Description
Business Intelligence Tools For Improve Sales And Profitability
188
Revista Tinerilor Economi?ti (The Young Economists Journal)
BUSINESS INTELLIGENCE TOOLS FOR IMPROVE SALES AND PROFITABILITY
Assoc. Prof Lumini?a ?erb?nescu Ph. D
University of Pite?ti
Faculty of Economics, Pite?ti, Romania
Abstract: Business intelligence (BI) is a broad category of applications
and technologies for gathering, storing, analyzing, and providing access to
data to help enterprise users make better business decisions. BI
applications include the activities of decision support systems, query and
reporting, online analytical processing (OLAP), statistical analysis,
forecasting and data mining. In this article, I will present a BI solution,
implemented through QlikView Application, thanks to which it is possible to
monitor the company sales (by establishing the performance pointers).
JEL classification: M15, M21
Key words: business intelligence, QlickView, management, sales analyses, reports,
statistics
1. Introduction
Business intelligence is an umbrella term that refers to a variety of software
applications used to analyze an organization’s raw data. BI as a discipline is made up of
several related activities, including data mining, online analytical processing, querying
and reporting.
Companies use BI to improve decision making, cut costs and identify new
business opportunities. BI is more than just corporate reporting and more than a set of
tools to coax data out of enterprise systems. An essential facility associated with the BI
Systems is their capacity to connect themselves simultaneously and coherently to many
data bases, which may be different operational systems (accounting, ERP, CRM, SCM,
etc), results of many market researches, activity and access logs, or anything that can be
relevant to the beneficiary organisation, general structured information, but available in
varied formats, from text files to data base structures.
The Business Intelligence solution used accomplishes the following:
- marketing analyses – demographic analyses using information about the
customers and sales records, price sensitivity, preferences for products. The usage of
this information can lead to a better planning of the marketing campaigns and their
effect can be measured.
- sales analyses – identifying tendencies, seasonal analysis, associations
between products. By means of this information sales goals can be set and the progress
can be measured in relation with the goals.
When charting a course for BI, companies should first analyze the way they
make decisions and consider the information that executives need to facilitate more
confident and more rapid decision-making, as well as how they'd like that information
presented to them (for example, as a report, a chart, online, hard copy). Discussions of
189
Business Statistics – Economic Informatics
decision making will drive what information companies need to collect, analyze and
publish in their BI systems..
2. Objectives
Most companies collect a large amount of data from their business operations.
To keep track of that information, a business and would need to use a wide range of
software programs, such as Excel, Access and different database applications for
various departments throughout their organization. Using multiple software programs
makes it difficult to retrieve information in a timely manner and to perform analysis of
the data.
The term Business Intelligence (BI) represents the tools and systems that play a
key role in the strategic planning process of the corporation. These systems allow a
company to gather, store, access and analyze corporate data to aid in decision-making.
Generally these systems will illustrate business intelligence in the areas of customer
profiling, customer support, market research, market segmentation, product
profitability, statistical analysis, and inventory and distribution analysis to name a few.
To stay competitive, businesses need tools to take advantage of opportunities
and avoid risk, in real-time. As a result, business-intelligence and related business-
reporting tools are going through a transformation, driven by business leaders and their
need for visibility into day-to-day operations.
Business intelligence tools, when combined with your operational data, enable
you to:
1. Increase sales using fact-based selling tools.
2. Build profits by targeting profitable activities.
3. Increase customer loyalty and retain customers for life.
In Romania, the market of Business Intelligence solutions, together with that of
ERP solutions (Enterprise Resource Planning), experienced an impressive evolution
due both to the national economical development and to meet the need of companies to
remain competitive on the market.
The work instruments which Business Intelligence applications offer give the
managerial department of the company the possibility to get involved and to begin
analyzing data, without having to wait for the IT departments to hand in complex
reports.
To be more precise, such applications can do many operations and, what is
more, they can be done in various departments of the company. One of the activities
performed by this application is marketing analysis.
3. Methodology
Seven steps to rolling out BI systems:
1. Make sure your data is clean.
2. Train users effectively.
3. Deploy quickly, then adjust as you go. Don't spend a huge amount of time up
front developing the "perfect" reports because needs will evolve as the business
evolves. Deliver reports that provide the most value quickly, and then tweak them.
4. Take an integrated approach to building your data warehouse from the
beginning. Make sure you're not locking yourself into an unworkable data strategy
further down the road.
190
Revista Tinerilor Economi?ti (The Young Economists Journal)
5. Define ROI clearly before you start. Outline the specific benefits you expect
to achieve, then do a reality check every quarter or six months.
6. Focus on business objectives.
7. Don't buy business intelligence software because you think you need it.
Deploy BI with the idea that there are numbers out there that you need to find, and
know roughly where they might be.
The strong engine Business Intelligence of QlikView analysis uses the
revolutionary technology AQL (Associative Query Logic), which accesses structured
information from various sources in an interactive and dynamical way, propelling the
selections of analysis throughout the entire available data basis in order to build an
associative, non-relational and extremely efficient data basis.
AQL offers QlikView the possibility to work with millions of data cells and yet
to answer the questions within less than a second. By replacing the classic relational
technology with AQL, QlikView replaces the need of pre-aggregation of data.
Furthermore it gives the possibility of connecting to any source of data (ERP,
CRM, Microsoft Excel, logs, Access data bases), thus achieving the gathering of the
pieces of information generated by the multitude of independent applications used
within a company.
The application QlikView, an extremely efficient instrument, performs a wide
variety of analyses. I used it to develop a BI solution through which any piece of
information that exists in the company’s database may be used and interpreted in an
integrated context.
Any user/manager may settle his/her own set of analyses and value
consequently that vital information to fulfill his/her responsibilities. Thus the decisions
of each department are based on accurate analyses that use efficiently all available
information of a company.
The graphic interface provides a high interactivity for the users. A few mouse
clicks access immediately general or detailed information.
4. Analyses
To give an example we considered a company that deals with product
distribution. The company has got several warehouses situated at different addresses
and furnishes products to several clients from all over the country. The used
information refers to:
Articles characterized through: Product Code, Product Name, Weight, Product
Group, Group Type;
Customers defined through: Customer Code, Customer Name, Location Code,
Customer Location Name, Customer Group, Customer Group Type, Department,
Town, Invoicing Code;
Invoice heading which comprises: ID, Invoicing Code, Date, Warehouse
Location, Warehouse and Bill
Invoice lines consisting of: ID, Product Code, Quantity and Price.
Part of the reports designed to monitoring the specific sales of the chosen
company are shown below:
1. Q, RON, PM which contains the following graphics:
a) Periodical evolutions. It is a graphic representation of the sales from each
191
Business Statistics – Economic Informatics
month following several dimensions, such as: value, pieces, average price.
Figure no. 1 - Weekly evolution of the average prices
b) The number of clients, products and sales volume. Here we analyze the sales
from the monthly point of view. Figure 2 shows the evolution of the number of
distributed products, but by choosing from a menu there can be drawn diagrams for the
number of customers or for the sales turnover.
From the table adjoining the diagram other selections can be done, for instance
we can choose to draw the diagram for a certain product group, for a certain customer,
for a certain geographical area, for a certain group of customers, etc. In fact these
selections can be done within any spreadsheet built with the aid of QlikView
application.
Figure no. 2 – Monthly evolution of the number of distributed products
c) Comparisons. Here we draw graphics in which we can change axes
depending on the values used. Figure 3 may provide the average prices analysis on
product groups for a certain period of time (year, month, day).
192
Revista Tinerilor Economi?ti (The Young Economists Journal)
Figure no. 3 – Comparisons
d) Top 10 customers. It displays the first ten clients in the order of the sold
values.
Figure no. 4 – Top 10 customers
2. Comparative evolution. The comparative evolution between the average
price and the margin of products for a certain period (day, week, month, semester, year)
is made on two axes(figure 6). At the same time, other comparative evolutions may be
analyzed: between the average price and the sold quantity of products, between the
average price and the number of customers, between the average price and the the
number of sold products etc.
3. The Key Performance Indicators (KPI). The key performance indicators are
important for the teams, managers, or businesses in order to evaluate rapidly the
progress to measurable objectives.
Every business area can choose to follow other types of KPIs, according to the
objectives which are to be fulfilled. For instance, in order to increase the customers’
satisfaction, a calling centre can have as its goal to settle to answer to a specific number
193
Business Statistics – Economic Informatics
of telephone calls in a shorter period of time.
Figure no. 5 - Comparative evolution on two axes between the average price and
the margin
Figure no. 6 - KPI
Another possibility is for the sales department to use KPIs in order to settle
performance objectives, such as the number of the new products sold every month.
Other example of such indicators could be defined:
- the average income on customer;
- sales versus target for every employee of the sales department;
- the success rate (the number of contracts signed of the total).
In the present case, I considered as performance indicators: the products value,
the sold quantity, and the average price and I took into account the days of the current
month and the days of the last month till the same day.
5. Conclusions
Business intelligence systems are contrasted to more classic forms of
information gathering by their interdepartmental focus and their general overview
194
Revista Tinerilor Economi?ti (The Young Economists Journal)
towards business performance. They are also unique in their use of advanced
technology and techniques to mine for data and to crunch that data in the most optimal
manner. While a group in charge of market analysis might have a strong understanding
of the particular sector of the market in which a business operates, their lack of the
same detailed understanding about specific competitors and the inner management of
the company make their information less useful. In a business intelligence model, all
these various forms of business improvement are tied together so that communication is
quick and easy, and each segment helps inform the other segments so their insights are
even more valuable than they would be on their own.
All companies need information in order to make decisions. There is usually
too much data spread in the IT systems of the company, but transforming the data into
information that can be analyzed in order to make decisions is a difficult process. A
Business Intelligence solution makes information accessible to the users who need it:
analysts, and experts – multidimensional analyses, statistics; information consumers –
dynamic interrogations, simple analyses; information users – reports.
Good BI systems need to give context. It's not enough that they report sales
were X yesterday and Y a year ago that same day. They need to explain what factors
influencing the business caused sales to be X one day and Y on the same date the
previous year.
Business intelligence has been used to identify cost-cutting ideas, uncover
business opportunities, roll ERP data into accessible reports, react quickly to retail
demand and optimize prices.
This information system is a Business Intelligence product offers informational
support to those with analysis and decision powers in the „Marketing” and „Sales”
departments. Implementing a business intelligence solution has the following benefits:
- It places at the users’ disposal all relevant information about the business they
need in due time.
- Simplifies the search for complex data and automatizes business processes.
- The solution is adapted to the specific requirements of the organization, unlike
a prefabricated and difficult to adjust one.
- It makes use of the existing technologies: Excel and requires little training as
it is based on the present knowledge of the users.
- It reduces the period of time for decision making, allowing rapid reaction to
changes and generating a competitive advantage.
I believe that, in the future, Business Intelligence solutions will become
indispensable tools in the management of any company since quick and good decisions
will become critical for survival and evolution on the European market. Romania shows
a great potential to assimilate IT solutions, the receptivity for Business Intelligence
solutions becoming more and more obvious both as mentality and practical application
within the Romanian business environment. There are still problems, as there are
Romanian managers that still need to be convinced to adopt global Business
Intelligence solutions.
REFERENCES
1. Ballard, C.,
Herreman, D.,
Schau, D..
Data Modeling Techniques for Data Warehousing,
http://www.redbooks/ibm/com, 1998
195
Business Statistics – Economic Informatics
2. Barrall I.,
Johnson, C.,
Trappe, T.
Intelligent Business, http://www.intelligent-Business.org
3. Imhoff, C. Three Trends in Business Intelligence Technology, 2006,
http://www.b-eye-network.com/view/2608
4. Kimball, R,
Leeves, L.,
Ross, M.
The Data Warehouse Lifecycle Toolkit, John Wiley&Sons, New
York, 1998
5. Negash, S Business Intelligence, Communications of the Association of
Information Systems, vol. 13, 2004, p. 177.195.
6. Pendse, N "Consolidations in the BI industry". The OLAP Report.
http://www.bi-verdict.com/fileadmin/FreeAnalyses/consolidations.
htm, 2008
7.
QWT
Business
Intelligence
Enterprise Script, QlikTech International, Professional Layout,
QlikTech International, http://www.qlikview.com/,
2009
8. * * * http://www.businessobjects.com/
9. * * * http://www.informix.com/
doc_692474129.pdf
Business Intelligence Tools For Improve Sales And Profitability
188
Revista Tinerilor Economi?ti (The Young Economists Journal)
BUSINESS INTELLIGENCE TOOLS FOR IMPROVE SALES AND PROFITABILITY
Assoc. Prof Lumini?a ?erb?nescu Ph. D
University of Pite?ti
Faculty of Economics, Pite?ti, Romania
Abstract: Business intelligence (BI) is a broad category of applications
and technologies for gathering, storing, analyzing, and providing access to
data to help enterprise users make better business decisions. BI
applications include the activities of decision support systems, query and
reporting, online analytical processing (OLAP), statistical analysis,
forecasting and data mining. In this article, I will present a BI solution,
implemented through QlikView Application, thanks to which it is possible to
monitor the company sales (by establishing the performance pointers).
JEL classification: M15, M21
Key words: business intelligence, QlickView, management, sales analyses, reports,
statistics
1. Introduction
Business intelligence is an umbrella term that refers to a variety of software
applications used to analyze an organization’s raw data. BI as a discipline is made up of
several related activities, including data mining, online analytical processing, querying
and reporting.
Companies use BI to improve decision making, cut costs and identify new
business opportunities. BI is more than just corporate reporting and more than a set of
tools to coax data out of enterprise systems. An essential facility associated with the BI
Systems is their capacity to connect themselves simultaneously and coherently to many
data bases, which may be different operational systems (accounting, ERP, CRM, SCM,
etc), results of many market researches, activity and access logs, or anything that can be
relevant to the beneficiary organisation, general structured information, but available in
varied formats, from text files to data base structures.
The Business Intelligence solution used accomplishes the following:
- marketing analyses – demographic analyses using information about the
customers and sales records, price sensitivity, preferences for products. The usage of
this information can lead to a better planning of the marketing campaigns and their
effect can be measured.
- sales analyses – identifying tendencies, seasonal analysis, associations
between products. By means of this information sales goals can be set and the progress
can be measured in relation with the goals.
When charting a course for BI, companies should first analyze the way they
make decisions and consider the information that executives need to facilitate more
confident and more rapid decision-making, as well as how they'd like that information
presented to them (for example, as a report, a chart, online, hard copy). Discussions of
189
Business Statistics – Economic Informatics
decision making will drive what information companies need to collect, analyze and
publish in their BI systems..
2. Objectives
Most companies collect a large amount of data from their business operations.
To keep track of that information, a business and would need to use a wide range of
software programs, such as Excel, Access and different database applications for
various departments throughout their organization. Using multiple software programs
makes it difficult to retrieve information in a timely manner and to perform analysis of
the data.
The term Business Intelligence (BI) represents the tools and systems that play a
key role in the strategic planning process of the corporation. These systems allow a
company to gather, store, access and analyze corporate data to aid in decision-making.
Generally these systems will illustrate business intelligence in the areas of customer
profiling, customer support, market research, market segmentation, product
profitability, statistical analysis, and inventory and distribution analysis to name a few.
To stay competitive, businesses need tools to take advantage of opportunities
and avoid risk, in real-time. As a result, business-intelligence and related business-
reporting tools are going through a transformation, driven by business leaders and their
need for visibility into day-to-day operations.
Business intelligence tools, when combined with your operational data, enable
you to:
1. Increase sales using fact-based selling tools.
2. Build profits by targeting profitable activities.
3. Increase customer loyalty and retain customers for life.
In Romania, the market of Business Intelligence solutions, together with that of
ERP solutions (Enterprise Resource Planning), experienced an impressive evolution
due both to the national economical development and to meet the need of companies to
remain competitive on the market.
The work instruments which Business Intelligence applications offer give the
managerial department of the company the possibility to get involved and to begin
analyzing data, without having to wait for the IT departments to hand in complex
reports.
To be more precise, such applications can do many operations and, what is
more, they can be done in various departments of the company. One of the activities
performed by this application is marketing analysis.
3. Methodology
Seven steps to rolling out BI systems:
1. Make sure your data is clean.
2. Train users effectively.
3. Deploy quickly, then adjust as you go. Don't spend a huge amount of time up
front developing the "perfect" reports because needs will evolve as the business
evolves. Deliver reports that provide the most value quickly, and then tweak them.
4. Take an integrated approach to building your data warehouse from the
beginning. Make sure you're not locking yourself into an unworkable data strategy
further down the road.
190
Revista Tinerilor Economi?ti (The Young Economists Journal)
5. Define ROI clearly before you start. Outline the specific benefits you expect
to achieve, then do a reality check every quarter or six months.
6. Focus on business objectives.
7. Don't buy business intelligence software because you think you need it.
Deploy BI with the idea that there are numbers out there that you need to find, and
know roughly where they might be.
The strong engine Business Intelligence of QlikView analysis uses the
revolutionary technology AQL (Associative Query Logic), which accesses structured
information from various sources in an interactive and dynamical way, propelling the
selections of analysis throughout the entire available data basis in order to build an
associative, non-relational and extremely efficient data basis.
AQL offers QlikView the possibility to work with millions of data cells and yet
to answer the questions within less than a second. By replacing the classic relational
technology with AQL, QlikView replaces the need of pre-aggregation of data.
Furthermore it gives the possibility of connecting to any source of data (ERP,
CRM, Microsoft Excel, logs, Access data bases), thus achieving the gathering of the
pieces of information generated by the multitude of independent applications used
within a company.
The application QlikView, an extremely efficient instrument, performs a wide
variety of analyses. I used it to develop a BI solution through which any piece of
information that exists in the company’s database may be used and interpreted in an
integrated context.
Any user/manager may settle his/her own set of analyses and value
consequently that vital information to fulfill his/her responsibilities. Thus the decisions
of each department are based on accurate analyses that use efficiently all available
information of a company.
The graphic interface provides a high interactivity for the users. A few mouse
clicks access immediately general or detailed information.
4. Analyses
To give an example we considered a company that deals with product
distribution. The company has got several warehouses situated at different addresses
and furnishes products to several clients from all over the country. The used
information refers to:
Articles characterized through: Product Code, Product Name, Weight, Product
Group, Group Type;
Customers defined through: Customer Code, Customer Name, Location Code,
Customer Location Name, Customer Group, Customer Group Type, Department,
Town, Invoicing Code;
Invoice heading which comprises: ID, Invoicing Code, Date, Warehouse
Location, Warehouse and Bill
Invoice lines consisting of: ID, Product Code, Quantity and Price.
Part of the reports designed to monitoring the specific sales of the chosen
company are shown below:
1. Q, RON, PM which contains the following graphics:
a) Periodical evolutions. It is a graphic representation of the sales from each
191
Business Statistics – Economic Informatics
month following several dimensions, such as: value, pieces, average price.
Figure no. 1 - Weekly evolution of the average prices
b) The number of clients, products and sales volume. Here we analyze the sales
from the monthly point of view. Figure 2 shows the evolution of the number of
distributed products, but by choosing from a menu there can be drawn diagrams for the
number of customers or for the sales turnover.
From the table adjoining the diagram other selections can be done, for instance
we can choose to draw the diagram for a certain product group, for a certain customer,
for a certain geographical area, for a certain group of customers, etc. In fact these
selections can be done within any spreadsheet built with the aid of QlikView
application.
Figure no. 2 – Monthly evolution of the number of distributed products
c) Comparisons. Here we draw graphics in which we can change axes
depending on the values used. Figure 3 may provide the average prices analysis on
product groups for a certain period of time (year, month, day).
192
Revista Tinerilor Economi?ti (The Young Economists Journal)
Figure no. 3 – Comparisons
d) Top 10 customers. It displays the first ten clients in the order of the sold
values.
Figure no. 4 – Top 10 customers
2. Comparative evolution. The comparative evolution between the average
price and the margin of products for a certain period (day, week, month, semester, year)
is made on two axes(figure 6). At the same time, other comparative evolutions may be
analyzed: between the average price and the sold quantity of products, between the
average price and the number of customers, between the average price and the the
number of sold products etc.
3. The Key Performance Indicators (KPI). The key performance indicators are
important for the teams, managers, or businesses in order to evaluate rapidly the
progress to measurable objectives.
Every business area can choose to follow other types of KPIs, according to the
objectives which are to be fulfilled. For instance, in order to increase the customers’
satisfaction, a calling centre can have as its goal to settle to answer to a specific number
193
Business Statistics – Economic Informatics
of telephone calls in a shorter period of time.
Figure no. 5 - Comparative evolution on two axes between the average price and
the margin
Figure no. 6 - KPI
Another possibility is for the sales department to use KPIs in order to settle
performance objectives, such as the number of the new products sold every month.
Other example of such indicators could be defined:
- the average income on customer;
- sales versus target for every employee of the sales department;
- the success rate (the number of contracts signed of the total).
In the present case, I considered as performance indicators: the products value,
the sold quantity, and the average price and I took into account the days of the current
month and the days of the last month till the same day.
5. Conclusions
Business intelligence systems are contrasted to more classic forms of
information gathering by their interdepartmental focus and their general overview
194
Revista Tinerilor Economi?ti (The Young Economists Journal)
towards business performance. They are also unique in their use of advanced
technology and techniques to mine for data and to crunch that data in the most optimal
manner. While a group in charge of market analysis might have a strong understanding
of the particular sector of the market in which a business operates, their lack of the
same detailed understanding about specific competitors and the inner management of
the company make their information less useful. In a business intelligence model, all
these various forms of business improvement are tied together so that communication is
quick and easy, and each segment helps inform the other segments so their insights are
even more valuable than they would be on their own.
All companies need information in order to make decisions. There is usually
too much data spread in the IT systems of the company, but transforming the data into
information that can be analyzed in order to make decisions is a difficult process. A
Business Intelligence solution makes information accessible to the users who need it:
analysts, and experts – multidimensional analyses, statistics; information consumers –
dynamic interrogations, simple analyses; information users – reports.
Good BI systems need to give context. It's not enough that they report sales
were X yesterday and Y a year ago that same day. They need to explain what factors
influencing the business caused sales to be X one day and Y on the same date the
previous year.
Business intelligence has been used to identify cost-cutting ideas, uncover
business opportunities, roll ERP data into accessible reports, react quickly to retail
demand and optimize prices.
This information system is a Business Intelligence product offers informational
support to those with analysis and decision powers in the „Marketing” and „Sales”
departments. Implementing a business intelligence solution has the following benefits:
- It places at the users’ disposal all relevant information about the business they
need in due time.
- Simplifies the search for complex data and automatizes business processes.
- The solution is adapted to the specific requirements of the organization, unlike
a prefabricated and difficult to adjust one.
- It makes use of the existing technologies: Excel and requires little training as
it is based on the present knowledge of the users.
- It reduces the period of time for decision making, allowing rapid reaction to
changes and generating a competitive advantage.
I believe that, in the future, Business Intelligence solutions will become
indispensable tools in the management of any company since quick and good decisions
will become critical for survival and evolution on the European market. Romania shows
a great potential to assimilate IT solutions, the receptivity for Business Intelligence
solutions becoming more and more obvious both as mentality and practical application
within the Romanian business environment. There are still problems, as there are
Romanian managers that still need to be convinced to adopt global Business
Intelligence solutions.
REFERENCES
1. Ballard, C.,
Herreman, D.,
Schau, D..
Data Modeling Techniques for Data Warehousing,
http://www.redbooks/ibm/com, 1998
195
Business Statistics – Economic Informatics
2. Barrall I.,
Johnson, C.,
Trappe, T.
Intelligent Business, http://www.intelligent-Business.org
3. Imhoff, C. Three Trends in Business Intelligence Technology, 2006,
http://www.b-eye-network.com/view/2608
4. Kimball, R,
Leeves, L.,
Ross, M.
The Data Warehouse Lifecycle Toolkit, John Wiley&Sons, New
York, 1998
5. Negash, S Business Intelligence, Communications of the Association of
Information Systems, vol. 13, 2004, p. 177.195.
6. Pendse, N "Consolidations in the BI industry". The OLAP Report.
http://www.bi-verdict.com/fileadmin/FreeAnalyses/consolidations.
htm, 2008
7.
QWT
Business
Intelligence
Enterprise Script, QlikTech International, Professional Layout,
QlikTech International, http://www.qlikview.com/,
2009
8. * * * http://www.businessobjects.com/
9. * * * http://www.informix.com/
doc_692474129.pdf