The fast pace of today's economy has forced entire companies and organizations to change the way they conduct business. In response to this market imperative, companies have diversified their offer and implemented systems and procedures that allow them to respond in a timely manner to the demand generated by their clients. On the other hand, the multi-million dollar investments that organizations have incurred to improve their offer, as well as the presence of increasing competition in the market, have forced them to more effectively and strictly monitor their operations and the costs associated with these in order to make resources more efficient and obtain a competitive advantage that allows them to stay afloat.This new way of operating requires precise measurements at every point in the value chain.
Background
Currently, in the day-to-day operations of any organization, data is generated as a secondary product of all the transactions that are carried out. Typically, this information is stored through transactional systems in relational databases that fulfill the function of storing and managing these data. But the idea is that these stop being simple data to become information that enriches the decisions of executives.
What is sought is to find information that not only answers questions about what happened or what is happening in the business, but also through this information models are built in which to help predict future events.
The goal is to answer questions like:
- What are the best suppliers or which are our clients that give us the most profit, and how can we attract them more? What are our prospects? What is the ratio of our expenses to our sales?
Currently companies want to exploit and maximize the value of their information with the main idea of having a greater advantage over their competitors. Businesses are moving faster now, so having the right information in the right hands at the right time is essential.
On the other hand, in order to increase profits, companies must focus on retaining their customers as well as looking for ways to acquire new customers. Customer retention is always a very attractive factor for them, although it should be mentioned that something very important and that should not be lost sight of is understanding the profitability of a customer. Well, generally, 20% of customers always give 80% of the profits. Companies must segment their customers by profit and act on the basis of those with the highest profitability. Retaining these customers will provide the company with higher profits. The "Business Intelligence" as such, helps to perform this type of segmentation.
Business Intelligence
Business Intelligence (BI) is a concept that integrates as a solution the storage and processing of huge amounts of data and information to transform it into knowledge and decisions in real time through easy exploitation..
BI also refers to the use of technology to collect and use information effectively in order to improve business operations. An ideal BI system offers employees, partners and senior executives access to the key information they need to carry out their day-to-day tasks, and mainly to be able to make decisions based on correct and accurate data. From its roots in so-called Executive Information Systems (EIS) and Decision Support Systems (DSS), BI has evolved and expanded. transformed into a whole set of technologies capable of satisfying a whole range of users along with their needs in terms of information analysis.
Stages for implementation of BI Applications
But how can businesses create intelligence from their data? In addition, how to provide timely and accurate access to that information for their end users. To understand this we are going to briefly describe the BI process. (See Figure 1). This process is dynamic and iterative. The process begins with questions, and the answers are the result of more questions or subsequent process interactions.
Phase 1 - Direct and Plan:
This phase is the beginning and the end of the process. It is the beginning because it involves writing the specific requirements. And it is the end because it answers questions that lead to new ones. The BI process begins with the users (Executives, Managers, Business Leaders etc.) and here the questions are generated that will help them achieve their objectives. Examples of these questions are: What are the most profitable customers? What is the margin of each product line ?, Etc., These needs are presented by various analysts. This means that these business analysts formulate the requirements of the users and direct a plan for the collection of the information and for the solution of the answers.
Phase 2 - Information Collection:
There are different sources of information within a company. The automation of the processes have created a source of resources such as: Points of sale, ERP, CRM, SFA, Customer Service Applications etc. Different systems create, process, and store different types of information. This is an ongoing process and it is important to understand that the data from these sources is simply information and not Intelligence. Raw data is often incomplete and confusing. Information becomes Intelligent through processing and analyzing it. The information gathering process is when the different sources are analyzed to determine the data necessary to find the answers to the questions.
Phase 3 - Data Processing:
This phase is the integration of raw data into a usable format for analysis. This may be possible by creating a new database, adding data to existing databases, or consolidating information. This phase is generally seen as Extraction, Transformation and Loading that occurs in BI environments.
Phase 4- Analysis and Production:
The business analytics group uses tools and techniques to sort on data and create intelligence. The end result is the production of "intelligent" responses, in their own context. In some cases it is a simple process like creating a report. In other cases, they are creating indicators. Perhaps at this stage, additional requirements are generated as analysts may find new questions that need to be answered.
Phase 5- Dissemination:
This diffusion phase is to deliver smart products to the various clients that require it. This basically implies the use of BI tools for the publication of "dashboards", reports or the possibility of having easy-to-use tools so that the same users have the ability to review the data quickly and easily.
Example of Success Cases
For example we have Wal-Mart an example of success, in which this company has made it possible to develop and maintain consistencies within its corporation, for example they quickly collect and integrate detailed information down to the SKU level. With this type of information, Wal-Mart has benefited on many levels, such as analyzing the performance of a product in specific stores or on specific shelves. With this type of information the corporation has visibility of what type of brands to have in "stock" in a particular region. The information also allows them to analyze the profitability of various products through inventory cycles and margin.
Conclusions
How you can be successful using BI. First, companies need to focus on business alignments, ensuring that BI efforts are aligned with the objectives of the company. Business analysts must ensure that they understand user requirements and further that these requirements are aligned with business objectives as well. They should focus on providing answers to user questions before anything else.
Second, companies need to have a data management strategy. This is necessary in data collection and processing, and helps reduce time and gain more “intelligence”. The companies that are already doing this correctly, already have their raw data from the different databases clean and integrated ready for analysis. This type of infrastructure is of great help for analysis software and Business Intelligence tools.
Business Intelligence now lies in the competence to make decisions, for dynamic approaches to problems and opportunities, and to develop the internal resources and capacities of the organization. Generate strategic changes built with the resources of the organization, to develop a more flexible and dynamic organization, with the support of technologies for decision making and the intervention of business experts.
It is important to understand that decision support tools are just that, tools, and that selection and use simplify many operations and processes in the business, but that decision makers are the cornerstone. Factors that it takes into account, to a greater or lesser degree, such as the speed of change, innovation of new business models, new relationship structures between companies, their clients and partners, the connectivity of people, organizations and countries, and the value of knowledge resident in the company; their knowledge and skills and the use of intelligent systems for decision making, all this integration is called Business Intelligence and it is what generates the competitive advantages between one company and another.
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