ASSIGNMENT SEM-3
Q.1 a. List the factors responsible for the increasing importance of I in organisations. b. !hat are the obstacles in Implementing I in "rganisations#
ANS
Factors Responsible for the Increasing Importance of Business Intelligence in Organisations The increasing importance of BI is due to various factors, namely, technological advancement, competitive market and need for quick reflexes. Let's elaborate on these factors. Technological a$%ancement& The magnificent increase in electronic connectivity beteen people and organisations through the Internet and Intranet has generated an explosion of data volumes. The development in the storage capabilities has also supported this exponential rise in the amount of data. In addition to this, hardare ith high processing speeds help in carrying out complicated calculations calcu lations quickly. !vailability of more and better calculated ca lculated data can help in crafting better decisions, if handled properly. 'ompetiti%e mar(et& "ecision making is a crucial task in this competitive business environment. #or the success of a business, decision makers need to perform comparative analysis of its business processes, metrics and dimensions, such as quality, cost and time. $any organisations ork globally, in multiple industries and in collaboration ith other industries as ell. Nee$ for )*ic( refle+es& #inancial integration has made the market highly volatile. Being extremely competitive, any opportunity that arises in the market closes very soon. The decision makers need to take extreme care in these matters. They have limited time to react and respond to such situations.
Obstacles in Implementing BI in Organisations BI helps organisations to overcome obstacles and respond to the needs that result from advances in technology and ne requirements. #or this, the BI solution providers or implementers ill need to implement next%generation analytics and address changes in the context of data and its usage. The effective use of BI demands a sound ecosystem of management practices and policies.
,efinitions& BI cannot be implemented successfully in the absence of a clear definition about perspective goals. Initially, only & to ( )*Is should be chosen to create standards and gradually be increased to reflect the overall performances. ,ata Go%ernance ,G& This is another ma+or factor that poses a big hurdle in the overall functioning of the BI solutions. " refers to the overall handling of the data in terms of availability, integrity, usability, backup and security. Enterprise Architect*re EA& It describes the structure of an organisation. -! focuses on the fact that the system should be ell planned and described from the abstract level to a detailed level. /e)*irement anal0sis& It is an extremely important step and poses a ma+or hindrance, if not identified correctly. The understanding of BI requirement its purpose and the end userscan reveal the type of information needed and its frequency.
Q. a. ,isc*ss the contrib*tion of b*siness anal0tics in strateg0 management b. 2o is '/M lin(e$ to b*siness intelligence#
'ontrib*tion of b*siness anal0tics in strateg0 management
! good financial performance is the result of better business outcomes. To achieve these outcomes, organisations need to develop and manage multiple, interconnected business strategies. B! solutions give an actionable business forecast that can guide business strategies and technologies to provide timely and accurate financial results. !lthough, the business user teams may only have an apparent understanding of B! technologies, they are expected to highlight the requirements of the business. They should help in the prioritisation of pro+ects and promote B! efforts among the business users. BA solutions have an important role to play in achieving better financial performance. Some of the key benefits are listed as follows: Improve the decision-making process (e.g. uality and relevancy of decisions! Speed up the decision-making process Attain better alignment of resources with strategies "ealise cost efficiencies "espond to users# needs on a timely basis Achieve enhanced competitiveness Accomplish a unified view of the overall information $ollaborate operational and financial strategies Increase the growing revenues Share information with various departments %aintain regulatory compliance Share information with e&ternal users and other stakeholders (e.g. customers and suppliers! • • • • • • • • • • • •
2o is '/M lin(e$ to b*siness intelligence
The folloing points depict ho /0$ is linked to BI1 G*i$ance& BI often gives advice to the /0$ department. #or example, if a sales manager needs to determine ho to sell a specific product to a particular customer, he2she can make use of the BI tool such as /0$ to revise /0$ guidelines that provide assistance to sale representatives in communicating ith the customers. ,oc*mentation& 3ales managers document /0$ data and combine it ith their BI data. #or example, a sales manager can collect data about different types of customers ho purchased certain products and services. Ill*stration of the softare an$ practices of sales managers& /0$ usually illustrates the softare and practices of sales managers to keep track of customer user accounts. Information regarding the requirements, sales histories, feedback and contacts of users might be covered in the /0$ accounts. Inter-$epen$ence& BI and /0$ are dependent on one another as sales professionals often require information that is based on many interdepartmental activities. La*nch of a$%ertising an$ mar(eting campaigns& !nother useful association beteen /0$ and BI facilitates advertising and marketing department to launch successful campaigns. Generate ne intelligence& $any professionals comprehend another important association beteen /0$ and BI in the sense that /0$ data can be used to generate ne intelligence.
Q. 3 E+plain the $ata mining process in $etail ANS
"$ includes a number of operations, each one of hich is aided by a variety of techniques, such as decision trees, rule%based induction, neural netorks and conceptual clustering. The derived results are evaluated repeatedly over the developed models to minimise the occurrence of potential errors. In the real orld applications, knoledge extraction involves /ollaborative use of several data mining techniques and operations. "ata mining consists of the folloing six steps. "ata is pulled from the data arehouse and sent to the -TL layer, here - stands for extract, i.e., pulled, T for transform and L for load. •
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Based on the query generated, the data is explored for the matching patterns.
The output is then forarded to the analyst, ho prepares a ne set of questions to elaborate on certain aspects of the findings or to refine the search. This is an iterative search process. •
4nce the analyst is through ith the task, the final report generated by the data mining system is forarded for human interpretation. •
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The data is then represented in a functional format, such as a report, graph or a table.
#inally, it is passed on to the decision makers to take an appropriate action based on such findings. •
Q.4 /elate beteen I tools an$ relationship mar(eting strateg0 ith ANS Relationship between BI tools and relationship marketing strategy
BI analytic tools, hen used ithin a relationship marketing strategy, can regularly revie business performance trends and suggest actionable recommendations, enabling the organisation to consistently optimise the strategic marketing approach. In this ay,
organisations investing in a BI analytic tool benefit from measurable and interactive marketing initiatives that strengthen customer relationships, advance client intelligence, and $aximise 0eturn on Investment 504I6. The BI analytic tool ould facilitate in identifying1 •
!n organisation7s most profitable clients
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The top clients of a specific product2service
The best methods and channels ith hich to maintain customer loyalty in the most cost% effective manner •
The strategy to deliver the right amount of incentives and opportunities to keep clients committed to the organisation • The most effective marketing tactics based on specific marketing goals •
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/lients ho can be the main candidates for cross%promotion of other products or services
/lients ho demonstrate a high probability and potential for multiple purchases of different products and services •
The clients ho respond strongly to ne offerings and ranking them as early adopters, opinion leaders and2or trial enthusiasts BI analytic tools utilise a data%driven analytic approach for helping business organisations to gain a unique understanding of the value level of the client. These tools also help in understanding the value potential over time and according to the respective segment. •
3uch intelligence insights allo companies to build and maintain stronger, direct relationships ith their clients. 3uch relationships can be used to 8migrate7 clients7 lifetime values from less profitable to more profitable. $oreover, it helps organisations to forecast different client behaviours in order to try and change undesirable behaviour or catalyse desirable behaviour. 4ther organisations use BI analytic tools to monitor client defection, consumer longevity, up%sell and cross%sell opportunities, likelihood to respond, best customer acquisition, and much more. In fact, the only possible limitation is probably the business organisations7 level of creative thinking. An e+ample of I tool& Elegant I for '/M
The -legant BI solution is a customer relationship management BI solution that provides a single source, and an integrated vie of enterprise data from various sources and allos every user to create vies, dashboards and key )*Is to fulfil the requirements of their role, department and function. Therefore, every user is busy achieving strategic, operational and tactical goals, and can provide suitable support for constant success in getting ne clients, retaining already existing clients and selling ne products and services.
Q.5 !hat are the main feat*res of a financial reporting s0stem
ANS
The folloing are the main features of a financial reporting system1 ,rag-an$-$rop report b*il$er& This feature helps in creating sophisticated reports and analysing them ith ease. To generate a report, you need to select the desired items from a menu, drag them onto a graphical orkspace and choose appropriate formatting options. 'hoice of $imensions in ros an$ col*mns& This feature enables you to easily design your report. 9ou +ust need to choose the right value of various dimensions, such as business unit, department, region, product, customer, pro+ects, metrics, assumptions and time period, and drag them into the relevant ros and columns of the report builder. 6ilters& These limit the data displayed in a report by filtering it by any dimension, such as a specific sales territory, business unit or sales channel. 7arameters& These minimise the number of reports generated to record all the facts and conclusions. /reate a prompt for customising the report by giving users options to select the appropriate time period, department, region, etc. The user security feature ensures that reports can be run only for dimensions alloed for each user. Annotations& This feature allos you to include collaborative explanations, comments and questions on reports. 9ou can include an ongoing thread that receives input from more than one user or refer to specific data in a report or the entire report. These annotations can be vieed either ithin the body of the report or as footnotes. A*tomatic sec*rit08streamline$ set of reports& This feature allos you to create a set of standard reports for a group of users 5e.g. *:L or 3ales "etail6. It ensures that specific reports are visible only to the users authorised to access them. ,rill-$on& This allos users to analyse the underlying data that contributes to a specific total or rollup value through real%time drill%don capabilities. M*lti-%ersion %ariance reporting& ;ith this feature, you can compare actual, budget and forecast data and display variances as values and2or percentages. Graphs an$ charts& In addition to tabular formats, this feature facilitates vieing of reports as graphs or charts. "*tp*t formats& This feature helps to generate reports in different formats, such as
Q.9 ,isc*ss the %ario*s critical challenges that nee$ to be o%ercome for I to s*ccee$ ithin an organisation ANS
Business success is achieved ith BI through easily accessible information. This access can be best achieved ith the help of precise and timely insight into the finances and customers of an organisation as ell as the state of the market. The true indicator of success in business is hen BI results in more profitability. 4rganisations achieve success in their business by performing the folloing actions1 •
$aking better decisions ith confidence and speed
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4ptimising business operations
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3hortening the product development cycle
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!nticipating ne opportunities and maximising the value of existing product lines
#ocusing on marketing and overall supply chain ith improved supplier and customer relationship •
#or BI to succeed, the organisation must understand and analyse the challenges that come in BI implementation. =sually, BI pro+ects fail because of the folloing reasons1 #ailure to understand that BI pro+ects are cross%organisational business initiatives> they differ from general stand%alone solutions . •
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=ninvolved business sponsors ho take less interest in an enterprise BI implementation
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=ninterested or unavailable business representatives
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Lack of availability of skilled staff to ork ith BI tools
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!bsence of iterative development methods
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Lack of methodology in the development of BI pro+ects
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Lack of clarity and analysis of business needs
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Impact of dirty data on business profitability
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Ignorance of the necessity and importance of metadata and its use
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0eliance on unrelated tools and methods
?o, let us examine these challenges one by one in detail in the folloing section. 'ross-organisational collaboration
=sually, business initiatives focus on a particular area of business or on a limited set of products. !s a result of this narro focus, organisations could not analyse the impact of the data generated by the pro+ect and business operations.
*siness sponsors
3trong business sponsors believe in the BI pro+ect7s value and remove the obstacles to champion it. ! BI pro+ect requires support from a committed business sponsor ithin an organisation. It generally fails to find that support. ,e$icate$ b*siness representation
BI pro+ects are technical in nature instead of being business%oriented. Thereason behind this limitation is that most BI pro+ects are run by IT pro+ect managers ho have little knoledge of business. A%ailabilit0 of s(ille$ team members
BI pro+ects are significantly different from other pro+ects as they lack concrete, ell%defined deliverables. $oreover, the technical and business skills required to implement a BI application somehat differ from other operational 4nline Transaction *rocessing 54LT*6 pro+ects. I application $e%elopment metho$olog0
To succeed, BI pro+ects must follo a plan ith ell%defined ob+ectives and methodologies.