A Healthy Approach to BIBy Samuel Greengard | Posted 2011-07-28 Email Print
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Enterprises are adopting sophisticated business intelligence and analytics technologies and strategies to manage the enormous waves of data they receive and to establish a competitive advantage.
A Healthy Approach to BI
To maximize results from BI and BA, technology and business managers must understand how to assemble the right combination of tools. Today’s BI systems incorporate a wide variety of capabilities, including querying and reporting, data mining and online analytical processing (OLAP).
BA systems, on the other hand, increasingly tackle complex simulations, risk analysis, predictive modeling and more. They use sophisticated algorithms and complex event-processing features to provide insights in near or real time.
These tools also cull data from a growing number of sources, including ERP and CRM applications, human resources programs, GIS systems, warranty databases, financial ledgers and R&D documents. In addition, some organizations plug in audio, video and other unstructured data, while others add outside data from social networks. The common denominator, Tata’s Mhashilkar says, is that human decision making remains the key to transforming information into actionable strategies.
Moving beyond spreadsheets and connecting a variety of data types creates both challenges and opportunities. At Schumacher Group, a provider of outsourced emergency room physician-management services, getting a handle on budgeting and resource planning is at the heart of the business.
The organization works with more than 2,500 clinical providers at about 200 U.S. hospitals. “We realized that we had to get off paper-based solutions and aggregate data in an electronic form,” says CIO Douglas Menefee.
The company adopted a software-as-a-service (SaaS) model that taps into Microsoft ProClarity ad hoc reporting. The BI system, which provides Web-based dashboards, uses SharePoint to connect users from 20 states. It aggregates data from nine different source systems, including a scheduling application, a demographic database and a CRM system.
All the data gets pulled into an enterprise data warehouse and, from there, it’s available on a real-time basis. Among other things, previously siloed finance departments can collaborate on budgeting, while physicians can view performance scorecards.
Such consolidated reporting and BI functionality has knocked the time required to complete monthly budgeting tasks from an average of 12 hours to about 45 minutes. It has also improved accuracy.
“With a 360-degree view, we’re able to spot gaps immediately, and we can understand budgeting and revenue in a way that wasn’t previously possible,” Menefee says. “We are far more aligned with our objectives.”
Ringing in a New Era of Analytics
Retailers, too, are finding ways to leverage BI and BA for bottom-line gains. Helzberg Diamond Shops, which operates about 235 jewelry stores in malls throughout the United States, is working to ramp up the information available to store managers.
Using a BI dashboard built by Information Builders, managers can examine product-category sales, margins and inventory levels. They can also identify trends in promotions and other store-specific information, including individual associate performance, credit sales and extended-care plan usage.
The company moved to the Web FOCUS platform about 18 months ago. It is the latest iteration in an enterprise data-warehousing strategy dating back to 1998. Managers and regional managers can log into their dashboards, view performance metrics and export the data to Excel spreadsheets or Active HTML.
“It’s easy to drill through data and spot patterns and trends that otherwise wouldn’t be detected,” says Greg Backhus, director of data warehousing for Helzberg.
What companies discover once they dive into BI and BA, PwC’s Patton says, is that every customer interaction offers potential value. “It’s possible to look at past purchasing history, predispositions, psychographics, demographic analysis and population densities,” he explains.
“Organizations are able to use statistical, analytic and predictive models to better understand business conditions and react in a more agile and flexible way. They can refine products and services to better meet the needs of their clients.”
That’s certainly the situation at TrueCar, a leading Web-based provider of new car pricing. “It’s our goal to offer the most accurate car-pricing data available,” states Mike Swinson, vice president of analytics. “It’s essential for potential buyers to know what others in their geographic area paid for the same automobile.”
In order to provide the most accurate data possible, TrueCar gleans data from a variety of sources, including automobile registration data, DMV and public records, dealers and other sources. But TrueCar doesn’t stop there. It also serves up projections for likely price changes over the coming weeks.
TrueCar uses SAS analytics and forecasting software to improve marketing campaigns and industry sales forecasts, as well as to obtain reports on pricing and trends. The software, which provides a dashboard, slices through a rolling set of 3 million transactions for as many as 10 data sources each week.
Among other things, the system strips out personal identifying information. It also uses a scoring algorithm to rate dealers based on the best haggle-free pricing.
In addition, the software incorporates Web analytics, which includes purchasing patterns and click preferences. That makes it easier for TrueCar to understand shifts in preferences.
“All the information winds up being housed in our analytics and business intelligence platform,” Swinson says. “All told, the BI and BA initiative has helped TrueCar reduce its cost per click by 50 percent, while also boosting revenue threefold.”