Business Intelligence and Data Mining Review
By: Jennifer Paddock and Kathrin Lemoine
Overview of E-Business:
By the year 2003, there will be over half-billion Internet users and e-commerce will account for 1.3 trillion dollars worth of business transactions. E-business is a source of significant strategic advantage-one that will distinguish a company from another and transform business relationships, as we know them today. E-business is an enterprise designed for success in the information economy. E-business brings into play an organization’s resources and partners in a new innovative way to create clear strategic advantage. E-business uses innovative technologies to leverage an organization’s product knowledge, and then watch sales people deliver solutions, enhance customer satisfaction and reduce product return costs.
Forces Shaping the Future of Business (Future of Business)
From e-business to industry convergence, major forces are shaping the future of business. At the center, the Internet empowers the customer with nearly limitless number of sales channels. However, customer needs and satisfaction is the area where e-business will have to work hardest because of existing fear and a general lack of trust. Asurvey of CEO’s in Switzerland revealed the belief that customers will become the beginning and end of each business process. The customer will substantially drive both production and delivery of the market service. Almost all companies interviewed assume they will have to offer more services to make sure their products are better suited to meet individual needs and be able to offer more convenience than "brick and mortar" companies can offer.
The ultimate goal is for e-business to change the definition of "industry." Companies will need to integrate and connect their websites’ buying and selling processes into back office, customer and marketing systems, and then to bring customers and suppliers together to build on-line value chains that improve service and reduce costs. But, how does a company build productloyalty with e-business? Companies must place the power and potential of e-business into customers’ hands…"e-business really means ‘me-business’ – my time, my place, my way." It will be necessary to get to customers with web application development (offered by Compaq and Price Waterhouse Coopers) as well as more sophisticated enablers of customer care such as data warehousing/data mining and call center automation, or ultimately developing a market intelligence enterprise.
Business Intelligence and its Vendors
"According to an International Data Corporation case study of 65 companies, the mean return on a business intelligence investment was over 400% over 2.3 years."Seibel
Leading supplier of front office systems. Offers an entirely Web-based family of enterprise-class applications. Siebel's Web-based architecture provides enterprise-wide support for internal sales, marketing, and customer service organizations and extends that support throughout the entire enterprise, seamlessly uniting third-party resellers and service providers, business partners, and customers into a single information system.
Chase case study: Chase decided to use Siebel’s front office solution as the cornerstone of its effort to unite customer relationship activities across department boundaries. Chase Manhattan is already experiencing increased communication and availability of information that enables the bank to treat its customers like people, not account numbers.BAAN
Comprehensive portfolio of integrated solutions includes best-in-class, component-based applications that span an organization's entire value chain including E-Business and Web Commerce, Customer Relationship Management (CRM), Supply Chain Management (SCM), and Enterprise Resource Planning (ERP). Baan also offers a global network of support, consultancy and education services.
The General Mills case study: Their supply chain was too complex to be analyzed and understood without sophisticated modeling tools and they needed to examine the interrelationships between the links in its supply chain. By analyzing trade-offs in the selection of suppliers, shipping lines, plants, and inventory locations, General Mills sought to reach a higher level of productivity, optimize performance, and reduce costs. Storage capacity, customer demands, production rates, and costs all had to be considered. CAPS/Baan was the tool General Mills used, and it led to higher productivity and reduced costs across the board.I2
Planning and optimization software,RHYTHM®, helps companies maximize efficiency, collaborate with suppliers and customers, conduct intelligent business over the Internet, and become more responsive to market demand. i2 has consistently developed new intelligent planning technologies for every phase of producing, delivering and selling goods and services, including solutions that support intelligent e-Business and e-Commerce. This cycle of buy-make-move-store-sell is called the supply chain and today i2 Technologies is the leading provider of supply chain optimization solutions.
The Thompson case study shows how a manufacturer can reap rewards by implementing a planning system. Thomson uses RHYTHM as a vertically integrated master scheduler to synchronize the production of higher-level assembly parts, such as cabinets or remote controls. RHYTHM also provides global visibility into Thomson's production, so planners can immediately see how making one change will impact the entire organization. Additionally, Thomson is using RHYTHM as a demand manager, increasing forecast accuracy for seven product categories across North America. The old forecasting process involved 52 steps, most of which were manual. The process took more than two weeks and the accuracy rate varied from 35 to 70 percent, depending on the product group.
Provides front office solutions; combines the key functions of contact, account, opportunity, order, and relationship management for everyone who sells. And by leveraging Internet and emerging mobile technologies, SalesLogix makes it possible to create a single, proactive sales team.
The New England Credit case study enabled NEC to easily determine what sales are in the pipeline, close ratios, sales cycles, and much more. Also, all activity at the customer level is stored within SalesLogix, letting all call points within the company deal more effectively with the customer to provide superior servicePivotal
Pivotal enables organizations to increase revenues by providing 360° e-Business Relationship Management (e-BRM) solutions that manage marketing, sales and service relationships between employees, business partners and customers on Internet Relationship Hubs.
The Ipswitch case study involves the software vendor turning to Pivotal in order to more easily understand and apply the deluge of incoming potential sales information. In conjunction with One, Pivotal’s partner, Ipswitch was able to create an extremely beneficial relational database management system that allowed them to leverage knowledge into sales.SAP
SAP business intelligence (BI) goes far beyond the performance reporting supplied by other vendors and provides in-depth, multidimensional knowledge needed as a basis for sound business strategy. For SAP, there are three pillars of enterprise business knowledge:
Successful companies today recognize the opportunities that e-business can offer and are using Oracle’s application-integration infrastructure to transform themselves into the most successful businesses. SeeOracle Education-Business Intelligence Categories.
Microsoft knows that many companies are not using the Microsoft SQL server to answer the most basic of BI questions such as, "how many customers are buying each of my products?" Simple analysis using regular count management does not work for questions such as these. However, Microsoft offers DISTINCT COUNT measure, requires advanced knowledge of SQL Server’s online analytical processing services (OLAP). Microsoft also offers basket analysis to meet other classic information demands.
Microsoft offers acase study of how successful Shoney’s Inc. became using their product. Shoney’s recently installed a BI solution program that enables it marketing, sales, and inventory managers to quickly and accurately analyze its point-of-sale (POS) data in order to respond quickly to market opportunities. SQL Server 7.0 OLAP services SQL Server News Marketstar Corporation Case Study Sybase
In January 1999, Sybase developed a division focused solely onbusiness intelligence. This division is committed to providing technology and methodology designed to help organizations uncover and leverage competitive advantages by unlocking customer behavior, trends, and business answers in their enterprise data. Their newest offering is a BI/Data Warehouse product called Industry Warehouse Studio. IBM
IBM business intelligence solutions help a company to capitalize on the massive amounts of customer data the company acquires, so that customers can be kept loyal and competition can be kept at bay-transforming the company into a nimble, customer-focused, information driven e-business. IBM’s e-business vision is to find smarter, more efficient ways of addressing familiar business problems by integrating the WEB and information technology. IBM offers complete, end-to-end BI experience across consulting services, hardware and software solutions. IBM’s has a team of over 2,500 BI specialists that can tailor business solutions for any company.
Data Mining and its Vendors
Data mining is the automated discovery of patterns and relationships in a data warehouse, i.e. the application of artificial intelligence to vast amounts of data to discover hidden trends, patterns and relationships. A data warehouse is a relational database management system designed specifically to support management decision-making.
The key difference between the two involves the level of manager input in querying the warehouse. Specifically, managers most often use a data warehouse to ask preconceived questions and to formulate reports based on these queries. On the other hand, managers often use data mining techniques to answer questions they may not have even thought to ask! In other words, managers ask the data warehouse (the relational databases) the questions for which they want the answers (in the form of a query). But, data mining involves the program searching for patterns and relationships without human intervention. Data mining allows management to see potential patterns and trends in the data that would not otherwise be readily apparent.
Within this framework, specific uses for data mining can include: customer relationship management, strategic product positioning, human relations management and employee retention, and financial management, including cost reduction, credit scoring, audit and enforcement targeting. Data mining can also be used to detect fraud and improve marketing efforts.
Some vendors/information sites for data mining products and a short summation of what they offer follow.
1.Intelligent Miner Although data has much to reveal, one may not always know what questions to ask. Most analytical tools can only verify what one hypothesizes, and the hypotheses of even the brightest analysts are constrained by their individual experience, preconceptions, and even imagination. IBM’s data mining tools can help by extracting previously unknown, comprehensible, and actionable knowledge thus overcoming the restrictions of verification-driven analysis. IBM states that their complete information mining solution also delivers the knowledge it uncovers to those who need it, in a form they can use, wherever they are, so they can put it to strategic and tactical use. A great example is that of Safeway UK’s use of Intelligent Miner to figure out that a low-selling product, which might have been taken off the shelf, was actually being purchased by the top-spending 25 percent of its customers. Retaining the product helped Safeway avoid disappointing this very lucrative market segment
2.OLAP, Data Warehousing, Web-based DSS, etc The MIT site discusses a project that is currently evaluating how data mining can work together with datawarehouses and OLAP to enhance knowledge discovery. Currently, the group is performing a state-of-the-art study on datawarehousing, OLAP, and data mining. The focus is on doing a market survey of all commercial applications available in these areas. This study will create a composite collection of information on the products and technologies available today.
A successful implementation of datamining incorporates both OLAP and datawarehousing. A datawarehouse is used to store the data, and an OLAP tool is used to gather information from the warehouse. Essentially, datamining works alongside and with OLAP to dig out information. Datamining can be considered the plan, OLAP the tool, and the warehouse the raw product.
This incredibly comprehensive site goes on to offer an extensive list of data mining, data warehousing and OLAP products with links to the companies that produce them, as well as links to profiles of these products.
3.KDNuggets™ This newsletter provides information on datamining companies, their products, news, jobs, courses, meetings, etc. It even goes so far as to break datamining down by industry. For example, if one looks under KDNugget’s home page at solutions, and then looks at e-Commerce, then at IBM surfaid, one can see an example of how datamining can be used to analyze web surfing. IBM hosted the U.S. Open website, and from this learned some important facts: tennis seems to be coming back in terms of popularity, sales on the site were up over last year, portal power could be shifting, and Agassi is the leader in page views.
4.DSstar Offers weekly news about relevant and current data mining topics, including individual companies and their actions. For example, one of the articles in this week’s edition discusses a new data mining company in New Mexico that will analyze data to help drug companies create more desired and thus more profitable drugs.
5.Data Miners A journal that offers many links to a lot of other data mining periodicals, as well as to upcoming conferences.
6.Enterprise Miner from SAS The Mondadori Group in Italy knows the importance of good customer relationships. Part of the leading Italian publishing group Mondadori, Club degli Editori SpA (CDE - Publisher's Club) sells eight million books annually by mail order. Ivano Maestri, CDE's general manager, says, "We require very broad knowledge of the potential buyer's characteristics. Rather than producing a single catalog for our 900,000 members, we produce 900,000 different catalogs. To do this, we need increasingly sophisticated information systems." CDE uses a SAS Data Warehouse and SAS data mining techniques to achieve this goal. Dr. Giovanni Dalle Vedove, responsible for systems development, says, "The fundamental issue is analyzing 40 million individuals - virtually the entire population of Italy, all of them potential customers - to understand their behavior, so we can create the most effective mail order system possible. Previously, marketers looked for answers to questions that they had already framed. Now, they have been liberated and can develop a multitude of questions."
All of these sites offer a lot of valuable information regarding not only what data mining, data warehousing and OLAP are, but also how they can be used. There are links to the many vendors that provide these products, as well as current news and information on where to find even more information.