns.

1. 1)Cross-functional data visibility for orders, shipping, receiving, distribution, customer returns, and marketing and advertising promotions.
2. 2)Clear and real-time views of sales trends to maximize and optimize the product mix, including SKUs, categories, and store-by-store or region-by-region sales data.
3. 3)A combination of metrics reports including forecasts sales, invoice aging, point-of-sale data for each reporting period—weekly, monthly, or quarterly.
4. 4)Management capability of warehouse storage needs and inventory supply needs based on past and future sales data.
5. 5)Strategic just-in-time inventory management that also does not negatively impact the supply chain or revenues.

        SaaS-based inventory management systems does not require in-house IT resources for installation or maintenance of the applications, and allow for rapid deployment of applications. Many retailers are moving to on-demand business intelligence for their inventory management needs in order to realize cost savings, increase the speed and flexibility of data retrieval and analysis, and reduce dependent on location-based IT departments.