The smart way to use BI
Having intelligence is not as important as knowing when
to use it, just as having a hoe is not as important as knowing when to plant.
couple of years back, Fortune magazine reported on a then-new category of software
that was helping consumer goods marketers and retailers understand their consumers
The software category was none other than business intelligence (BI), and they
had mentioned how Ben & Jerrys (a popular ice-cream maker in the US)
had solved a rather knotty problem of customers complaining about the companys
cherry-flavoured ice-cream not having a sufficient quantity of the key ingredient,
The BI solution revealed that there was nothing wrong with the ice-cream. It
was simply a case of the cartons being mislabelled with pictures of cherry yoghurta
product that happened to contain more cherries, a fact that was quite clear
from the picture. The minute Ben & Jerrys got the labels right, consumer
Theres a lesson in tales like this. BI can be a powerful tool for marketers
in consumer-facing companies. However, if its not done right, BI can end
up as an oxymoron like MI (Military Intelligence).
Let me clarify that. If youre an OEM supplying parts to a handful of large
manufacturers, you probably wont have too big a problem figuring out that
one of these big guns is unhappy with a particular product of yours. On the
other hand, if you are selling soap to millions of Indians, you will need a
tool that will analyse the millions upon millions of sales records and tell
you where youre going wrongor right, for that matter. So who does
BI benefit? Banks that lend to individuals (as opposed to specialist banks that
lend primarily to corporate clients), telcos, FMCG companies and organised retail.
So BIs useful, thats pretty much a given. Then why do some BI deployments
leave companies wondering why they ever invested in the ruddy software? The
answer is one with many shades.
First off, no BI solution is going to work unless your data is clean. For that
you need ETL (Extract Transform Load) software to take all the data lying in
your legacy, ERP and other systems. ETL involves scrubbing your data till it
is squeaky clean and accumulating it in data marts or warehouses.
This brings us to our second problem. For BI to be useful you need large data
stores. How large? US retail chains have data warehouses that can top a hundred
Used properly, BI can be a marvellous tool for CIOs to help transform their
companys business by providing vital inputs to business heads. For this,
ideally, BI tools should be tied into a companys extended ERP systems
such as CRM and SCM so that the insights dug up using the BI toolkit can be
translated into action. This could take the form of a marketing campaign organised
using CRM to prevent customer churn at a telco after a BI tool provides a list
of users who are likely to switch loyalties. As the proverb at the top of the
page says, having information on hand, intelligence at your beck and call, is
all very fine. You just have to know when to use it.
Prashant L Rao
Head of Editorial Operations