Month: December 2016

Business Intelligence: Corporate Planning

Corporate Planning

The main difference between business planning and corporate planning is the actors.  They both are defining strategies that will help the meet the business goals and objectives.  However, business planning is describing how the business will do it, through focusing on business operations, marketing, and products and services (Smith, n.d).  Meanwhile, corporate planning is describing how the employees will do it, through focusing on staff responsibilities and procedures (Smith, n.d.).  Smith (n.d.) implied that corporate planning will succeed if it is aligned with the company’s strategy and missions, drawing on the strengths and improving on its weaknesses. A successful and realistic corporate and business plan can help the company succeed.  Business Intelligence can help in creating these plans.  In order to make the right plans, we must make better decisions that help the company out, and data-driven decisions (through Business Intelligence).  Business Intelligence, will help provide answers to questions much faster and quite easily, make better use of the corporate time, and finally aid in making improvements for the future (Carter, Farmer, & Siegel, 2014).

A small, medium, or large organization deals with planning differently, so BI solutions are not a one-size-fits-all.  Small companies have the freedom, creativity, motivation, and flexibility that large companies lack (McNurlin, Sprague, & Bui, 2008).  Large companies have the economies of scales and knowledge that small companies do not (McNurlin et al., 2008).  Large companies are beginning to advocate centralized corporate planning yet decentralized execution, which is a similar structure of a medium size company (McNurlin et al., 2008).  Thus, medium size companies have the benefits of both large and small companies, but also the disadvantages of both.  Unfortunately, a huge drawback on large organizations is a fear of collaboration and tightly holding onto their proprietary information (Carter et al., 2014). The issues of holding tightly to proprietary information and lack of collaboration is not conducive for a solid Knowledge Management nor Business Intelligence plan.

Business Intelligence

Business Intelligence uses data to create information that helps with data-driven decisions, which can be especially important for corporate planning.  Thus, we can reap the benefits of Business Intelligence to make data-driven decisions, if we balance the needs of the company, corporate vision, and the size of the company to help in choosing which models the company should use.  A centralized model is when one team in the entire corporation owns all the data and provides all the needed analytical services (Minelli, Chambers, & Dhiraj, 2013).  A decentralized model of Business Intelligence is where each business function owns its data infrastructure and a team of data scientists (Minelli et al., 2013).  Finally, Minelli et al. (2013) defined that a federated model is where each function is allowed to access the data to make data-driven decisions, but also ensures that it is aligned to a centralized data infrastructure.

Knowledge Management

McNurlin et al. (2008), defines knowledge management as managing the transition between two states of knowledge, tacit (information that is privately kept in one’s mind) and explicit knowledge (information that is made public, which is articulated and codified). We need to discover the key people who have the key knowledge, which will aid in knowledge sharing to help benefit the company.  Knowledge management can rely on technology to be captured and share appropriately such that it can be used to sustain the individual and sustain the business performance (McNurlin et al., 2008).

Knowledge management can also include domain knowledge (knowledge of a particular field or subject).  The inclusion of domain knowledge into a data mining, which is a component of Business Intelligence System has aided in pruning association rules to help extract meaningful data to aid in developing data-driven decisions (Cristina, Garcia, Ferraz, & Vivacqua, 2009).  In this particular study, engineers helped to build a domain understanding to interpret the results as well as steer the search of specific if-then rules, which helped to find more significant patterns in the data (Cristina et al. 2009).

The addition of domain experts helped captured tacit knowledge and transformed it into explicit knowledge, which was then used to find significant patterns in the data that was collected and mined through.  This eventually leads to a more manageable set of information with high significance to the company to which data-driven decisions can be made to support the corporate planning. Thus, knowledge management can be an integral part of Business Intelligence.  Finally, Business Intelligence uses data to create information that when introduced with experience of the employees (through knowledge management) it can then create explicit knowledge, which can provide more meaningful data-driven decisions than if one were to focus on a Business Intelligence Systems alone.

The effectiveness of capturing and adding domain knowledge into a company’s Business Intelligence System depends on the quality of employees in the company and their willingness to share that knowledge.  At the end of the day, a corporate plan that focuses on staff responsibilities and procedures revolving both in Business Intelligence and Knowledge Management will gain more insights and a higher return on investment that will eventually feed back into the corporate and business plans.

References

  • Carter, K. B., Farmer, D., & Siegel C., (2014). Actionable Intelligence: A Guide to Delivering Business Results with Big Data Fast!. John Wiley & Sons P&T. VitalBook file.
  • Cristina, A., Garcia, B., Ferraz, I., & Vivacqua, A. S. (2009). From data to knowledge mining. http://doi.org/10.1017/S089006040900016X
  • McNurlin, B., Sprague, R., Bui, T. (2008). Information Systems Management, 8th Edition. Pearson Learning Solutions. VitalBook file.
  • Minelli, M., Chambers, M., and Dhiraj A. (2013). Big Data, Big Analytics: Emerging Business Intelligence and Analytic Trends for Today’s Businesses. John Wiley & Sons P&T. VitalBook file.
  • Smith, C. (n.d.) The difference between business planning and corporate planning. Small Business Chron. Retrieved from http://smallbusiness.chron.com/differences-between-business-planning-corporate-planning-882.html

Business Intelligence: Zero Latency & Item Affinity

Types of data (based off of Laursen & Thorlund, 2010)

  • Real-time data: data that reveals events that are happening immediately, like a chat rooms, radar data, dropwindsonde data
  • Lag information: information that explains events that have recently just happened, like satellite data, weather balloon data
  • Lead information: information that helps predict events into the future based off of lag data, like regression data, forecasting model output, GPS ETA times

Everyone can easily find lag data, its old news, but what is interesting is to develop lead information from real-time data.  That has the biggest impact to any business trying to gain a competitive edge against its competitors.  When a company can use data mining and analytical formulas on real-time data they have a head start into generating lead information (Ahlemeyer-Stubbe & Coleman, 2014), which would allow for a company to make data-driven decisions much faster.  To do so, one needs to fully automate the modeling towards a predictive target, in an efficient manner (which is of particular importance when dealing with Big Data).  An example of zero latency (real-time) data analysis is seen through the production line on any manufacturing plant (i.e. Toyota, Tesla, etc.), data is stored in an enterprise resource planning (ERP) system (Carter, Keith, Farmer,  & Siegel, 2014).  Speed is vital, thus zero-latency means a manufacturing plant can meet its demands without incurring additional costs, and therefore keeping their profit margins up and their manufacturing programs in the black.  Carter et al. (2014) claim that General Electric could extract $150 billion of unrealized efficiencies just by analyzing their data.  They could get to that much faster if they drove down their latency to zero.  But, there is a caveat, the data must be not only real-time but accurate (Carter et al., 2014).

Item affinity (market basket analysis) uses rules-based analytics to understand what items frequently co-occur during transactions (Snowplow Analytics, 2016). Item affinity is similar to the Amazon.com current method to drive more sales through getting their customers to consume more.  But, to successfully implement the market basket analysis, the company like Amazon.com must implement real-time (zero-latency) analysis, to find those co-occurrence items and make suggestions to the consumer.  As the consumer adds more and more items into their shopping cart, Amazon in real-time begins to apply probabilistic mining (item affinity analysis) to find out what other items they would like to purchase in conjunction with their primary purchase (Pophal, 2014). For instance, buyers of a $40 swimsuit also bought this suntan lotion and beach towel.  Item affinity analysis doesn’t only impact the online shopping experience but also impacts shopping catalog placements, email marketing, and store layout (Snowplow Analytics, 2016).

Resources:

Business Intelligence: Data Warehouse

A data warehouse is a central database, which contains a collection of decision-related internal and external sources of data for analysis that is used for the entire company (Ahlemeyer-Stubbe & Coleman, 2014). The authors state that there are four main features to data warehouse content:

  • Topic Orientation – data which affects the decisions of a company (i.e. customer, products, payments, ads, etc.)
  • Logical Integration – the integration of company common data structures and unstructured big data that is relevant (i.e. social media data, social networks, log files, etc.)
  • Presence of Reference Period – Time is an important part of the structural component to the data because there is a need in historical data, which should be maintained for a long time
  • Low Volatility – data shouldn’t change once it is stored. However, amendments are still possible. Therefore, data shouldn’t be overridden, because this gives us additional information about our data.

Given the type of data stored in a data warehouse, it is designed to help support data-driven decisions.  Making decisions from just a gut feeling can cost millions of dollars, and degrade your service.  For continuous service improvements, decisions must be driven by data.  Your non-profit can use this data warehouse to drive priorities, to improve services that would yield short-term wins as well as long-term wins.  The question you need to be asking is “How should we be liberating key data from the esoteric systems and allowing them to help us?”

To do that you need to build a BI program.  One where key stakeholders in each of the business levels agree on the logical integration of data, common data structures, is transparent in the metrics they would like to see, who will support the data, etc.  We are looking for key stakeholders on the business level, process level and data level (Topaloglou & Barone, 2015).  The reason why, is because we need to truly understand the business and its needs, from there we can understand the current data you have, and the data you will need to start collecting.  Once the data is collected, we will prepare it before we enter it into the data warehouse, to ensure low volatility in the data, so that data modeling can be conducted reliable to enable your evaluation and data-driven decisions on how best to move forward (Padhy, Mishra, & Panigrahi,, 2012).

Another non-profit service organization that implemented a successful BI program through the creation of a data warehouse can be found by Topaloglou and Barone (2015).  This hospital experienced positive effects towards implementing their BI program:  end users can make strategic data based decisions and act on them, a shift in attitudes towards the use and usefulness of information, perception of data scientist from developers to problem solvers, data is an immediate action, continuous improvement is a byproduct of the BI system, real-time views with data details drill down features enabling more data-driven decisions and actions, the development of meaningful dashboards that support business queries, etc. (Topaloglou & Barone, 2015).

However, Topaloglou and Barone (2015) stressed multiple times in the study, which a common data structure and definition needs to be established, with defined stakeholders and accountable people to support the company’s goal based on of how the current processes are doing is key to realizing these benefits.  This key to realizing these benefits exists with a data warehouse, your centralized location of external and internal data, which will give you insights to make data-driven decisions to support your company’s goal.

Resources