Topic: SAP business analysis Module: Enterprise Systems, Distinction mark at 75 per cent. Date: Apr 2012 Sheffield Hallam Assignment

1. Assessment 2: Individual Details Report
Supporting Document for
The Strategic Direction of Business Intelligence (BI)
Team A
Module: 12-7714 Enterprise Systems
Assessment: Assessment 2 (Individual)
Title: The Strategic Direction of BI
Course: Enterprise Systems Professionals
Author: MrTraitet Thepbandansuk
Student number: 20043132
Total pages: 15 pages (Including cover page)
Word Count: 1500 words (Excludingcover page, annotated diagrams
and references)
Submission deadline: Friday18thMay2012
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2. The Strategic Direction of Business Intelligence
Traitet Thepbandansuk, Team A
1. INTRODUCTION
At this moment, the company is in crisis because we have not made any profit for several months. To turn
this crisis into an opportunity, business intelligence (BI) solutions become necessary to increase our
competitive advantages. This report illustrates the BI strategic direction written by Traitet Thepbandansuk,
who is a BI business analyst. The objectives are to analyse existing problems from historical data, and to
demonstrate how the strategic direction can be achieved. This paper mainly explains by using graphical
information with annotations to indirectly express why visual information is powerful.
As can be seen in Figure 1, the company is facing four significant problems: high costs, low sales,
overstocking, and strong competition. The main causesof these problems areemployees who use
insufficient information to make decisions, and theERP system which cannot provide enough effective
information for their benefit. Therefore, the main implementation strategyis providingvisual information and
tools to help business users analyse data and make better decisions faster (Leger 2012).This paper is
separated into three parts: data analysis, solutions and benefits as follows.
Figure 1Existing problems and proposed solutions
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3. 2. ANALYSIS
With regards to the initial analysis, the company could not make any profit because we had high expenses
for numerous items,whereas the sales volume was comparatively low, as shown in Figure 2.1. The
causes of the problems relating to BI are summarised into three perspectives: process, people and
technology, as shown in Figures 2.2.The significant problems arethenanalysed in the following sections.
Figure 2.1Profit and loss, and cost breakdown
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4. Figure 2.2 Problems analysiswith regards to BI
Figure 2.3Drilldown information
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5. 2.1 Analysis of the low sales
Problem
According tohistorical data summarisedin figure 2.1.1, the sales volumewasalmostzero from day 1 to 25 in
the first month,and again from day 9 to 19 in the third monthbecausewe did not have sufficient raw
material to produce finished goods. Furthermore, Figure 2.1.2 shows that the prices of product F02 were
set much higher than competitorswhichcaused us lose sales opportunities.
Analysis
The root cause of this problem was that routine jobs were not operated regularly. For example, MRP was
not executed in appropriate time to purchase raw materials. Therefore, we did not have raw materials to
produce finished goods, whereas fixed costs, such as labour and bank interest, were ongoing expenses.
Figure 2.1.1 Low sales problem
Figure 2.1.2 Overpricing problem
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6. Figure 2.1.3 Sales and ongoing expenses
Working model of alert notification
The below figures illustates alert notification solutions to warnbusiness users about problems that should
be raised, such as overpricing, insufficient materials, and decreasing sales volume in specific regions.
Figure 2.1.4Alert notification solutions
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7. 2.2 Analysis of the inventory problems
Problem
Due to poor decision making and communication, there had been no sales of product F02 for 18 days,
whereas it had been produced continuously,as shown in Figure 2.2.1. Therefore, some products, such as
F06, could not be produced because ofinsufficient raw materials. Moreover, finished goods were not
produced with reference to sales volume,as illustrated in Figure 2.2.2.
Analysis
When a product does not sell, the sales department should immediately consider adjusting prices and
marketing expenses to sell it. The production planning staff must also regularly monitor stock levels, and
communicate with the sales department to produce an appropriate number of finished goods
dependanton demand.
Figure 2.2.1 Analysis of inventory problems
Figure 2.2.2 Non-balance problem
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8. Working model of automatic visual reports
Theinventory problems can be solved bycross-functional, automaticand visual reports.BI solutions should
make it easy for users to preview reports and make decisions. However, business users must always
carefully analyse the reports before making decisions. A working model for reporting is illustrated in Figure
2.2.3.
Figure 2.2.3Automatic visual Reports
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9. 2.3 Data analytics
FCA tools shown in Figure 2.3.2 are an effective insight into complex data. For example, analysing
customer behaviour to set prices and plan marketing campaigns, which are suitable for each sales region
and distribution channels. Although there is only historical data for 3 months, the relationship results from
analysis by FCA are quite useful for marketing, as shown below.
Figure 2.3.1 Knowledge generated by FCA tools
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10. Data analytics procedure by FCA Tools
Figure 2.3.2 Data analytics by FCA
2.4 Summary of decision-making solutions
Decision making with regards to deciding the selling price, marketing expensesand sales forecasts can be
greatly improved by using alert notifications, visual reports and FCA tools,as shown below.
Figure 2.4.1 BI tools for decision making
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11. 3. SOLUTIONS
The key factors in successfully implementing BI are not only advanced technology, but also positive
business processes, and people (Yeoh and Koronios 2010). Therefore, the primary strategy is continuous
improvement of people skills and business processes to align BI technologies with business
strategies.The secondary strategies are utilising SAP standard features, using FCA tools, and
implementing SAP BW and BusinessObjects as shown in Figure 3.1.
The solutions based on the framework in Figure 3.2 are separated into 2 phases. Firstly, to earn higher
income and reduce costs, the development of automatic reports and e-mail notifications are urgently
needed to enhance the decision-making processes and eliminate unplanned events(Wight 2005). They
also encourage business users to use sufficient information before making decisions instead of pride on
gut-based decisions (Davenport, Harris and Morison 2010). Regarding implementing consideration,
utilising SAP standard features not only savestime solving immediate problems mentioned in the analysis
section, but it also prepares requirements before implementing SAP BW in the second phase.
Secondly, SAP BW and BusinessObjects take eight months for the implementation based on Accelerated
SAP (ASAP) methodology. This approach is a proven methodology, which can reduce time, costs and
risks of the implementation (Yucel and Gurkan 2011). Furthermore, the BusinessObjects tools selected for
data analysis and reporting are Crystal Report, Xcelsius and and Pioneer. With drag and drop interfaces,
business users are convenient to customisevisual reports, and analyse data by themselves. Finally, as
can be seen in Figure 3.3, data is seamlessly integrated from ERP and legacy systems with SAP BW.
Therefore, information can be combined from both SAP and Non-SAP systems to analyse and make
decisions.
Figure 3.1BI implementation
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12. Figure 3.2Framework for BI implementation
Figure 3.3BI integration
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13. 4. JUSTIFICATION AND BENEFITS CASE
The implementation starts by utilising SAP standard features and using basic BI tools in the first year, and
then implementing SAP BW and BusinessObjects in the second year. As can be seen in Table 4.1, our
strategic direction can bring several benefits. Firstly, the alignment of BI implementation with business
strategies will make sure that the business goals are addressed to enhance business advantages (Walker
2007). Secondly, automatic reports can reduce the workload and encourage users to use adequate
information to make better decisions faster, whereas alert notifications enable the users to execute their
tasks in a timely manner. Thirdly, the BI analytics tools can reveal hidden knowledge from huge data, and
enable decisions to be made based upon actual business trends (Jason 2008). Moreover, SAP BW and
BusinessObjects tools enhance reporting capabilities because real-time information can be automatically
extracted from different sources. Eventually, BusinessObjects toolsare easy to use. Therefore, business
users are conveniently ableto develop and customise reports by themselves (Battersby 2008).
Although implementing BI has many advantages, there are some risks that should be considered. Firstly,
insufficient support from the top management is a significant risk in terms of the alignment of BI with
business strategies to achieve business goals(Tasai 2010). Secondly, end-users resist changes because
they think that new business processes may multiply their tasks and make them more difficult to work
with(Peng and Nunes 2008). Thirdly, when everyone uses BI information to makedecisions, unauthorised
accessibility and the poor quality of data arepotential risks that can damage the business (Egger 2007).
Finally, if requirements are not clearly identified, information provided by BI might not be compatible with
business needs. Therefore, the company risks spendingmore time and money on improvements.
Table 4.1 Strategic directions, benefits and risks
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14. 5. CONCLUSION
Finally, the company is in crisis because we have high expenses but are earning low income. The main
reasons are the decision making processes and the ignorance of tasks, such as regularly monitoring
reports and executing MRP. To solve immediate problems, automatic visual reports and alert notifications
will be developed suddenly to reduce waste and increase income, whereas FCA tools will be used for
market analysis. Furthermore, the strategic directionsarethe alignment of BI with business strategies,and
providing information for making faster decisions. Therefore, SAP BW and BusinessObjects will be
implemented during the second year to enhance reporting and data analysis capabilities. The main
benefits should be increasing revenue, reducing costs, and making quality decisions quicker. However,
some risks that should be considered are top management support, user resistance to change, data
quality and accessibility.
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