Senheng chief: Up close with dirty data

  • Senheng cofounder learns first-hand about price of poor data
  • Company enjoying double-digit growth every year post-BI launch

Senheng chief: Up close with dirty dataONE of the participants at a recent Harvard Business School executive management programme on big data and analytics, held for the first time outside of its Boston campus, was Lim Kim Heng (pic), cofounder and managing director of Senheng Electric (KL) Sdn Bhd.
 
With all the excitement and buzz over the business benefits to be extracted and from a company’s mass of data, you would think that Lim was attending the programme to start his own big data journey.
 
Wrong. “My big data journey started in 2003 with dirty data, and I can tell you it was very frustrating,” he recalls, able to afford a laugh now.
 
Speaking to Digital News Asia (DNA) on the sidelines of a recent Harvard Business School big data event in Kuala Lumpur, he says his journey really began in 1999 with small data when Lim realised that his stores needed to use IT.
 
He had been reading about how retailers in Taiwan were using IT to better run their stores. Four years earlier, he had already learnt the franchise model from Taiwan.
 
“So we started with point-of-sale terminals (POS) at the point when I had 40 stores. We were capturing basic data around sales and inventory, but we just did not know how to read it,” he says.
 
He quickly started gathering more data, ranging from customer profiles and service data, date of purchase, supply chain management and fulfilment, to the payment modes preferred by customers.
 
That same year, in 1999, Senheng also started building its inhouse ERP (enterprise resource planning) system through a third party. It was another step in his data journey.
 
Learning about BI
 
Around 2002, Lim realised that his IT team would always have him wait a few days whenever he wanted some sales data.
 
This went on for a year until Lim could not take it any longer. “I wanted to be aggressive and needed data when I asked for it, but it was just not happening. Getting the data a few days later was just not good enough,” he declares.
 
“I called in my head of IT in 2003 and asked him what we had to do for me to be able to get data points immediately, and he said we needed to invest in BI (business intelligence) so that he would be able to push to me any data I wanted, in an easy-to-read dashboard.”
 
Lim agreed and they settled on a BI solution, investing RM500,000 to implement it across the Senheng chain – which by 2004 had grown to a RM200-million a year business spread across 80 stores nationwide. [RM1 = US$0.25 at current rates]
 
An excited Lim waited impatiently for his dashboard, one that would finally give him quick visibility of sales and inventory levels across all his stores, instead of having to wait for monthly reports – that would arrive two months later!
 
Alas, to his immense frustration, there was no dashboard. “We found out that our data was ‘dirty.’ There was no dashboard without data we could read,” he says, explaining that the customer data the company had been capturing for years was not in standardised forms.
 
In big data parlance, it was not structured properly. “The input was wrong,” he admits.
 
How messy was it? “It took us two years to clean,” says Lim, who was finally able to receive his dashboard in 2005.
 
The business impact was dramatic. Growth over the past decade had been flattish but since implementing BI in 2005, Senheng has been enjoying double-digit growth every year and crossed the RM1-billion revenue mark in 2013.
 
Powering SME data needs
 

Senheng chief: Up close with dirty data

 
Having witnessed first-hand the business impact of BI and with all the knowhow Senheng acquired though its own data journey, Lim saw an opportunity in the market.
 
“I knew this (BI) was a tool other SMEs (small and medium enterprises) could use to improve their productivity and cost management, but I also knew they would struggle with the high investments needed and hiring the right people to help them in their data journey,” he says.
 
So in 2012, Lim spun off his BI team into a separate company called Black Box Consultancy Sdn Bhd (pic above) to help solve these problems.
 
Senheng’s own problem, which Lim used big data to crack, was its two-million customer base. There was no way he could communicate or upsell to all of them.
 
Partnering with AIG and relying on certain data sets to better help him identify customers likely to purchase insurance has also proven to be particularly successful.
 
With his almost 20-year experience in leveraging data, RM50-million investment into the infrastructure part of e-commerce and with his own BI company, it’s no surprise that Lim remarks: “We are a very dynamic company, though we look like a ‘Chinaman business’.”
 
To learn more about Lim’s data journey, click on the video below:
 

 
Previous Instalment: Retail giant Senheng to enter e-commerce fray with O2O model
 

 
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