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Internal Audit, Risk, Business & Technology Consulting
Store Audit Technology Update: The Move to Mobile
Store Audit Technology Update: The Move to Mobile · 1protiviti.com
As retailers cut costs and drive efficiencies
across their organizations, internal audit
functions are turning to technology to
streamline processes, increase analytic
capabilities, and supplement traditional
store audits with continuous monitoring and
standardized store self-audits. Solutions vary,
but the common technology enabling this
“do more with less” trend is low-cost mobile
devices with cloud connectivity.
Protiviti forecasted this trend a decade ago when we
documented the need for more comprehensive and
agile store audit coverage in our white paper, The
Retail Store Audit: Using Technology to Optimize the Audit
Process.1 Our 2012 Internal Audit Capabilities and Needs
Survey included a breakdown of retailer responses
showing that store audit technology had become a
top priority.2 Our experience in the field since then
suggests that the adoption rate and maturity of mobile
audit technology have increased to the point where
retailers not actively pursuing mobile store audit
technology initiatives risk falling behind regulatory
and shareholder control expectations.
This paper revisits the recommendations from our
2006 study, updating them to reflect the emergence of
big data analytics, cloud connectivity, and smartphone
and tablet technology.
Introduction
1 The Retail Store Audit: Using Technology to Optimize the Audit Process, 2006, Protiviti: www.protiviti.com/SG-en/node/12031.
2 Top Priorities for Internal Audit in Retail, 2012, Protiviti: www.protiviti.com.
2 · Protiviti
Benefits of Audit Technology
Technology changes the dynamics of both formal
audits and store self-assessments by enhancing audit
productivity, increasing operational effectiveness and
improving reporting capabilities.
Technology enhances productivity by:
Improving consistency
Uniform data collection from standardized electronic
survey questions provides the most useful information
for analysis. Audit technology can enhance consistency
through customized scoring models and predetermined
response selections for specific questions. Advanced
collection rules can pose questions in sequence to elicit
accurate and relevant responses.
Minimizing the impact of interpretation
Everyone interprets audit questions from their own
unique perspective, which can cause problems with
accuracy and render subjective questions all but
useless. Audit software is designed to keep audits on
track, with downloadable support documentation,
context-sensitive hints and “help text” to clarify
management expectations.
Eliminating data re-entry
Paper-based processes can be slow and cumbersome.
The response time is further delayed as data is sent
to corporate headquarters for manual collation and
synthesis before any further analysis. In an automated
mobile solution, data is entered only once at the store
into a web-based reporting system for real-time results,
with no keying errors, no delays and no paperwork.
Increasing location coverage
In a large population of stores spread over a wide area,
sheer volume demands audits targeted at specific
stores, and some important locations may be lost in
the rush. Self-assessment, coupled with improved
productivity from a mobile reporting solution, not only
allows auditors to physically audit more stores, but
also effectively increases audit reach to all locations
by providing a convenient and easy-to-use means of
comprehensive store-level data collection and analysis.
Technology increases operational effectiveness by:
Generating action items automatically
Mobile audit technology allows retailers to implement
proactive remediation solutions for survey responses
that fall outside of a prescribed range. For all questions
where an unsuitable response is recorded, the user
can be prompted immediately to assign an action
item. Email reminders and action reports are effective
management tools to ensure timely follow-up.
Facilitating shifts in responsibility
A fundamental capability in most automated solutions
allows administrators to set and manage security
privileges and user functionality and oversee changes
to the organizational hierarchy by adding and moving
stores from one jurisdiction to another, as needed, in
the company’s structure.
Enhancing communications
A news bulletin board and in-app messaging can
provide management with a way to create and distribute
relevant updates to users. Automated action item
notification ensures that tasks are assigned consistently
to the appropriate users, improving productivity and
communication among all team members.
Store Audit Technology Update: The Move to Mobile · 3protiviti.com
Technology improves reporting by:
Reducing cycle time from data entry to reporting
Without timely data, leaders are left to make decisions
with an insufficient understanding of performance.
Audits that are completed via mobile app update
automatically, eliminating the need to efax, transcribe
or email audit data. By accelerating the audit cycle,
management can make informed decisions about
targeting low-performing stores and implement
meaningful change.
Improving visibility of key performance metrics
With mobile audit technology, management can assess
key performance metrics in real time. Armed with this
intelligence, management can identify operational
issues and respond with swift, corrective action.
Eliminating data redundancy and enhancing security
In a traditional paper-based system, audits are
distributed via efax or email, which places data
in multiple locations. This creates opportunities
for redundant data to be stored on disparate, and
sometimes unprotected, systems. With mobile audit
technology, data is synchronized upon completion
and saved on a secure, centralized server. This process
optimizes storage requirements, creates a single source
of truth and limits the proliferation of erroneous data.
Tracking store manager performance trends
High-performing store managers are moved often
to help remediate lower-performing store locations.
Mobile audit technology allows retailers to track a
store manager’s performance over time across multiple
locations.
Tracking store performance trends
Audit technology not only can provide management
instantaneous feedback on current store performance, it
also can deliver insight into performance and compliance
trends in real time. Organizations can use that insight to
detect and resolve ongoing problem areas and improve
the overall performance of the organization.
Additionally, the data allows management to rank
stores and districts based on audit performance and,
if desired, to create a competition for the best level of
ongoing compliance.
4 · Protiviti
Key Questions to Ask Before Implementing Mobile Audit Technology
Retail companies should consider the following questions before designing and implementing the self-assessment program and
related mobile audit technology:
Management
Who will own the store audit process: internal audit, loss prevention or store operations?
How frequently will the self-assessment occur? What will be the scope of the follow-up? Who will monitor remediation efforts?
Is management willing to review current practices to identify and prioritize company objectives, risks and controls to be
addressed at the store level?
Will the use of mobile technology in the audit process be a shift in corporate culture? If so, is executive management willing to
take a top-down approach and be the driver behind the new process? And is the leadership team prepared to do what it takes
to establish a strong “tone in the middle,” by getting the buy-in of line-level managers who have significant direct influence on
store-level priorities?
Information Technology
What does the business want to solve by automating the store audit process?
Will the audit software seamlessly integrate into the company’s technology infrastructure while adapting to the idiosyncrasies
of its audit process, or would a cloud-based solution serve the business better?
What is the anticipated budget for implementing the audit technology? What is the time frame for implementing a solution?
Has a return on investment (ROI) analysis been completed to estimate the potential savings and benefits resulting from using
the audit technology?
Store Audit Technology Update: The Move to Mobile · 5protiviti.com
Creating Conditions for Change
The change from paper-based audits to mobile
technology can result in a cultural shift in any
organization. Careful and conscientious creation of
the conditions required to facilitate the change are
necessary for a successful implementation. Like all
corporate change, the tone of any project starts with
executive management. Executive management
will need to establish efficient and effective lines of
communication and proper training. Most important,
leadership must involve all affected levels of the
organization in the implementation process.
Perhaps even more critical will be the ability of
executive management to vest middle managers
and store-level managers in the process. This “tone
in the middle” has been shown to be critical to
employee adoption, because workers tend to be more
responsive to their immediate supervisors than to
executive management.
Once mobile technology has been implemented,
executive management will need to make a concerted
effort to reinforce the necessity of the program’s
ongoing use. From the scope of the audit and scoring
model to accountability and follow-up, each element
of the program must work in unison to reinforce
the program. It will be executive management’s
responsibility to create the conditions that will
allow the acculturation necessary to make the
implementation a success.
ABOUT PROTIVITI
Protiviti is a global consulting firm that delivers deep expertise, objective insights, a tailored approach and unparalleled collaboration to help leaders confidently face the future. Protiviti and our independently owned Member Firms provide consulting solutions in finance, technology, operations, data, analytics, governance, risk and internal audit to our clients through our network of more than 70 offices in over 20 countries.
We have served more than 60 percent of Fortune 1000® and 35 percent of Fortune Global 500® companies. We also work with smaller, growing companies, including those looking to go public, as well as with government agencies. Protiviti is a wholly owned subsidiary of Robert Half (NYSE: RHI). Founded in 1948, Robert Half is a member of the S&P 500 index.
Rick ChildsManaging Director – Leader, Consumer Products and Services Industry [email protected]
CONTACT
6 · Protiviti
© 2016 Protiviti Inc. An Equal Opportunity Employer M/F/Disability/Veterans. PRO-1116-103074 Protiviti is not licensed or registered as a public accounting firm and does not issue opinions on financial statements or offer attestation services.
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