Business Intelligence 9 11 08 Cio Breakfast 1
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Transcript of Business Intelligence 9 11 08 Cio Breakfast 1
1
BUSINESS and COMPETITIVE INTELLIGENCE
Paul Gray
CIO Breakfast Round Table
9-11-08
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Aims Of This Talk
To tell you what the shouting is about Help you decide whether business intelligence
is: Simply a new name A repackaging of DSS in a more appealing wrapper The true future of decision support
Examine the ROI from BI and CI Examine the impact of Web 2.0 Examine business considerations
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Definition Of BI Systems
Business intelligence systems combine: Data gathering Data storage and Knowledge management with Analysis
to evaluate complex corporate and competitive information and present the results to planners and decision makers.
Objective: Improve timeliness and quality of the input to the decision process
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Implicit In Definition
Business intelligence systems provide:actionable information and knowledge at the right time in the right location in the right form
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BI Relation to Other Software
Data Mining
DSS/ EIS
Business Intelligence
Data Warehouse
KnowledgeManagement
CRM/dB Marketing
Web 2.0
GIS
OLAP
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What BI does
Strategic use Corporate performance management Optimizing customer relations Packaged standalone BI applications Management reporting of BI/CI data
Tasks Creating forecasts and estimates of future
direction “What if” analysis of alternative scenarios. Ad hoc access to answer non-routine questions. Strategic insight
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Implications
Ordinary reports of a firm’s performance and competitor performance (what BI software gives) is not enough. Need analysis to put it in context
For too many firms, BI (like DSS and EIS before them) is still inward looking and is used only by a small subset of people
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BI Application
Company that sells natural gas to homes builds dashboard to support
Operational performance metric measurementReal time decision making
Result: No. of repeat repair calls reduced saving $1.3 million
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Return on Investment
CostsUpfront cost and upkeep are high
($200/seat for Cognos) Cost efficiencies in IT can be forecast but
not in BI or CIBenefits
Cost reductions don’t pay costGet new opportunities, discover problems,
and avoid difficulties
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Return on Investment
Costs include:
Additional hardware
Large amt. of software
Purchased external data
A dependent data mart for BI
Analysts and support staff
Hardware, software update
and maintenance
User time thinking about BI outputs
Benefits mostly soft;
include:Hope for ‘big bang’ returns
in the future (but can’t forecast them or their timing)
Better understanding of the business and the competitor’s business
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Change: BI for the Masses
BI tools are moving to the whole mass of knowledge workers, not just few specialists
A way of closing gap between analysis and operations, moving to multiple levels in the organization
Previously, typical analyst use is ‘one-off’ study
Large deployments of BI include 70,000 at French Telecom, 50,000 at US Military health systems. Other examples at 20,000 users
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Web 2.0 Example:5 Bashups
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Web 2.0 Example: GIS,BI
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WEB 2.0 IMPLICATIONS
Does not require much end-user skills(<20% of users in most orgs. Use reporting, ad
hoc query, and online analytic processing) Web 2.0 results in intuitive interface, better
data mgmt. and access Get “bashups” in std. format from variety of
sources. Brings together, e.g., GIS, on-demand BI,
external sources (e.g., Web) Lets businesses see value in analytics
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WEB 2.0 EXAMPLE
Mass. Housing Finance Agency Mapping capabilitiesExternal MapInfo SoftwareCognos DashboardNow used by 300 , not just 12 analystsFuture: show housing units, loan data,
public transportation visually on one screenIn insurance: link claims and wellness
data to allow employers to evaluate ROI of different programs and benefits
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CHALLENGES
Data quality (governance, master data management, performance indicators)
Agreeing on common data definitions, meaning of performance indicators
Having right infrastructure in placedIn some firms, IT’s relies on ‘name’
vendors (SAP, Salesforce.com), not small startups in BI space
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WEB 2.0 BI AND THE CIO
Put more capabilities in user hands. Make IT enabling infrastructure
IT should allow users to get data without programming “IT should get out of developing interfaces and become
involved in data quality and data integration IT should not fight emerging BI technologies to enforce
standards –Schlegel, Gartner group. Should put them into the BI architecture to avoid rogue BI capabilities
Use a self-service BI strategy to reduce cost, speed delivery
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Competitive Intelligence
“No more sinister than keeping your eye on the other guy, albeit secretly” –Claudia Imhoff
More formal definition by Society of Competitive Intelligence Professionals (SCIP)
“CI is a systematic and ethical program for gathering, analyzing, and managing external information that can affect your company’s plans, decision and operations”
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Definition Of CI In Practice
CI ensuring marketplace competitiveness
Through understanding:
-competitors
- over-all competitive environment--------
Can use whatever you find in the public domain to make sure you’re not surprised by your competitors.
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Examples Of CI
Comshare bought a competitor after monitoring the competitor’s hometown newspaper
Texas Instrument made $100m acquisition by figuring out competition’s potential bids
Merck developed counter-strategy about competitor’s upcoming product, saving $200M
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Sources of CI
Government informationOnline databasesInterviews and surveysSpecial interest meetings such as SIMCompetitors, suppliers, distributors,
customersMedia (newspapers, journals, wire
services, financial reports, speeches by executives bragging about their firm)
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Competitive Intelligence Tools
Simulations to test ‘what if’ conditionsData mining about competitor & firmTrack patents to assess competitor
technologiesScan public record, Internet, press
release, mass media Talk with customers, suppliers,
partners, industry experts, sales people
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Notes on CI
Problem is not lack of information but too much information
Once you start CI, you try to find ways to make task of finding out about you more difficult.
Get CI, CCI, CCCI, … CnISame game is played in politics, int’l
competition
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BI Market
Market size (IDC) $6.3 billion (2006)
Trend in pre-built analytic applications because home-built systems take too long (>6 mos.) and cost too much ($2-3 million)
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VENDORS-Gartner 2008
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Managerial Issues
Is BI an oxymoron?BI is really about understanding your own
position, your customer, your competitorAn important part of planning and
operations CI is a way of finding out about your
market position
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Managerial Issues
What do I know once I deploy BI?Capabilities available in firmState of the art, trends and directions in the
marketsThe technologies and regulatory
environment Competitor actions and their implications
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Managerial Issues
What capabilities do investments in BI create?Complex corporate and competitive
information for planners and decision makers
Improved timeliness and quality of input to the decision process
(Occasionally) major breakthrough
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Managerial Issues
How do you gather, transfer BI?BI a form of knowledge; includes both
explicit and tacit knowledgeSome knowledge bought (scanner
data), other created internally from analysis of public and private data
Must disseminate to many people in firm; customize by individual, group
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Managerial Issues
Organization for BI?Not necessarily; both centralized and
decentralized org. work What technologies are available?
Specialized software packages, many still quite crude
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CONCLUSIONS
Business Intelligence is a part of DSS but certainly not all of it.
BI name gives DSS a new skin. Semantics matter
The technology for BI and CI is getting better, broader, and more universally available. Web 2.0 is coming
The capabilities of the DSS analyst in business improve as both structured and unstructured data grows
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CONCLUSIONS
BI and CI are steps along the way. They are the short-term future of DSS in the commercial world.
In the long term, we will inevitably find new ways of thinking about and solving decision problems.