Last week I was presenting business analytics framework to a large audience at one of the partner organizations. There were a lot of questions around business analytics and business intelligence reporting. I think there is lot of confusion between business intelligence & business analytics. I would like to address some basic questions about business analytics in this blog.
What is difference between Business Intelligence(BI) & Business Analytics(BA)?
Business Intelligence word was first coined decades ago. Business intelligence converts data into information. It includes query & reporting, OLAP, interactive dashboards and alerts. It's about analysis on past events, and more reactive in nature. It helps you address the following questions
1. What happened?
2. How many, how often, where?
3. Where exactly is the problem?
4. What actions are needed?
This is a first step towards creating intelligent enterprise.Today, there are many big organizations who are struggling to establish enterprise wide business intelligence reporting platform. It's not enough to compete using BI in today's economic scenario. You need much more than BI to create differentiation against your competitors in today's market place.
Business Analytics converts information into knowledge.It's about predicting future using past data and current events. It's more proactive in nature. It helps you address the following questions
1. Why is this happening?
2. What if these trends continues?
3. What will happen next?
4. What's the best that can happen?
Business analytics can directly impact top & bottom lines. It helps you to
1. Identify segment of people who are more likely to buy your product
2. Identify the best offer among the list of potential offers
3. Identify potential customers who can buy more products and services from you
4. Retain most profitable customers
5. Optimize resources based on various contraints
None of the above is possible using business intelligence tools. All of the above requires usage of statistical algorithms and processes.
BI will give you information like number of stock outs in a store where as BA will give you knowledge like optimal quantity of stock that you need to keep in your store to prevent stock out situations and minimize inventory cost. BI will give information like amount of withdrawals and cash out instances of a particular ATM where as BA will give you knowledge like optimal amount of cash that you need to keep in your ATM based on location, and withdrawal patterns so that you prevent cash out situations and minimize cost. There are several such examples available.
Do you need a Data warehouse to implement Business Analytics framework?
No. It's not necessary to source data from data warehouse for business analytics. You can apply business analytics techniques on data which is directly extracted from source system. You do not have to wait till your data warehouse is implemented as it usually takes anywhere from 12 - 24 months. One of pre-requistite for business analytics is availability of good quality data. It's doesn't matter where it comes from.
How much data do you need to perform Business Analytics?
It's depends on type of analytics that you want to perform. Typically, business analytics techniques requires data from last 3 to 36 months. As mentioned earlier, you need to have good quality data to derive effective results out of business analytics techniques.
According to me business intelligence is a subset of business analytics framework. You must have strategy in place to implement business analytics framework to compete in today's economics conditions. Business Intelligence is just not enough. Be aware of vendors who supply query & reporting tools in name of "Analytics".
You can find more info about business analytics @
http://www.sas.com/businessanalytics/
Showing posts with label Business Intelligence. Show all posts
Showing posts with label Business Intelligence. Show all posts
Monday, March 1, 2010
Monday, August 24, 2009
BI as Business Enabler
I have started my sales/pre-sales journey with SAS about 3 1/2 year ago. My job is 100% customer facing. I have seen quite a few changes, in a way, people have started adopting business intelligence technology in past few years.
My first assignment at SAS was that of data quality. At that point in time there was not much awareness about data quality solutions in Indian market. It took almost a year to convince customer to invest in data quality solution. There were very few data quality solutions available in Indian market at that time. Today, when I look in market, there are plenty of data quality software vendors. Data quality has become integral part of data governance & compliance strategy for most of the organizations. We have worked on more than 5 enterprise data warehouse RFPs in last 3 months. All of them had included requirements for data quality. Data quality is not only used for basic data cleansing but it is also used for doing de-dup, house hold analysis and cross sell/up sell.
One of the major banks is using data quality to ensure that they give loan to right people and thereby ensuring low NPAs. One of the CPG company is using data quality to create single view of retail outlets across various product categories. This helps them in optimizing sales force & increasing cross sell/Up Sell opportunities within same outlet for different products. One of the manufacturing company is using data quality to create single view of customer across various business functions. This helps them to cross sell/up sell products across various business functions.
I have also seen enormous change in a way people are using business intelligence, now compared with what it was, four years ago. Earlier BI was used by very few people in organization. That's the reason some BI vendors are offering per-user licensing. Today BI reporting access is given to all users at all levels for decision making. User based licensing makes no sense in today's environment. Most of the organizations are now moving towards establishing enterprise-wide reporting framework. They are also standardizing on their reporting platform across various departments. Need for reporting user interface is also changing from one user group to another user group. Customers are expecting different user interfaces for users having different skill sets. There are some users , who are more comfortable with excel, requires excel interface. There are some users, who are more comfortable with web interface, requires web interface for reports. Earlier, reports used to get refreshed every month or week. Today customers are expecting to refresh reports multiple times in a day or atleast once in a day. In past few months I have seen several requirements for real time dashboarding & OLAP analysis.
One of the large private limited bank is using real time dashboards to monitor cash level & down time of each ATM. BI system sends out an alert to respective regional manager when cash drops below certain level or ATM is down for long period. This has reduced cash out situations drastically across all ATMs in country. One of the large manufacturing company is using BI reporting to measure supplier performance. They monitor quality and quantity of s upply of each supplier using this system. They also compare pricing from different supplier for thesame material and quantity. They use this information to better neogotiate material pricing with their suppliers. One of the retailer is using real time dashboard to monitor their fast moving items at store level and thereby reducing stock out situations.
Today customers are considering BI as a business enabler. Their expectations from BI systems have increased in last few years. They are looking for BI solutions which offer capabilities beyond Querying and reporting. They are looking for solutions which can help them forecast, predict and optimize. Lots of companies have started mentioning about data warehouse initiative as a strategic initiative in their annual reports. They believe that the implementation of the BI system will help them increase their sales and profitability. This represents a large opportunity for BI vendors. Hence we are seeing lots of consolidation in BI market.
My first assignment at SAS was that of data quality. At that point in time there was not much awareness about data quality solutions in Indian market. It took almost a year to convince customer to invest in data quality solution. There were very few data quality solutions available in Indian market at that time. Today, when I look in market, there are plenty of data quality software vendors. Data quality has become integral part of data governance & compliance strategy for most of the organizations. We have worked on more than 5 enterprise data warehouse RFPs in last 3 months. All of them had included requirements for data quality. Data quality is not only used for basic data cleansing but it is also used for doing de-dup, house hold analysis and cross sell/up sell.
One of the major banks is using data quality to ensure that they give loan to right people and thereby ensuring low NPAs. One of the CPG company is using data quality to create single view of retail outlets across various product categories. This helps them in optimizing sales force & increasing cross sell/Up Sell opportunities within same outlet for different products. One of the manufacturing company is using data quality to create single view of customer across various business functions. This helps them to cross sell/up sell products across various business functions.
I have also seen enormous change in a way people are using business intelligence, now compared with what it was, four years ago. Earlier BI was used by very few people in organization. That's the reason some BI vendors are offering per-user licensing. Today BI reporting access is given to all users at all levels for decision making. User based licensing makes no sense in today's environment. Most of the organizations are now moving towards establishing enterprise-wide reporting framework. They are also standardizing on their reporting platform across various departments. Need for reporting user interface is also changing from one user group to another user group. Customers are expecting different user interfaces for users having different skill sets. There are some users , who are more comfortable with excel, requires excel interface. There are some users, who are more comfortable with web interface, requires web interface for reports. Earlier, reports used to get refreshed every month or week. Today customers are expecting to refresh reports multiple times in a day or atleast once in a day. In past few months I have seen several requirements for real time dashboarding & OLAP analysis.
One of the large private limited bank is using real time dashboards to monitor cash level & down time of each ATM. BI system sends out an alert to respective regional manager when cash drops below certain level or ATM is down for long period. This has reduced cash out situations drastically across all ATMs in country. One of the large manufacturing company is using BI reporting to measure supplier performance. They monitor quality and quantity of s upply of each supplier using this system. They also compare pricing from different supplier for thesame material and quantity. They use this information to better neogotiate material pricing with their suppliers. One of the retailer is using real time dashboard to monitor their fast moving items at store level and thereby reducing stock out situations.
Today customers are considering BI as a business enabler. Their expectations from BI systems have increased in last few years. They are looking for BI solutions which offer capabilities beyond Querying and reporting. They are looking for solutions which can help them forecast, predict and optimize. Lots of companies have started mentioning about data warehouse initiative as a strategic initiative in their annual reports. They believe that the implementation of the BI system will help them increase their sales and profitability. This represents a large opportunity for BI vendors. Hence we are seeing lots of consolidation in BI market.
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