Use a bottom-up approach
Considering that there are more than a million customers and huge
transactions, Id assume this manufacturing company has a few core
systems (ERP, CRM, Accounting, Sales, HR, etc) and some basic
integration between them. The company would need to make sense of
the data, analyse trends, etc. So, there is a need for BI or the benefits of
BI. But the main question is how does Parekh go about it?
He must look at what BI provides in tangible terms so that he can define
its tangible benefits? He should align with the business rather than get
into technology nuances aboutwhich BI to use, how it can integrate with
different systems, ensure data quality and the like.
Some tangible problems Vijay needs to conceptualise could be:
What are the top 10 complaints from his customers? Do they see
any support trend/ concerns related to support; how volatile are
these concerns?
What is the relationship between customer type, revenue,
purchased items, customer complaints and profit?
How good/ bad is the quality of forecasting between different
geographies; how is it impacting the business?
What are the top 10 dashboard items that his management needs
for running/governing the business?
Parekh must start interacting with his peers in other functions and his
management to identify/define high priority items. Once thats done,
the rest automatically falls in place. A bottom-up approach works
well addressing the most important pain point of one or two areas
(or departments) first, rather than taking an enterprise-wide big-bang
approach. This will prove the BI approach, and buy in other departments
into using BI, etc.
Suggested course of action:
Define the kind of insights and reports required
Define how the insights would be used (eg. If there are frequent
items in the customer purchase behaviour, how will you use this
information -- does it reflect in the manufacturing schedule/ in
sales recommendations for cross selling, etc.?)
Map the BI model for the enterprise (but be clear about the
priorities) so that he can visualise a framework
Build a datamart / small scale BI for the top priority item
and roll it out as quickly as possible; check the usage, how it
impactsbusiness, adoption, etc. Since this is the first project for BI,
he should try some open source/low cost BI tool. This will reduce
the timeframe required to investigate multiple tools or need of
high budget justification. Even if the tool selection goes wrong
in the first project, it is perfectly alright. Parekh's team will learn
the nuances of building a BI solution. It will also pave the way for
defining investment needs and imbibe new learnings.
K N Swaminathan, GM-IT, TVS Motors
BI identifies unknown opportunities
BI is certainly a gift horse and not a white elephant. The implementation
of BI is a gargantuan task. The stakes are also high. However,
thankfully, it is not a showstopper like an ERP implementation.
Parekh need not select only one BI solution as the needs in the company
may vary. Its ideal to start with sales, manufacturing and procurement
as all these deal in numbers. Most of the source data for these functions
are available in the transaction systems. ROI would also be easier to
calculate, as there would be direct co-relation between the solution
deployed and the benefits reaped.
Parekh can collect various spreadsheets used by these functions and
prepare a list of requirements. He can also check with the functional
heads what crucial information they now miss and how it will add value
to their business.
Parekh must consider other systems that must be integrated to the BI
solution. The solution must have the necessary adaptors to push and
pull data from the source / target systems. It should also support rapid
deployment. Since the transactions are huge, Parekh must use a solution
which supports in-memory computing.
Since mainly persons at the senior level use BI solutions, it must be easy
to operate and look user friendly.
He must then prepare a master template listing all these requirements
under the various categories such as inter-operability, look and feel,
functionality required, etc. He can then rate each BI solutions capability
against each requirement in the master template. The solution that meets
critical requirements is what he must select. Cost is also an important
criterion.
BI tools have excellent visualisation capabilities that can throw patterns
on underlying information not known to us. This is BIs greatest
benefit. It identifies unknown opportunities, which can bring in business
benefits.
When collecting requirements from respective functions, Parekh can
establish base metrics on current performance levels. He can also
identify areas of losses or waste which he can reduce using the BI tool.
The ROI is the performance improvement / reduction in waste and
losses.
Dr Muthukumaran, IT Professional & Consultant
Define BI strategy first
The speed at which business moves today, combined with the sheer
volume of data created by the digitised world, requires new approaches
to derive value from data, where value is the ratio between benefits
gained compared to effort required. This is where BI comes in. It
is essential for Parekh to understand his needs before deciding on a
solution framework. A good starting point is to define a BI strategy
compliant with the overall business strategy and requirements. Parekh
should then map the strategy for instant analysis requirements and
passive analysis of his user base. While BI tools provide a rear-view
mirror into business performance, the emergence of big data analytics
provides a forward-looking view, so organisations can anticipate and
execute on opportunities of the future. IN-Memory technology helps BI
tools deliver quick reports. The alternative big data landscape allows for
data analysis on large distributed datasets, so BI applications can scale
up to very high volumes of heterogeneous data.
Parekh must understand that justifying the value of BI solutions is
uniquely difficult, due to lack of straightforward, immediate ROI
equations. It is imperative to understand and simplify them to map the
value creation process and evaluate the ROI.
An investment in BI tools creates an asset that can generate incremental
after-tax cash flow. Usually, BI tools are used to improve customer
segmentation, customer acquisition, and customer retention to start with.
Such segmentations are mapped to bring down customer acquisition
costs, leading to increased revenue, better customer lifetime value etc.
Shankar Krishnamoorthy, Co-founder & CTO, Aspire Systems India (P) Ltd
Use a bottom-up approach
Considering that there are more than a million customers and hugetransactions, Id assume this manufacturing company has a few coresystems (ERP, CRM, Accounting, Sales, HR, etc) and some basicintegration between them. The company would need to make sense ofthe data, analyse trends, etc. So, there is a need for BI or the benefits ofBI. But the main question is how does Parekh go about it?He must look at what BI provides in tangible terms so that he can defineits tangible benefits? He should align with the business rather than getinto technology nuances aboutwhich BI to use, how it can integrate withdifferent systems, ensure data quality and the like.
Some tangible problems Vijay needs to conceptualise could be:
What are the top 10 complaints from his customers? Do they seeany support trend/ concerns related to support; how volatile arethese concerns?
What is the relationship between customer type, revenue,purchased items, customer complaints and profit?
How good/ bad is the quality of forecasting between differentgeographies; how is it impacting the business?
What are the top 10 dashboard items that his management needsfor running/governing the business?
Parekh must start interacting with his peers in other functions and hismanagement to identify/define high priority items. Once thats done,the rest automatically falls in place. A bottom-up approach workswell addressing the most important pain point of one or two areas(or departments) first, rather than taking an enterprise-wide big-bangapproach. This will prove the BI approach, and buy in other departmentsinto using BI, etc.
Suggested course of action:
Define the kind of insights and reports required
Define how the insights would be used (eg. If there are frequentitems in the customer purchase behaviour, how will you use thisinformation -- does it reflect in the manufacturing schedule/ insales recommendations for cross selling, etc.?)
Map the BI model for the enterprise (but be clear about thepriorities) so that he can visualise a framework
Build a datamart / small scale BI for the top priority itemand roll it out as quickly as possible; check the usage, how itimpactsbusiness, adoption, etc. Since this is the first project for BI,he should try some open source/low cost BI tool. This will reducethe timeframe required to investigate multiple tools or need ofhigh budget justification. Even if the tool selection goes wrongin the first project, it is perfectly alright. Parekh's team will learnthe nuances of building a BI solution. It will also pave the way fordefining investment needs and imbibe new learnings.
K N Swaminathan, GM-IT, TVS Motors
BI identifies unknown opportunities
BI is certainly a gift horse and not a white elephant. The implementationof BI is a gargantuan task. The stakes are also high. However,thankfully, it is not a showstopper like an ERP implementation.Parekh need not select only one BI solution as the needs in the companymay vary. Its ideal to start with sales, manufacturing and procurementas all these deal in numbers. Most of the source data for these functionsare available in the transaction systems. ROI would also be easier tocalculate, as there would be direct co-relation between the solutiondeployed and the benefits reaped.Parekh can collect various spreadsheets used by these functions andprepare a list of requirements. He can also check with the functionalheads what crucial information they now miss and how it will add valueto their business.Parekh must consider other systems that must be integrated to the BIsolution. The solution must have the necessary adaptors to push andpull data from the source / target systems. It should also support rapiddeployment. Since the transactions are huge, Parekh must use a solutionwhich supports in-memory computing.Since mainly persons at the senior level use BI solutions, it must be easyto operate and look user friendly.He must then prepare a master template listing all these requirementsunder the various categories such as inter-operability, look and feel,functionality required, etc. He can then rate each BI solutions capabilityagainst each requirement in the master template. The solution that meetscritical requirements is what he must select. Cost is also an importantcriterion.
BI tools have excellent visualisation capabilities that can throw patternson underlying information not known to us. This is BIs greatestbenefit. It identifies unknown opportunities, which can bring in businessbenefits.When collecting requirements from respective functions, Parekh canestablish base metrics on current performance levels. He can alsoidentify areas of losses or waste which he can reduce using the BI tool.The ROI is the performance improvement / reduction in waste andlosses.
Dr Muthukumaran, IT Professional & Consultant
Define BI strategy first
The speed at which business moves today, combined with the sheervolume of data created by the digitised world, requires new approachesto derive value from data, where value is the ratio between benefitsgained compared to effort required. This is where BI comes in. Itis essential for Parekh to understand his needs before deciding on asolution framework. A good starting point is to define a BI strategycompliant with the overall business strategy and requirements. Parekhshould then map the strategy for instant analysis requirements andpassive analysis of his user base. While BI tools provide a rear-viewmirror into business performance, the emergence of big data analyticsprovides a forward-looking view, so organisations can anticipate andexecute on opportunities of the future. IN-Memory technology helps BItools deliver quick reports. The alternative big data landscape allows fordata analysis on large distributed datasets, so BI applications can scaleup to very high volumes of heterogeneous data.
Parekh must understand that justifying the value of BI solutions isuniquely difficult, due to lack of straightforward, immediate ROIequations. It is imperative to understand and simplify them to map thevalue creation process and evaluate the ROI.An investment in BI tools creates an asset that can generate incrementalafter-tax cash flow. Usually, BI tools are used to improve customersegmentation, customer acquisition, and customer retention to start with.Such segmentations are mapped to bring down customer acquisitioncosts, leading to increased revenue, better customer lifetime value etc.
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