Leveraging Business Intelligence
Todays organisations are leveraging BI in conjunction
with CRM and SCM solutions in numerous ways to derive hitherto unseen benefits
and business opportunities. by Anil Patrick R.
and banking were the first industry verticals to experience the benefits that
BI brings to the corporate table. They were also the first to experiment with
how BI, or rather analytical capabilities in conjunction with CRM solutions
can improve customer experience and thereby the business.
Among the first applications in this area were the telecom industrys BI
initiatives to reduce customer churn and the banking sectors up-sell/cross-sell
of financial products. In the case of telecom, the use of BI connected to operational
CRM systems helped identify customers who were most likely to shift to another
service provider, by analysing the number and nature of grievances registered
by users. In the case of banking, practices like householding (Under the householding
rules, companies and mutual funds may deliver a single prospectus, annual and
semi-annual reports, and proxy and information statements, to investors who
reside at the same address) helped reduce operational expenses per customer
while analysis of customer data helped them cross-sell or up-sell multiple financial
products and services to prospective customers. Decision makers can discover
new customer segments which provide great value to the company and in reality
these get missed out because of their small size. Sometimes, an organisation
does not want to retain a certain type of customer as it costs more to retain
this type of customer than the value provided by them to the company. Customer
profiling and segmentation will help to determine the profile of this segment
as well, says Vaibhav Phadnis, Director of Server Business Group, Microsoft
India. Integrating applications like CRM or SCM to the BI tool is gaining acceptance
with the clear advantages that the latter offers. Says Zoeb Adenwala, Chief
of IT, Pidilite Industries, "Since we have integrated our other business
processes to the BI tool one of the benefits has been a single window for all
data reporting/analysis. Thus reports or figures accessed from anywhere are
uniform and provide the same data." Some of the other advantages he feels
are the ability to take quick decisions by using slice and dice and drill down
functionality. This also allows for better planning and development.
|How are CIOs integrating their
CRM/SCM systems to BI?
- Single window for all Data reporting/
- Same figures reported across the company
- Quick decision making using slice and
dice and drill down functionality
- Exceptions reporting rather than details
- All back-end systems like ERP, CRM, SCM
need to be integrated by ETL methodology
- Users do not run from pillar to post for
any complex requirement/analysis
- Users handle their day-to-day MIS needs.
No IT intervention needed
THE CASE FOR DEDICATED BI SYSTEMS
While the success of these initiatives has resulted in CRM products with analytical
capabilities, the case is still strong for a dedicated BI system connected to
an operational CRM systemprovided the linking is done optimally. This
is because the new CRM products still do not match up to a full-fledged BI systems
analytical capabilitiesnot so far at least.
Another point in favour of a BI-CRM combination is the fact that many organisations
already have a CRM solution in place. It makes more sense for such enterprises
to leverage existing CRM investments and deploy a full-fledged BI system. This
will ensure that data from all the data sources (including the CRM) can be brought
under one roof for a better all-round perspective of the business.
For example, consider a bank which tracks the bank balance patterns of employed
persons between the age of 25 and 30. Using the BI-CRM combination, it is possible
to flag an abnormal situation when the persons bank balance unexpectedly
drops below a certain average threshold. This customer has had a steady balance
in his account so far, and this sudden drop in the balance is usually an indicator
to an unexpected financial need. This is when the bank can advance a low interest
loan at very attractive terms to the customer, using its call centre.
Using BI tools the intelligence can be built into applications itself
as well. Hence a registration form processing application can assign each registration
form a customer segment right at the outset. This will help to do personalised
communication based on the likes and dislikes of the customer thereby improving
customer loyalty and reducing churn, says Phadnis.
GAINS ALL AROUND
Most companies can have only a
rough idea of the productivity gains that can be derived from SCM as part
of the entire set-up. No manufacturing company can get a 360-degree view
of its operations if its SCM is a stand-alone system
The advantages of this approach are two-fold. First, the customer feels that
the bank has come to his assistance in a time of need, increasing loyalty. The
second is that the bank is able to gain new business from an existing customer,
thus leveraging the relationship further. Similar approaches are being used
by the telecom industry as well to promote its business and identify unexplored
This powerful querying and reporting functionality that the BI-CRM approach
bringswhen implemented rightis yet unparalleled by any other approach
available so far.
THE SMARTER SUPPLY CHAIN
India and SAARC
BI has also made inroads in providing a consolidated view of
the company including its supply chain. This has helped reduce the traditional
limited view of the supply side of operations.
Most companies can have only a rough idea of the productivity gain that
can be derived from SCM as part of the entire setup. No manufacturing company
can get a 360-degree view of its operations if the SCM is a stand-alone system,
says Arun Ramachandran, Presales Head, India and SAARC, Sybase.
With this new approach, the BI system also acts as an intermediary between the
organisations CRM and SCM systems. The consolidated view aside, this approach
helps the company manage its supply to match the demands of its customers. It
can also help the company tailor product attributes to match changing customer
For example, consider a home appliance manufacturer which is constantly receiving
customer feedback on products through its CRM system. While the BI can help
business managers evolve a new product line, the SCM will help coordinate with
the suppliers to meet the changed production requirements.
|Is it possible to benchmark BI?
Are there standardised benchmarks?
Yes and no. While there are standardised benchmarks
like TPC-H, these are considered outdated by most of the industry. Most
vendors have their own benchmarks which are used for reporting and ETL
Benchmarking BI is about
how many users can get onto the system and use it productively. It is
about throughput and similar to transactional systems. The only standardised
benchmark available now is TPC-H which is outdated, says Arun Ramachandran,
Presales Head, India and SAARC, Sybase. A new standard TPC-DS is expected
to roll out this year.
Although the emphasis
is sometimes on TPC-H, its not exactly up to the mark. TPC-C is
for transaction processing and TPC-H for BI, but I dont think it
is an accurate enough benchmark because the variables in BI are just too
many, says Deepak Ramanathan, Solutions Architect, Business Intelligence,
SCI'S STILL EVOLVING
The benefits of SCM-BI aside, there are still glitches to be
ironed out. Supply chain intelligence (SCI) is still hounded by problems such
as lack of timely analysis, incompatibility and the resulting data definition
variations between systems.
The foremost concern in SCI is about how timely the analysis from the data warehouse
is. Most data warehouses used in the manufacturing industry have low volumes
of data and transactions. This is why it is common to see SCI analysis being
done on a weekly basis. This might be too infrequent an interval for the SCI
system to deliver optimal performance. However, this issue can be resolved by
doing the analysis on a daily basis.
The next issue is that traditional BI-SCM combinations use a best-of-breed approach.
Most of these implementations use different tools which may not communicate
with each other. Suppose an organisation buys a new product for the supply
chain. Forecasting or optimisation is already being performed on this system.
When the new tool comes in, there is no way to figure out how many tools are
going to be affected by it during reporting. This is because all the tools are
just passing on the outputs without talking to each other. For supply chain
intelligence to work, all these tools have to communicate using a metadata layer,
says Deepak Ramanathan, Solutions Architect, Business Intelligence, SAS India.
Another approach similar to the metadata layer is the semantic layer approach
to tide over such issues. The metadata layer helps the reporting tool understand
how a particular column has changed over time. This common layer approach is
claimed to help not only in maintenance from an IT perspective, but also from
a business perspective in terms of helping find the lineage of data.
with inputs from Shivani Shinde