Advanced Topics In Business Intelligence

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

Contents
 TopicUnderstanding
 Business value
 Case Study
 Implications to
organizations
 Links to and
implications for BI
projects
 Looking ahead

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.

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.)

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

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

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.

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.

WESCO International
The Path Less Taken

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


 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

 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

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.

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

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.

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

 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

A case study of a retail bank in Korea
Integration of firm's resource and capability to implement enterprise CRM

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

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

 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

 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

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

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

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

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

Korea
Performance
Indexes

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

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

Looking Ahead
Where do we go from here?

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

Looking ahead

 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


Looking ahead

 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

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Prueba de la
relación de
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circular)

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