BUSINESS INTELLIGENCE
A Lane to Success
Introduction
In today’s world many companies work hard and use different technologies to generate business intelligence. The solutions of the business intelligence have the ability to carry out analysis to get real business value at the exact time. The purpose of the report is to give clear business benefits and costs to attract clients to the company’s consulting service. It will ultimately help to increase its revenue, reduce costs and ultimately deliver greater profits.
1. Business Intelligence
Definition
Business Intelligence (BI) is the process of taking better decisions on the basis of various information collected through different data, processes and methodologies. It also provides the main key points that the organisation needs.
1.1 Business Intelligence in Data Warehouse
The electronic storehouse of data is the data warehouse. When the data is stored in database system for business intelligence applications, it must be revived and managed. These systems are called as data warehouses. Data warehouse is one of the sources of data handled by business intelligence system and also it is the organisations need to get consistent, consolidated and distinctive clear data at different levels of accumulation. It also comprises business intelligence tools to take out, convert and load up the data into the storehouse. For achieving the business intelligence, data warehousing is the backend. Data warehousing is information and the knowledge which we acquire from information is Business Intelligence.
1.2 Business Intelligence in Decision Making in an Organisation
In decision making it’s very important to acquire business intelligence. Thus BI system is also called as Decision Support System (DSS). It provides foundations for effective business activities like positive decision making, enhancing the profits, optimising business processes and resources. Business intelligence makes taking good decisions at all levels. There are three types of decision making supported by business intelligence. Each of those types of decision can be defined by the type of data needed to bear them.
BI is the analysis of data and presentation layer that lies between the data warehouse and the decision-making.
2. Benefits of business intelligence
- It increases the measurable productivity. The good business intelligence saves the people effort and reduces time delay. Also it makes proper decisions. So the productivity increases.
- It enhances the demand and makes extension to the system.
- It analyses the waste resources and reduces the cost.
- It identifies the changes in customer buying patterns, supply chain activity and financial arrangements in the early stage.
- It provides the accurate data to all levels of the organisation.
- It makes an approach to data and information to make use within the ethical and legal boundaries.
- It reduces the risk through consistent reporting and improved security.
- It increases agility. For the organisation to react more quickly to changes in it’s environment more informed decisions makes it possible faster.
2.1 Use of business intelligence and purpose
Many companies use business intelligence to face the tough situations. It is used by the top level management person. They use wide varieties of technologies to create BI. Those companies fully benefit from the use of BI and achieve business benefits and gain an importance over their competitors. For example, a telecommunication company maintains a decision support data warehouse and uses analytic and data mining tools. It makes the user to access data from thousands of critical records. These tools sets margin by creating data cubes around the data that is accessed by group of users.
3. Challenges of business intelligence implementation faced by companies
Business intelligence has made a blow on organisations all over the world. The business success with BI is accomplished through fast, easy access to actionable information. This is achieved through timely and accurate insight into customers and business conditions.
Implementing BI in a company brings many problems.
Complexity
Business analysis and appealing the end users becomes critical. BI tool exposes the useless data visible. So the company should improve the business processes to clean those data.
Security
BI project comes across the security issues. If there is a robust BI platform then security is not a big issue. In order to avoid or reduce this issue, the BI tool should have row level security infrastructure.
Data confidence
Since the decision making is done using BI, there occurs the problem of data trust and data quality by the users. This can be addressed by educating the users on data entry. BI tool should highlight the poor data quality and patch up it at the source.
Change
BI creates a great change in organisation. Because of this people fear for accommodating to new changes and also whether it gives more work for them. This change management can be cleared by giving proper counselling for the users.
4. Industry case study – Insurance
The industrial case study here deals with comparing the issues, benefits and challenges of two companies named Dodo insurance which doesn’t use BI and Phoenix insurance which uses BI.
4.1 Dodo Insurance
Background
Dodo insurance is a Canadian company which is developed in volume and variety of business handled. There were five assistant general managers, and a deputy general manager who reports to the general manager. The company uses Policy Management System (PMS) to build networked systems. The PMS generates a monthly reporting system which reveals the bring upon expenses, revenues and profits.
4.1.1 Issues in Dodo insurance
- The scope of the system is to develop the corporate image and to improve the competitive advantage by implementing computer systems.
- The computer systems help the branch managers to run their branches autonomously by understanding the operations of their business.
- There is a limited online access to management information held on the PMS.
- There occurs the frequent breakdown of the systems.
- The company develops a new communicating channel, electronic mail system to improve the use of staff time.
4.1.2 Challenges faced by Dodo without implementing BI
- The monthly reports are sent to branches in various computer printouts. The branch manager finds it hard to retrieve all the data required from database. To do this they need Easytrieve which is complicated to use and requires technically skilled users.
- Head office staff feels that the implications of the changes in corporate culture is not understandable and acceptable.
- The approach to the new technology shifts from neutral to negative phase.
- It is hard to understand the machine language. It requires code book to infer the real meaning of information.
- They don’t know the importance of electronic mail. Improve the version of e-mail system to restore confidence.
- The limited use of the email system and the variance between branch activities and capabilities of email makes the lack of contact between branch employees and head office based systems staff.
- They need the new improved version of PMS to get to the systems and communications for ad hoc reports.
In this Dodo insurance, it needs the improved PMS database version. If BI is implemented then it provides ad hoc access to a single piece of data, such as monthly sales figures and proper decision making.
4.2 Phoenix insurance
Background
Phoenix is the largest life insurance company in America. It has more than 30 million customers in 30 countries. It has more than $1 trillion of life insurance coverage including the total consolidated assets of $279.4 billion. The cash reserve of the company is balanced by the rock-solid reputation and makes it profitable while paying customer claims.
4.2.1 Issues
The main issue is Phoenix needs to rearrange its IT practices according to corporate restructuring and a new stress on customer relationship management (CRM). It also plans to perform its entire sales channel reporting through DB2 data warehouse.
4.2.2 Benefits and challenges of implementing BI
- It speeds up the cash reserve calculations by using DB2 data warehouse running on an IBM RS/6000 SP massively parallel processing server.
- It reduces the time required to perform more than six billion reserved calculations from 35 days to 5 days thus saving more than $4 million.
- Data warehouse is a great success in reducing the time required to perform the cash reserve calculations by involving only fewer people in the process.
- Data warehouse puts forecasting power in the hands of Phoenix’s actuaries, enabling them to perform various ‘what if’ analysis to estimate the feasibility of new insurance products.
- DB2 is used to understand the customers in the context of contacts that the company have with them.
- The query performance of customer and sales tracking data warehouse exceeds ten times that of the legacy systems.
- DB2 data warehouse enables to bring together a business relationship strategy for Phoenix’s entire retail customer base.
- Since DB2 data warehouse is used, the users can get their answers within few seconds or hours. It develops a good customer relation management.
- Phoenix influences its DB2 for AIX platform and developed a unique federated data warehouse, which is a cost efficient approach that includes the development of independent data marts.
The DB2 data warehouse is a key element in supporting customer relationship management. It gives the users to access the information that they need to make the decisions fast and easy.
Conclusion
In the light of this, it is recommended that the company which makes proper decisions and the ability to insight their data and information has the competitive advantage. BI has the ability to change the whole business environment. More business owners understand the importance of BI as the key factor to achieve success in their business.
References
http://www.computerworld.com/s/article/47371/Business_Intelligence
http://www.1keydata.com/datawarehousing/datawarehouse.html
http://smallbiztechnology.com/archive/2009/11/why-smart-companies-get-smarte.html
http://www.theserverside.com/discussions/thread.tss?thread_id=48599
http://www.oranz.co.uk/pdf_files/10MinuteTour.pdf
http://www.reportlinker.com/p0165373/Global-Business-Intelligence-Software-Market-in-Telecom-Industry-2008-2012.html?request=news