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Advanced Topics In Business Intelligence

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The blurring of the line between decision support systems and operational systems because of real-time warehousing, the use of Enterprise Information Integration (EII), and closed- loop business …

The blurring of the line between decision support systems and operational systems because of real-time warehousing, the use of Enterprise Information Integration (EII), and closed- loop business processes

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  • 1. ADVANCED TOPICS IN BUSINESS INTELLIGENCE The blurring of the line between decision support systems and operational systems because of real- time warehousing, the use of Enterprise Information Integration (EII), and closed- loop business processes
  • 2. Contents  TopicUnderstanding  Business value  Case Study  Implications to organizations  Links to and implications for BI projects  Looking ahead
  • 3. Topic Understanding Decision Support Systems Operational Systems (DSS) Term used in data warehousing Class of information systems to refer to a system that is (including but not limited to computerized systems) that used to process the day-to-day support business and transactions of an organization. organizational decision-making activities. Categorized by These systems are designed Types: so processing of day-to-day Communication-driven transactions is performed Data-driven efficiently and the integrity of Document-driven the transactional data is Knowledge-driven preserved.
  • 4. Topic Understanding Real-Time Evolution in organization use Warehousing Updated every time an operational system performs a transaction (e.g. an order or a delivery or a booking.)
  • 5. Topic Understanding Enterprise Information Integration Closed- loop business processes (Ell) Refers to software systems that can Encompass of enterprise-wide take data from a variety of internal processes. and external sources and in different formats and treat them as a single data source. Data access technologies: ADO.NET JDBC ODBC OLE DB XQuery Service Data Objects (SDO) for Java, C++ and .Net clients and any type of data source
  • 6. Business value 1970s  The most significant trend is the Original mission statement of creation of tools that provide visibility empowering the real-time enterprise — the R in SAP/R3 — of both underlying processes and stands for real-time surface issues — to enable decision makers at all levels of the enterprise 1990s Real-time order and fulfillment to ―close the loop‖ and reduce the system resulted in 97%+ customer time it takes to make and act upon satisfaction rate and helped to decisions. propel Dell to the number one slot in the personal computer industry.  Demands to implement real-time solutions: 2000s Average four-day fill rate increased  Increased access to information from 96.5% to 98.5%, netting $20  Better ways to distribute information to million in savings from reduced the systems and individuals who can safety stock and a $10 million process it savings in excess transport  Improved techniques to gain insight from
  • 7. Business value Benefits Drawbacks Increased productivity due to fewer manual checks for accuracy. Only senior-level managerial attention will induce cultural change Reduction in the time and effort required to produce reports thanks to data consolidation. According to TDWI Research, the average data warehousing project costs $1.1 million and takes 10 months Enhanced ability to comply with regulatory requirements and greater to deliver, while a data mart project costs $544,000 and – and more confident – audit readiness. takes six months to deliver.1 Enhanced access to highly consistent information, as well as to Most BI solutions are used by less than 20 percent of unstructured data. employees (if that) and provide only departmental views of  Enhanced ability to transform data into usable and actionable data. information.  Business are not agile enough to deal with real-time Reduced cost and effort required for virtually every IT project. information Reduced IT costs associated with data maintenance. Burden the production system by polling it continually. ALTERNATIVE: Centralized data warehouse Elimination of custom programming to build data extraction and as a repository and distribution engine for manipulation. online transaction processing data. Incremental revenue from the ability to cross-sell and up-sell related products and services. 1From In Search of a Single Version of Truth: Strategies for Consolidating Analytic Silos by Wayne Eckerson, TDWI Best Practices Report, 2004 (www.tdwi.org/research/reportseries). Technically, the numbers are for Improved customer service and reduced time required to serve each consolidating data warehouses, but the common approach for consolidation was starting from scratch.
  • 8. Case Study  The Path Less Taken.  Integration of firm's resource and capability to implement enterprise CRM: A case study of a retail bank in Korea.
  • 9. WESCO International The Path Less Taken
  • 10. Case Study: The Path Less Taken  Company Wesco International  FORTUNE 500 COMPANY with $5.3 BILLION in revenue in 2006  Electrical and industrial product distributor  Pittsburgh-base  More than 6,000 employees  370 full-service branches across the U.S. and Canada  Eight high-tech distribution centers  More than 100,000 customers worldwide
  • 11. Case Study: The Path Less Taken  Wesco Business  Its strategy has centered on putting inventory; expertise and services where its customers need them.  Customers cross most industries and run the gamut from Boeing to Dow Chemical to PepsiCo  370 branches fed by eight distribution centers  Distribution center managers are given a high degree of autonomy, including the ability to determine inventory; set prices and negotiate contracts
  • 12. Case Study: The Path Less Taken  Wesco Situation  Did not have real-time access to inventory at the branch level, and could not as a result easily shift supplies from one location to another to meet demand.  Did not have immediate access to sales information from the field; this data was consolidated at headquarters via nightly uploads to an Informix database.  Management could not quickly drill down to important customer-level information, such as which customers had recorded a dramatic drop in purchases and were perhaps getting their supplies from a competitor.  The Informix system, installed in 1993, couldn‗t be tweaked much further. It was overloaded and underpowered.  A key sales analysis report required 80 hours of processing time
  • 13. Case Study: The Path Less Taken  In 2000 began evaluating an  In the end decided that Enterprise Resource Planning Wesco didn't need a new system to move closer to real- ERP system time visibility  Looked at systems from SAP and  Decided to replace its Oracle Informix data warehouse with  Cost close to $110 million. an Oracle data warehouse  To achieve the integration would  Construction began 1999 have had to scrap WesNet, its distributed point-of-sale system  NCR account representative (based on a 20-year-old NCR proposed use of an NCR system called ITEM). Teradata system  WesNet was completely paid for,  Company agreed to a incorporated a high degree of customization, and could still be benchmarking exercise expanded.
  • 14. Case Study: The Path Less Taken INFORMIX LEGACY SYSTEM Benchmark Time 80 ORACLE WAREHOUSE required to BENCHMARKS process key Hours reports by 1999 system. 28 2000 12 13 3 4 1.25 0.58 0.25 2006 Month End Invoice Detail Sales & Suppliers Sales Analysis Loading Summary
  • 15. Case Study: The Path Less Taken  Wesco decided to continue  Although Oracle and Teradata are built on implementing Oracle for some relational database management system (RDBMS) technology, in which data is functions organized around related tables (rows and  Transactional data such as columns) of data, the design of pricing, electronic data  Teradata RDBMS has always revolved around fast analysis and retrieval of data. interchange (EDI) and the  Incorporates a technology known as company's e-commerce massively parallel processing, in which environment. database lookups are broken into smaller sub-tasks that are assigned to different  The Oracle system also feeds processors on a multi-processor server information back into Teradata.  Oracle grew up around online transaction processing (OLTP) applications, in which the  Teradata would now serve as the most important thing is to record transactions storage hub for sales such as purchases and payments quickly and reliably analysis, accounts receivable  Can also be tuned and configured to support and payable, supplier summaries more analytical applications such as data warehousing. and customer master records.
  • 16. Case Study: The Path Less Taken Teradata implications to Wesco  Constructed a number of applications more often associated with ERP suites  $5 million more expensive than Oracle  Spent about $10 million on the Teradata  Initially it ran parallel to existent Informix system implementation, including the WebFocus  In 2002 bought new model and reassigned initial piece, and additional applications written for the to application development Oracle databases  Choose a tool for presenting information and  $10 million one-time margin improvement through conducting business intelligence queries the use of the system.  Initially Cognos  $8 million one-time gain through inventory  Eventually Webfocus suite reduction and better distribution of inventory among branches  Closer to real-time access to data from field operations, and a way of drilling down into the  $4 million savings in the first 24 months through data. better management of its discount prices  Tweaked WesNet at the branch level to push  $1 million savings inventory updates to head office several times a  Gained an indefinite extension on its WesNet day system
  • 17. Case Study: The Path Less Taken  Links to and Implications for BI projects  ―The strategy we took isn't right for every organization, but it's something they should consider‖  "Companies have invested a lot of money in developing applications that run their business really well. Why give that up for the cookie-cutter approach of an ERP system‖ John Conte Chief Information Officer Wesco International
  • 18. A case study of a retail bank in Korea Integration of firm's resource and capability to implement enterprise CRM
  • 19. Case Study: Retail Bank in Korea  Introduction  Find-Equity Bank (a pseudonym) one of the big players in Korea  Intense competition in the retail bank industry  Transform from being product- or service-centered into customer-centered  As a customer-centered IT-driven strategy, Customer Relationship Management (CRM) implemented enterprise-wide  In 2003  Concerns  Decrease of the interest profit rate on deposit and loan  Infringing on the banking business by other industries  Dichotomized customer management processes caused by the merger and acquisition with Seoul Bank in 2002 were yielding customer dissatisfaction, consequently resulting in customer defections  Enterprise-wide CRM was deemed to be a mission-critical business strategy to ensure distinguish itself from its competitors, win over new customers, and maintain the loyalty of its
  • 20. Case Study: Retail Bank in Korea Customer Relationship Management (CRM) Implementatio n made up of two different They found that they have been phases (not missing another critical factor: the intended from people the outset) CRM is inherently a business strategy driven by not technology but people
  • 21. Case Study: Retail Bank in Korea  Critical problems  Technological  Difficult to synchronize data acquired from various channels  Required plenty of time to do it because every channel has operated by its own subsystems  The integrity and consistency of customer information were rarely guaranteed  Partial and separated analytical functions supported by each subsystem have caused redundant targeting, resulting in ineffectiveness of marketing campaigns
  • 22. Case Study: Retail Bank in Korea  Critical problems  Strategic  The systems separated by channels forced to grade its customers by not their profits but their deposited amount, and manage them according to each product and channel  The responsibilities of CRM planning and execution activities had been left to each branch  Impose excessive workloads on the employees  Redundant and frequent marketing efforts to the same customers  Increased marketing costs  Diminished response rate  The clerks feel that the CRM was not effective
  • 23. Case Study: Retail Bank in Korea Redesigned integrative data model The six subject areas, that each includes 15 to 24 detailed entities, are not physical but logical divisions such that they are connected with each other systematically
  • 24. Case Study: Retail Bank in Korea Newly designed analysis framework Every analysis activity would be aligned according to each customer life cycle in banking, spanned from selection/contraction to expiration/terminatio n, and each analytical initiative is guided by systematic procedures consisting of customer understanding, strate gy planning and building, execution, a nd result analysis
  • 25. Case Study: Retail Bank in Korea  Operation Capability monotonous message to  Event-based response all customers who system and sales force brought about an automation (SFA) were the identical event key drivers  Expected not only to  Provided a function of real- support making time perception of decisions related to customer needs in terms of customers efficiently, but customer events, enabling also to reduce the the so-called immediate operational cost through responsive system the automation of  Solved the problem preparing the responses of, regardless of the to customers' ordinary customer demands contexts, forwarding a
  • 26. Case Study: Retail Bank in Korea Event-based response system Sales force automation (SFA)  Before only gathered naive events (e.g.,  Considered as a tool for leveraging the event- customer's birthday) daily by a batch processing based marketing strategy at the end of the daily tasks, and delivered the prepared massages to the customers the next day  Efforts began to customize Siebel's solution to integrate it with the event-based marketing  28 events had significant influences on profits, capability many of them had been prepared with no strategic response schemes or inappropriate  Was designed to provide high-degree customer responsive activities at that time knowledge and insights for the effective and efficient sales activity  Now when system perceives an important event from a customer, it first derives the most  Provided learning opportunities for the internal appropriate response strategy for the customer resources and capabilities by feeding the voices and the event automatically, and delivers the of customers such as complaints, praises, and derived response strategy to the customer suggestions collected through various channels through every channel, department, or branch back to the internal resources and capabilities consistently
  • 27. Case Study: Retail Bank in Korea Performance Indexes
  • 28. Case Study: Retail Bank in Korea Implications  Establish a series of CRM  Development of proper education and training employees compensation programs schemes  Providing systematic  Improving its incentive and education and training reward system program  Make a more customer-  Best in profitability per oriented organizational customer in Korea structure  Awarded by Euromoney as  Reorganizing roles and the best private bank for four responsibilities related to consecutive years from 2005 CRM jobs to 2008
  • 29. Case Study: Retail Bank in Korea  Links to and Implications for BI projects  CRM is a continuous learning process rather than an information technology or analytical method2, it should evolve permanently to respond to quickly and continuously changing customer needs  CRM would hardly be implemented successfully when it is considered as a technology, and even its successful implementation does not necessarily mean the success of the strategy  People play the role of interface between a firm's internal 2 service quality and its external service quality, which is vital for A. Osarenkhoe and A. Bennani, An exploratory study of implementation of customer relationship management strategy, Business Process Management Journal 13 (1) (2007), pp. 139–164.managing customer relationship
  • 30. Looking Ahead Where do we go from here?
  • 31. Looking ahead Wesco International Retail Bank in Korea  Putting  Secure present level inventory, expertise of competency and services where its customers need them Always have clear the primary aim goal
  • 32. Looking ahead Wesco International Retail Bank in Korea  Decided did not Phase I  need an Enterprise unsatisfactory: Resource Planning Integration of Functional (ERP) system Resources & Capabilities Initial assessment is a key for efficient success   Diagnosis of CRM The Outcome could not satisfied even spending lots of money and time  Need to evaluate each package carefully on its own merit 
  • 33. Looking ahead Wesco International Retail Bank in Korea  Teradata Data  Event-based Warehouse reduced response system the report process and sales force time 80% in the last automation (SFA) seven years  Real time perception of customer needs  Technology will keep uninterrupted grow   Adoption is not trivial and requires a different organization, human integration and process adaptation
  • 34. Patrón de prueba de pantalla panorámica (16:9) Prueba de la relación de aspecto (Debe parecer circular) 4x3 16x9