Chapter Eleven Business Intelligence: The Next Generation of Knowledge Management Introduction Knowledge neither product nor capability; a critical framework of a fully evolved information economy – WalMart has a 100-terabyte data warehouse to monitor and capture each transaction in each store for better inventory mgmt; improved collaboration with supplier; merchandise on individual store basis; and to provide superior shopper satisfaction – Success from anticipating customer needs before they First gen e-business apps focus on buying and selling goods via Web Second gen apps focus on gaining insights from organizations’ data collected from each transaction – Customer loyalty, enhance profitability – Interpret past transactions and use the knowledge to support decisions about the direction the company should be headed © e-Business Strategies, Evolution of Knowledge Mgmt Apps Companies want apps to make sense of the data gathered – How to make effective use of raw data – How to convert raw data into revenue Wave Foundation of KM: information sorting, extraction, packaging, and dissemination Wave – Reactive, data centric to proactive, query-driven knowledge world © e-Business Strategies, Business Intelligence Wave E-commerce & Click Stream Analysis Extranets & Inter-Enterprise Portals Wave Corporate Intranets & Decision Support Portals Wave Group Memory Systems Wave 1: Group Memory Systems Sharing of info throughout the company – Buzzword of 90s – Discussion boards, bulletin systems, corporate intranets – Instant access to data and reporting info that had previously taken days or weeks to obtain – Core: Lotus Notes and Instraspect apps Failed to live up to promise – Few can define it – Software vendors distancing themselves from GM – Costly efforts not delivering expected ROI © e-Business Strategies, Wave 2: Corporate Intranets and Decision Support Portals For complete and uniform linkage of data resources scattered throughout the organization Intranets alone don’t create knowledge – Data analysis necessary – Decision support portals to automate predictable components of decision maker’s routine Pre-requisite for responsive business model: Decision support portals built on intranets – Home Depot – Decision makers can ask and answer mission-critical questions about business using transaction data assets that have been captured, not exploited to fullest extent © e-Business Strategies, Wave 3: Extranets and Interenterprise Portals Fast info access, customized data and responsiveness driving extranets – New requirements: manage huge data volumes, data breadth coverage, cross-platform support, response-time speed, and broad range of interface choice – DaimlerChrysler Extranet apps encourage trading partners to improve profits by managing inventories in supply chain – preferential treatment for visibility – Lexmark © e-Business Strategies, Wave 4: e-Commerce and Click Stream Analysis User click stream analysis – Marketers need every customer activity and purchase; to be able to analyze, understand their buying preferences; to anticipate their changing expectations – Testing limits of conventional database mgmt; new DBs emerging Intelligent E-mail management – Kana Communications, eGain, and Siebel – Tracks and manages millions of daily interactions for analyzing, reporting and launching customized initiatives in response © e-Business Strategies, Wave 4: e-Commerce and Click Stream Analysis Knowledge Portals – Brio, Business Objects, Cognos, DataChannel, Plumtree, Portera – Call center mgrs to understand historical service trends and customer service patterns, identify problem areas; ultimately increase customer retention rates © e-Business Strategies, Wave 5: Business Intelligence Data analytics, coupled with broadcast engine technology, foundation for proactive business intelligence – Anytime, anywhere, any place BI is proactive and data driven – Automates delivery of info to customers using exception conditions and recurring schedules as triggers for communication Traditional decision support apps not personalize info – MicroStrategy’s DSS Broadcaster include new personalization and distribution capabilities New BI apps turning traditonal query-and-response paradigm of decision support on its head © e-Business Strategies, Wave 5: Business Intelligence Next gen BI apps to use ecommerce technology to open up data warehouse to hand-held devices – Prior models relied on static info about customer transactions – Corporations will shift to sense and respond infrastructure to serve customers better For info-based BI models to function well, integration framework necessary to tie knowledge apps © e-Business Strategies, Wave 5: Business Intelligence: Elements of BI Apps Data Organization & Collection © e-Business Strategies, ail r Em to ec er p os m Pr usto C Web VR U Fa x Analysis & Segmentation Engine Real-time Personalization Engine Telephone Performance Monitoring and Measurement Engine Broadcast, Retrieval, and Interaction Engine e ris rp te En re tu c i te h rc A Data Organization and Collection First requirement of a successful BI strategy Requires visibility into organization’s activities with both internal and external constituencies – data from multiple locations Factors critical to success of large-scale data integration – Scalability – Flexibility – Performance © e-Business Strategies, Analysis and Segmentation These apps offer tools for data mining Goal is to improve pricing, retain customers longer and find new revenue streams – Travelocity Many Internet businesses not have a clue about customer behavior on their Web sites – Collect gigabytes of customer clickstream data every day – For e-business marketing, emphasis on order size and margin Several industries eager to exploit opportunities – Telecom; BC Telecom © e-Business Strategies, Real-Time Personalization Personalization apps emerging – to make businesses responsive to customers’ needs – reduced marginal cost of personalization Personalization apps allow you to – provide each customer with personalized Web page – display only info you want individual customers to see – proactively notify customers of product improvements and relevant upgrades, promotions, and service enhancements – tailor information and recommendations according to each customer’s individual preferences – deliver personally relevant information related to products that the customers own © e-Business Strategies, Infrastructure for Broadcast, Retrieval, and Interaction To proactively deliver info to every customer via medium of their choice – Sabre Multiple devices proliferating Both prefabricated and custom-made software can be integrated into the platform Profiling • Show people what you have to offer • Ask customers what they want Matching • Give people what they want • Match content to customer needs Transacting • Allow people to service themselves • Make it easy to business with you Listen • Incorporate customer feedback • Measure effectiveness © e-Business Strategies, Performance Monitoring and Measurement These apps provide managers the info they need to improve operations and strategy – Use KPIs linked to a balanced scorecard – BT SEM from SAP © e-Business Strategies, BI in Telecom: Combating Customer Churn Churn factor forcing providers to process a steady stream of service starts and stops – most acute in ultracompetitive wireless Churn mgmt to ensure profitable customer stay with company – advanced techniques include ability to predict a given individual’s tendency to select another provider and to define correct course of action to retain the customer © e-Business Strategies, BI in Retails: Capturing and Reporting Sales Data Sears, Roebuck and Co was caught by surprise in 1980s with advent of specialty stores and discount merchandisers – Adopting new technology to support regeneration as a more flexible, market responsive company In early 1990s, tech infrastructure based on old sales information systems – redundant, conflicting, sometimes obsolete data © e-Business Strategies, BI in Retails: Capturing and Reporting Sales Data To survive, forced to embrace BI on a dramatic scale – single data source to capture sales data and generate reports Built Sales Knowledge app – 1.7-terabyte data warehouse – Replaces 18 major databases running on separate systems – Tracks sales by item and location on a daily basis © e-Business Strategies, Technical Elements of BI Framework Three-Layer BI Solutions Architecture SOLUTIONS Relationship Management Billing / Payment Systems ENABLING TECHNOLOGIES CORE TECHNOLOGIES Networking Data Warehousing Scalability Scalability RAS UNIX Security Open Standards Networking RDBMS CORBA / IIOP Advertising / Promotions HTML/XML Messaging Security COM/DCOM/DNA Performance Measurement © e-Business Strategies, OLAP Personalization Data Mining Supply Chain Management Knowledge Management Enabling Technologies: OLAP Provide means to analyze complex data by using a more intuitive set of business rules and dimensions – profitability analysis by product, channel, geography, customer or fiscal period Insulate user from technical aspects of data storage and data structures Core process: data entered into a DB is offloaded, reformatted, or accessed in specialized ways to enhance the processing of complex queries © e-Business Strategies, Core Technologies: Data Warehousing DWs are repositories of summarized historical data, often extracted from disparate departmental or enterprise DBs Companies of all sizes finding that data warehouses are essential to running their businesses – GM Process Lifecycle Partial Functional Solutions Design { Complete Integrated Solutions © e-Business Strategies, Transform Extract Deliver Data Scrubbing Load, Index & Transaction & Cleansing Data Extract Aggregate Publish & Subscribe Meta-Data Histories& Summaries Data Access Tools Data Mining Data Replication Integrated Data Warehouse Applications Roadmap for Managers Identify goals Determine knowledge sources Determine info needs Collect, clean, prepare data Balance external, internal data Develop new approaches to categorizing information Build the data model Deploy model Monitor model 10 Measure ROI © e-Business Strategies, E-Business Strategies, Inc www.ebstrategy.com contact@ebstrategy.com 678-339-1236 x201 Fax - 678-339-9793 ... model Monitor model 10 Measure ROI © e-Business Strategies, E-Business Strategies, Inc www.ebstrategy.com contact@ebstrategy.com 67 8-3 3 9-1 236 x201 Fax - 67 8-3 3 9-9 793 ... data every day – For e-business marketing, emphasis on order size and margin Several industries eager to exploit opportunities – Telecom; BC Telecom © e-Business Strategies, Real-Time Personalization... query-and-response paradigm of decision support on its head © e-Business Strategies, Wave 5: Business Intelligence Next gen BI apps to use ecommerce technology to open up data warehouse to hand-held