Business Intelligence tools can help
a company analyze, strategize, and forecast. A look
at how it can help your company achieve cost and strategic
benefits, and the ways in which it helps businesses
in different verticals derive more value of the data
already present in its systems. by Soutiman Das Gupta
the fiercely competitive banking and financial marketplace,
the issues faced by Standard Chartered Bank (SCB) were
not different from those faced by other banks in India.
It needed to generate more profit, surpass competition,
and survive. The bank realized that it could derive
a large amount of relevant and intelligent information
out of the customer data it had accumulated through
its OnLine Transaction Processing (OLTP) systems.
"We wanted a solution that could
perform analytics on our valuable customer data to help
us proactively service customers, ensure customer loyalty,
and retain them. This exercise is a must for survival
in a fiercely competitive environment," said Sedjwick
John Joseph, Head-Business Intelligence Unit, SCB.
SCB deployed Business Intelligence
(BI) tools and carried out a variety of analyses, and
delivered the results to various business users throughout
the company. Using BI tools the bank can now effectively
manage and optimize profitability of the products in
its retail portfolio. The tools have made it easier
to run targeted campaigns, and elicit substantially
higher returns since BI can perform profit modeling
for each account.
"The bank knows the likelihood
of customers to take a new product. And this has resulted
in more focused marketing campaigns and reduced costs,
with improved customer satisfaction," explained Joseph.
Not only banks
SCB is not the only organization
in India to benefit from the use of BI tools. Other
banks and financial institutions, telcos, airlines,
and manufacturing companies in India have used it to
Typically, companies with large
amounts of data from various sources like customer relationship,
supplier management, and distributor management can
use BI tools. The idea is to derive intelligence from
the data already generated by the system—to help the
business user make vital analyses, strategies, and forecasts.
|“Airlines claim a three to
eight percent revenue increase by using yield management
systems” M.S.V. Rao, Director, Department of Information
Technology, Air India
M.S.V. Rao, Director, Department
of Information Technology, Air India says Airlines claim
a three to eight percent revenue increase by using yield
management systems (a kind of BI solution).
Business Intelligence tools
can help a company translate vast amounts of data into
intelligent insights to help further the business cause.
The company can identify new customers and new market
segments, conceptualize a new product for a particular
market area or niche, optimize cross-selling practices
by creating a consolidated view of the customer across
all touch points, and offer the ability to react and
plan with knowledge, insight, and confidence.
From raw to intelligence
Indian companies today are set
to enter the 'intelligence' age. Before the days of
computerization, companies had a lot of 'raw' data in
the form of accounts ledgers, registers, and various
reports. After computerization this data was fed into
basic office automation/financial accounting applications,
and databases to bring the company into the 'information'
Companies started using ERP,
CRM, and other enterprise applications, and collected
the data into a repository or data warehouse. This was
the 'knowledge' age. Now, companies can use this knowledge
to derive 'intelligence.' And this 'intelligence' will
drive companies and profits forward, and be the service
differentiator in today's competitive world.
Why BI for me?
"Data on its own is not of very
high value. It is only when it is instrumental in better
decision-making, strategic or
tactical, that it becomes impor-tant," explained Pranav
Kumar, Gartner Research Director (APAC)-Enterprise Application
The BI applications and utilities
can be used to perform tasks like forecasting business
conditions, improving operational efficiencies, managing
supply chains, enabling analysis of customer behavior,
and market segmentation. These tools perform the vital
functions necessary for an enterprise to analyze, strategize,
Traditional enterprise applications
like ERP, CRM, and SCM can provide access to a single
piece of data, like monthly sales figures. The goal
is to turn the mountains of relevant and related data,
already present in the systems, into useful information.
Tata Yodogawa, a steel roll
manufacturer and supplier runs Baan's ERP and Supply
Chain Scheduler. It gathered a large amount of valuable
operational, customer, and supplier data from its systems.
It identified a number of areas
in its business, which had a huge potential of offering
better business value. It felt that BI was necessary
for fast, intelligent, and knowledgeable decision-making
BI tools from Baan were deployed
at its plant in Gamharia, Bihar. The company expects
benefits like quicker and accurate strategies, better
analysis of historical data, and the ability to forecast
Maruti Udyog in India uses solutions
from Business Objects, and hopes to achieve benefits
like warranty claims analysis. This can help reduce
the return of components from its nationwide dealers.
The company can also figure out which component is returned
the most and how it impacts accounts or sales, and accordingly
create its business forecasts. This reduces cost of
The use of BI and a warehouse
at ICICI Bank has provided benefits like:
- Consistent, reliable, and
- Revenue enhancement: The
bank is generating more business from existing customers
via cross-selling, up-selling, and retention initiatives.
- Improved time-to-market:
Campaign execution was reduced from an average of
10 days to
- Decision-making: BI has
aided strategic decisions like new product development
and staffing through analysis of aspects like channel
usage patterns, value migration, and product baskets.
Analysts say this
|“Data on its own is of little
value. It is only when it helps in better decision-making,
strategic or tactical, that it becomes important”
Pranav Kumar, Gartner Research Director APAC, EAS
Pranav Kumar, Research Director
(APAC) - Enterprise Application Software (EAS), Gartner,
feels that BI as a process, (as opposed to BI software)
is the product of analyzing quantitative business data
usually generated from business transactions. But other
sources of data like human resources data can also be
It provides insights that will
enable business managers to make tactical decisions,
as well as establish, modify, or tune the business strategies
and processes in order to gain competitive advantage.
BI also helps improve business operations and profitability,
and generally achieve the goals management set by the
Alok Shende, Industry Manager
IT Practice, Frost & Sullivan feels that companies
have realized that the vast amount of data stored across
their value chains can be utilized in a productive manner
to understand customer behavior and study sales patterns.
The vast repository of information that rests within
the enterprise database will drive the demand for BI
Increasing competition in the
banking, finance, and the telecommunications sectors
will also propel the growth of BI. Using BI tools, organizations
can get minute-level details about their customers.
On a strategic level, firms will be in a better position
to understand customer purchasing patterns for products
and services across geographical and time boundaries.
The true benefit arises as firms use this information
on a customer-to-customer basis, allowing firms to retain
profitable customers while screening those that do not
directly add value to the company's top line.
Soutiman Das Gupta can be reached
Click on image for larger view
Here are examples
of how companies in different verticals can benefit
from the use of BI tools.
A mobile telecom with thousands of customers usually
maintains a large data warehouse that serves as
a knowledge repository. The warehouse keeps information
like monthly itemized bill for each customer,
information about roaming into other networks,
number of complaints made at the help desk, the
nature of complaints (like bad reception, high
tariff, limited service), and seasonal variance
in billing amounts.
|“We wanted a solution
that could perform analytics on our valuable
customer data to help us proactively service
customers, ensure customer loyalty, and retain
them” Sedjwick John Joseph, Head-Business
Intelligence Unit, SCB
It can use BI tools
- Suggest new tariff
- Understand which
customers need more services like GPRS and MMS.
- Identify the unique
problems faced by each user.
- Identify those
users who show sign of 'shifting'.
- Reduce churn rate
by offering focussed solutions to these customers.
- l Plan better
profit-generating measures from low yield customers.
Hutchinson Max Telecom
Limited uses BI tools to perform impact analyses
of new pricing initiatives; actively track key
indices like usage and churn; predict customer
traits like usage behavior, tariff plans and product
performance; and acquire in-depth insight into
pre-purchase and post-purchase behavior of the
BPL Mobile uses BI
tools to perform Customer Asset Management. The
company can implement specific marketing campaigns,
run special programs to retain customers, measure
the impact of customer turnover, and identify
opportunities for cross-sell.
A bank connects its legacy database with departmental
databases, and gives branch managers and other
users access to BI applications.
This helps to:
- Determine who
the most profitable customers are.
- Identify customers
who are ideal to try cross-selling techniques
- The possibility
of a new product or service to a particular
- Identify the time
of the year when customers get raises or bonuses;
they can be targeted with other financial schemes
like bonds and term deposits.
- Frees IT department
staff from the task of generating analytical
reports for the departments and it gives the
personnel autonomous access to a richer data
ICICI Bank uses BI
tools to create nationwide enterprise business
strategies and increase the revenue of the customer.
It can decide which customer can be targeted for
cross-selling assets and third-party assets. It
can also create a strategy to migrate a customer
to a lower cost channel of banking.
Bank uses BI tools to effectively manage and optimize
profitability of the products in its retail portfolio.
The tools have made it easier to run targeted
campaigns and elicit substantially higher returns,
since BI can perform profit modeling for each
account. The bank now knows the likelihood of
customers to take a new product.
A hotel, which may be a part of a large hotel
chain, uses BI applications to:
- Compile statistics
on average occupancy and average room rate to
determine revenue generated per room.
- Determine its
competitive position in various markets by gathering
statistics on market share and data from customer
- Analyze such trends
every day, week, month, and year to provide
the parent corporation, a picture of how each
individual hotel is performing.
BI uses a well-organized
source of information from where it can draw out
intelligent responses for business users. A data
warehouse is a good source of data for BI.
A range of technologies
and products are used to generate BI. The most
common tools are simple query and reporting, OnLine
Analytical Processing (OLAP), statistical analysis,
Decision Support Systems (DSS), and data mining.
These tools are used in a variety of ways.
To better understand
the role played by the various tools, and the
scope of BI in an organization, let's take a look
at the architecture of a typical BI implementation
at a large company that also has legacy data.
Data is stored in
an organization in separate OLTP systems like
ERP, CRM, SCM, financial packages, HR packages,
and even legacy systems. These are the primary
sources of data and can be called 'primary systems.'
Load (ETL) tools are run on these systems and
organized data is stored in a data warehouse.
The data warehouse
can be called 'secondary systems.'
The 'Extract' process
reads data from the various sources. The 'Transform'
process converts the extracted data into a scripted
and defined format, which is fit for the warehouse.
The process standardizes the various data structures
so they can be accessed and analyzed with high
accuracy. This is done with the use of rules,
lookup tables, and by combining the data with
The 'Load' process
writes the data into the warehouse. The efficiency
and performance of a BI solution mostly depends
on the effectiveness of the ETL tools. The idea
is to provide a rich and aggregated source of
is now delivered to the users or 'information
consumers' throughout the organization to help
in analysis, strategy, and forecasting.
If users are located
in remote locations, a Web server can be deployed
on the warehouse.
If the size of data
is very large, smaller data marts, which focus
on a particular subject or department, can be
used for easier information delivery.