Description
Innovation In Marketing Management By Using Business Intelligence
INNOVATION IN MARKETING MANAGEMENT BY USING BUSINESS
INTELLIGENCE
Hooman Derakhshanian
1*
, Ali Yadegari
2
Tehran Gharb Payam Noor, Tehran, Iran
*Corresponding Author: [email protected]
ABSTRACT
For a business organization today to be able to sustain in confronting with diverse changes of the market and could
manage the market, it needs to analyze the market. Thus, the organization should update its business processes by
the use of modern technologies, referred to as business intelligence (BI). Along with introducing marketing
management processes, the considerable necessity of innovations and creativity in the processes is discussed in
this article for competing in the global business. Moreover, the definitions of business intelligence from the points
of views of different authors as well as the principles and specifications of BI are expressed. Then, with regards to
different dimensions and functions of BI, the proposed framework is introduced to develop the specifications of
organizations, in order to achieve the BI approach and its benefits in business. Increasing the business domains,
developed presence based on aims in international environment and organizational efficiency are some key
functions to be discussed later in this article. The aim of this article is introducing the practical frame for helping
the organizations to conduct their goals with respect to intelligence. This will lead organizations to obtain proper
and on-time understanding of the market situations.
Key words: Marketing, business intelligence, marketing management .
INTRODUCTION
Regarding the importance of information in
organizational management in recent years and
development of information technology (IT), applied
business systems are established to enable the
companies and institutions to make decisions with
higher knowledge and have higher productivity.
Many companies in the U.S. A. have the positions in
their organizational charts as analyzing manager,
business strategy manager, head or assistant for
information services in the market, all showing the
importance of analyzing the competitive situations.
In today’s world that is extremely competitive and
intensely uncertain, the quality and updating BI in
the organization, not only mean the difference
between profits and losses, but it also describes the
difference between survival and bankruptcy. For
instance, an organization using BI, information and
environmental indices systems to predict the future
could be compared with an organization that is not
using the trend of these activities. Business
intelligence is one of the important concepts of
managements and organizations, being transformed
into a pioneering aspect in global markets, and
provides advantages in all the activities and
processes. Business intelligence is a non-
professional activity, but nevertheless requires
special skills. Thus, pioneering companies in this
regard establish separate sections, called “business
intelligence department”. Organizations and
businesses always try to know what their competitors
do. This notion entered into universities in 1980s.
Some authors argue that Michael Porter (1980), the
well-known researcher in strategic management has
created the concept of BI by introducing the
quintuple competitive forces and general strategies
in that regard. Porter was among the pioneer
specialists of competitor intelligence in 1986,
publishing the first article about competitor
intelligence in 1990. There is a wide spectrum of
technologies for collecting information and
knowledge for an organizational level, as well as
helping the BI process, via analyzing the information
by providing enquiries.
The trend of management is introduced in the next
section, and then the parts ans characteristics of BI
are discussed. After that the functional dimensions of
BI are analyzed, and a framework is proposed later
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
277
for more precise instincts of organizations from
business intelligence and convincing them to use the
relevant principles in their business process.
FUNCTIONAL ELEMENTS IN MARKETING
MANAGEMENT PROCESS
In the field of business and supervising market
evolutions as well as following market changes and
using incentive schemes, smart companies usually
design and develop strategic marketing systems.
Marketing systems providing proper coordination
with the best companies and marketing opportunities
cause better marketing administrations and
managements. The general marketing process
management includes 4 main stages, as follows:
2-1- Market analysis: Environment is complicated
and ever-changing, bringing new opportunities and
threats. The company and its strategic systems
should always be under supervision. The
environment requires a lot of information, such as
consumers and their way of purchasing. This
information includes information systems and
market research as well as evaluation of
organizational consumer markets.
2-1- Selecting target markets: There are various
companies that have created strong diversities in
producing similar goods according to the desire s of
consumers, and no company is able to provide
services to all the dissatisfied consumers. Any
company wanting to use its own potential
capabilities, selecting the best situations in the
market requires analyzing 4 different processes of
measuring and predicting demands, sharing the
market, target market and placement in the market.
2-1- Combination of marketing elements: One of
the main concepts in modern marketing is the
concept of combination, as a set of variables
involved in the market and their aim is combine the
responses to the requirements. Instruments are
organized due to the effects of the combination on
the market. This combination includes designing the
product, distributing the product, pricing and
advertising in the new key markets in the business.
2-1- Considering the market and the competitors’
activities: This stage includes analysis of the
competitors and competing policies in the market,
planning, implementing and organizational
marketing as well as the program control. One
important point for large companies is analyzing
their competitors that continually determine prices
for the products, distributing them and advertising
methods, to extend their competitions.
As the head, the general manager should organize the
organization pyramid marketing programs, and
motivate everyone in all levels. Supervision and
control should also not be forgotten to ensure
execution of programs and the goals.
Marketing process in different layers should pay
special attention to customers as the organization
partners, since organizations have customers and
being sentimental about the company is an important
issue.
BUSINESS INTELLIGENCE (BI)
Different authors have defined the concept of
business intelligence. They believe that BI has
characteristics such as the potential to collect,
process and accumulate information, in such a way
for all the levels in the organization to be able to
access according to their needs, helping them in
future formations, and protect them in competitive
behaviors. The term “business intelligence”,
scientific research in the market and smart
organizations are often used in place of each other.
In brief and clear definition of BI, we could say that
BI includes collecting information about competitors
and providing an environment to create and maintain
the competitive advantage. In fact, intelligence in
business is a systematic process to ensure the
updating of precise information about the
competitors. An intelligent system points to a series
of programs and has a basis to be used by managers
to access the daily information in the marketing
environment.
BI is a series of concepts, methods and processes for
improving business decisions, taking the information
from various resources and using the hypotheses and
experiences for developing a precise understanding
(understanding the dynamicity of business). To
improve the strategic and tactical decisions, analyses
of the data with decision-making supporting systems
are provided to the individuals all over the
organization. By proper BI, the company could
develop the smart decision-making supporting
systems for acquiring the competitive advantage in
the industry.
According to a study in 2001-2006, Baytendijek
(2001) stated that the companies using BI have their
return of investment twice or three times more than
the ones not using business intelligence. In fact, BI
enables managers to have their decisions in
conformity with their knowledge from the market,
investment tactics in business, etc. Thus, tracking the
understanding and responding to the competitors are
proposed as special aspects and are necessary for the
companies to execute an effective plan that is called
business intelligence. The establishing domains of
BI are shown in fig. (1).
BI is recognized as a tool for strategic management
and is a domain that is rapidly growing in the world
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
278
of business. Also, the competitor intelligence is an
important method in creating competitive
advantages, causing an aimed supervision on
strategic decisions in the competitive environment to
be used in an organization.
Fig. (1) Involved sections in BI
Many of the reputable companies such as: General
Electric, Motorola, Microsoft, HP, IBM, Intel, 3m,
Xerox, Chrysler, all use the competitor intelligence
system. Some countries such as France, Japan,
Sweden, and U.S.A have had considerable
development in using BI systems. BI in these
countries is considered as an important factor in
achieving competitive advantage. Even the
University of Lund in Sweden was the first
university offering BI in PhD. The important
elements that are effective in BI are as follows:
- Ability to combine business activities and
analytical IT
- Rate of concentration on occupational skills
in BI and preventing its dispersal
- Creating proper infrastructures for BI
among strategic goals
- Creating proper infrastructures for
competitive organizations
- Precise analysis of BI projects and making
relevant investments
- Promotion of intelligence by organizational
planning
Some researchers classify BI into 3 categories of:
technological intelligence, marketing intelligence
and strategic intelligence that are described as
follows:
1- Technological intelligence: in this type of
intelligence, the cases of cost analysis,
advantage of the present conditions, future
requirements and customers’ preference
from new markets and classification of
creative marketing opportunities are
considered, providing the most important
movements and changes in marketing and
distribution.
2- Strategic intelligence: this type of
intelligence deals with responsibilities in
competitive strategies, in a definite
duration, created from changes in the
competitors’ structures, newly replaced
materials and industry.
3- Marketing intelligence: this information
indicates drawing a graph of the existing
conditions and future needs, customers’
preferences, new markets, classification of
creative marketing opportunities as well as
the most important movements and changes
in marketing and distribution.
BI could be more than these groups; as strategic and
social intelligence could be expanded into details
including laws, financial affairs, tax and economic,
political subjects and human affairs. As a whole, BI
collects more extensive information about scientific
researches in the market, with regards to the analysis
of the conditions and supervising the latest
competitive activities
Parts of intelligence
The tools of intelligence are widely accepted as an
intermediate new software between applied
programs and decision supporting programs. The
potentials of BI includes: decision-making supports,
online analytical processing (OLAP), statistical
analysis, estimation, and data-mining. The parts
establishing BI are as follows:
- Data resources: Data resources could be
databank, historical data, foreign data for
Business activities
IT activities
Management
activities
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
279
example from market research companies
or internet, or information from the existing
data in the existing data storage. Data
resources could be any mutual databanks or
any other data structure following the
business applied programs. They could also
consistent on different operating systems
and could include organized information
such as tables, or organized or disorganized
information including text files, images or
any documentary information.
- Data warehousing: Data warehousing is an
important part of BI, formed according to a
specific subject. Data warehousing
provides the physical distribution of data
for integrating, cleaning, classifying and
enquiring the duties. It can also include
operating data that is defined as an updated
series of used integrated data for
widespread technical decision-making to be
applied in a specific area and includes
current data, and not only a summation of
them.
- Data supply center: A data supply center,
similar to what was described by Inman
(1999) is described as a series of organized
subjects to support the decisions in
accordance with the requirements of a
section. Financial affair, marketing, sales,
etc., each has a data supply center of its
own. The marketing data supply center is
not quite similar to that of other sectors.
Probably, the most important parts are the
hardware, software, data and the programs
forming the data supply center.
- Enquiry and reporting tools: OLAP (online
analytical processing) provides multi-
dimensional views and a summary of
business data, used for reports, analyzing,
modeling and programing for optimizing
the business. OLAP and the tools could be
used for working with data warehousing, or
the data supply center designed for high
level BI systems. This system processes the
required matters for discovery of intentions
and analyzing important factors. The
reporting software prepares connected
views of the data, to inform the
management about the business situation.
There are other BI tools that are used for
storing and analyzing the data, including:
data-mining and data warehousing,
supporting systems for decision-making
and predictions, warehouses and documents
management, knowledge management,
surveying, information projection,
management information systems,
geographical information systems, trend
analysis, and software as a server.
Functions, aims and introducing the business
intelligence framework
The aim of investing in BI is transforming a passive
environment to an active one for working on the data.
The main aim of BI is integrating and automating the
steps and functions, to the possible extent. The other
aim is preparing the data for independent analyses.
The main key of a successful BI system is integrating
the data from many business function systems in the
data warehouse of a company. Only a few companies
have proper organizational data warehouses and so
an extensive effort is made at present to assimilate
the organizational data.
Bersson et al. (2002) express that an emerging
business environment is quite dynamic, and only the
companies with better competitive action could be
successful in getting access to a sustainable market.
Organizations are distinguished for their potentials
in using the information related to the market place,
customers and the necessary functions for investing
in business opportunities. Moss and Eter (2003)
consider BI as integrated formation of applied front-
office and back-office functions. Gangadharan and
Swami (2004) define BI as the architecture of the
institution for compact collection of databanks,
applied programs for supporting decisions, and also
functional programs, providing easy access of
business groups to their business data and allowing
them to have precise decisions for their businesses.
A successful BI joins the business and IT with each
other to help the organization in managing and
creating the business in BI, allocating BI resources
and prioritizing the projects to minimize the risks
from implementing the BI. Moving towards BI
indicates intention of organizations to invest for
using business intelligence. Participation and the
aids of effective BI for the business and integrating
the data includes the following:
- Business is responsible for capturing BI
values
- IT is responsible for providing applied
programs of BI in an effective manner
- Intelligent projects should be budgeted
according to return of investment (ROI)
predictions
- BI specialization should be developed by
the knowledgeable people to business
- BI specialization should be developed by
the knowledgeable people to IT
- Organization should emphasize on
successful implementation of BI
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
280
BI systems provide the possibility of extracting the
existing data in data storages for the strategic
decision-making processes. It is a considerable aid
for the decision making and planning by the future
mangers. Also, BI systems provide the possibility of
making complicated reports for use in strategic
decision layers. To identify the functions, the most
important functions of BI systems are shown in fig.
(2)
Fig. (2) Various resources for data collection
On the other hand, BI systems follow different
missions. Instructions for repetitive works related to
BI (such as analytical management and
simplification) are among such cases for the users.
Also, identifying the domains exposed to risk and
evaluating the effect of strategic actions in
competitor companies are considered as the main
missions of other intelligent programs in an
organization. As a whole, the purpose of competitive
intelligent programs is reducing the uncertainty to
improve management decisions. The cycle of
implementing BI systems is shown in fig. (3).
Fig. (3) Cycle of implementing business intelligence
Implementing BI requires considerable knowledge
of business processes that offsite resources may lack.
This challenge could be responded by using onsite
resources that have valuable roles and the projects
that could identify the knowledge in business. The
offsite resources could be focused for developing
and maintaining activities. The other challenge is
within the potential sensitivity of the involved data
in BI projects. The organization should be assured
about proper security and maintaining the privacy,
when the data is shared.
Moreover, the application of BI systems is increased
between the sections and indeed among the
personnel of BI department. A person is also
Extracting and
collecting data
from different
resources
Operating systems
Customer relations
management (CRM)
Enterprise resource
planning ) ERP (
Accounting systems
Supply chain management
) SCM (
Deployment
of BI
Feasibility and
identification
Expanding the data
storages of the
institution
Creating data
structures
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
281
assigned among the personnel of the BI department
as the intervening person that coordinates the
activities and mechanisms of the organization for
faster response to the changes.
Regarding the given subjects and for the benefits of
organizations and the benefits of the BI system, the
proposed framework is presented in fig. (4). Three
skills regarding business, organization and IT are
effectively used in this framework for implementing
business intelligence. Each of the skills have
considerable effects in implementing process of BI.
Fig. (4) Proposed framework for implementing BI
Business skills: organizations should be able to
quickly analyze market changes for interfacing their
processes with the existing conditions, be able to
prioritize the needs and expectations by different
decision-making tools in accordance with the
various demands of the customers and have strong
strategies.
IT skills: Organizations should provide all the
required infrastructures for updating and identifying,
data collection and receiving the data as well as
storing and maintaining them. They should also be
able to integrate the existing data, supervise BI
programs by the use of IT and effectively help this
process to proceed.
Organizational skills: Organizations should involve
their staff for implementing this new system, create
proper organizational culture and try to implement
step-by-step, since with no adequate attention in this
part, the personnel would resist against new changes.
One the other hand, the organization should have
research and describe the data, and finally analyze
them carefully. In fact the aim in presenting this
framework is introducing the involved ways in
implementing BI. The main themes of this system
are divided into three categories. Thus, the
organizations could provide instructions by
considering their organization and with regards to
the situations in this respect and try to implement the
system in step-by-step basis in order to get enough
profits in future.
Conclusion
The results obtained from the studies show that
measuring the values or the rate of business
intelligence and its effects on an organization is not
quite possible, but there are simpler and more
practical ways to measure the financial and
marketing performance of an organization with BI.
It is to note that one of the most important factors is
return on investment (ROI) in determining the value
of BI. Calculating ROI enables the organization
managers to adjust the priorities for the IT projects
inside the organization. In this method, the
performance of the companies using competitor
Business skills
Strong organizational strategy
Providing the processes
Expectations
Priorities
Developing the decisions
Organizational skills
Analysis and simplification
Research and description
Organizational culture
IT skills
Identifying the needs
Deficiencies
Integrating the data
Supervision programs
Identifying and extracting the data
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
282
intelligence in selling the market shares, dividends
and many more matters is compared with the
companies not using this method.
Due to the importance of measuring the activities and
their roles in the success of organizations, the
mentioned method is quite useful. Generally, the
benefits obtained from full and fundamental
execution of BI system could be summarized as
follows:
Increasing certainty from strategic decisions
Modification of multiple relations in the
organization
Developing the market knowledge
Investing in producing the BI system has many
advantages, including increasing income, getting
new competitive opportunities, obtaining more time
for marketing, increasing customer satisfaction via
CRM, automation of manual processes, increasing
the organizational dexterity, reducing costs and
making decisions for the organization. By the end of
the article it is to note that getting access to precise
and on-time information is similar to an important
wealth for every company. When the BI systems are
designed properly and on the other hand, information
has its potentials in decision-making, the
organization could improve its performances, and
making proper decisions will lead to appropriate
satisfaction.
REFERENCES
1. Nazmaran Eng. Co., 5 approaches of business
intelligence
2. Rouhani S., Mehdi Qazanfari, Framework of
evaluating BI in organization systems
3. Tahmasebi Z., Akbari diavar A., Business
intelligence and organizational comprehensive
decisions
4. Miran Z., Asadpour S., Thesis in BA in
software, Guiding professor: Dr. Yousofkhani
5. Fred R. David.(2011), Strategic Management:
Concepts and Cases, 13th ed., Pearson Prentice
Hall.
6. Peyrot, M., Childs, N., Van Doren, D. And
Allen, K, (2002), "An empirically based model
of competitor intelligence use",
7. Journal of Business Research, Vol. 55 No. 9,
pp.747-758.
8. Maria, F. (2005). "Improving the utilization of
external strategic information", Tampere
University of Technology, Master of
9. Science Thesis.
10. Davis, M. 2002. Using business intelligence for
competitive advantage. CRMToday.
11. Biere, M. (2003). Business intelligence for the
enterprise. Upper Saddle River, NJ: Prentice
Hall PTR
12. Applications", Addison Wesley Longman,
Reading, MA.
13. Gangadharan, G. R., & Swami, S. N. (2004).
Business Intelligence Systems: Design and
Implementation Strategies. 26th
14. International Conference Information
Technology Interfaces (ITI 2004), Croatia, 139-
144.
15. Wilma Viviers, Andrea Saayman,(2005),
"Marie'-Luce Muller Enhancing a competitive
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16. International Journal of Social Economics
Vol.32 No. 7, pp. 576-589.
doc_653597980.pdf
Innovation In Marketing Management By Using Business Intelligence
INNOVATION IN MARKETING MANAGEMENT BY USING BUSINESS
INTELLIGENCE
Hooman Derakhshanian
1*
, Ali Yadegari
2
Tehran Gharb Payam Noor, Tehran, Iran
*Corresponding Author: [email protected]
ABSTRACT
For a business organization today to be able to sustain in confronting with diverse changes of the market and could
manage the market, it needs to analyze the market. Thus, the organization should update its business processes by
the use of modern technologies, referred to as business intelligence (BI). Along with introducing marketing
management processes, the considerable necessity of innovations and creativity in the processes is discussed in
this article for competing in the global business. Moreover, the definitions of business intelligence from the points
of views of different authors as well as the principles and specifications of BI are expressed. Then, with regards to
different dimensions and functions of BI, the proposed framework is introduced to develop the specifications of
organizations, in order to achieve the BI approach and its benefits in business. Increasing the business domains,
developed presence based on aims in international environment and organizational efficiency are some key
functions to be discussed later in this article. The aim of this article is introducing the practical frame for helping
the organizations to conduct their goals with respect to intelligence. This will lead organizations to obtain proper
and on-time understanding of the market situations.
Key words: Marketing, business intelligence, marketing management .
INTRODUCTION
Regarding the importance of information in
organizational management in recent years and
development of information technology (IT), applied
business systems are established to enable the
companies and institutions to make decisions with
higher knowledge and have higher productivity.
Many companies in the U.S. A. have the positions in
their organizational charts as analyzing manager,
business strategy manager, head or assistant for
information services in the market, all showing the
importance of analyzing the competitive situations.
In today’s world that is extremely competitive and
intensely uncertain, the quality and updating BI in
the organization, not only mean the difference
between profits and losses, but it also describes the
difference between survival and bankruptcy. For
instance, an organization using BI, information and
environmental indices systems to predict the future
could be compared with an organization that is not
using the trend of these activities. Business
intelligence is one of the important concepts of
managements and organizations, being transformed
into a pioneering aspect in global markets, and
provides advantages in all the activities and
processes. Business intelligence is a non-
professional activity, but nevertheless requires
special skills. Thus, pioneering companies in this
regard establish separate sections, called “business
intelligence department”. Organizations and
businesses always try to know what their competitors
do. This notion entered into universities in 1980s.
Some authors argue that Michael Porter (1980), the
well-known researcher in strategic management has
created the concept of BI by introducing the
quintuple competitive forces and general strategies
in that regard. Porter was among the pioneer
specialists of competitor intelligence in 1986,
publishing the first article about competitor
intelligence in 1990. There is a wide spectrum of
technologies for collecting information and
knowledge for an organizational level, as well as
helping the BI process, via analyzing the information
by providing enquiries.
The trend of management is introduced in the next
section, and then the parts ans characteristics of BI
are discussed. After that the functional dimensions of
BI are analyzed, and a framework is proposed later
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
277
for more precise instincts of organizations from
business intelligence and convincing them to use the
relevant principles in their business process.
FUNCTIONAL ELEMENTS IN MARKETING
MANAGEMENT PROCESS
In the field of business and supervising market
evolutions as well as following market changes and
using incentive schemes, smart companies usually
design and develop strategic marketing systems.
Marketing systems providing proper coordination
with the best companies and marketing opportunities
cause better marketing administrations and
managements. The general marketing process
management includes 4 main stages, as follows:
2-1- Market analysis: Environment is complicated
and ever-changing, bringing new opportunities and
threats. The company and its strategic systems
should always be under supervision. The
environment requires a lot of information, such as
consumers and their way of purchasing. This
information includes information systems and
market research as well as evaluation of
organizational consumer markets.
2-1- Selecting target markets: There are various
companies that have created strong diversities in
producing similar goods according to the desire s of
consumers, and no company is able to provide
services to all the dissatisfied consumers. Any
company wanting to use its own potential
capabilities, selecting the best situations in the
market requires analyzing 4 different processes of
measuring and predicting demands, sharing the
market, target market and placement in the market.
2-1- Combination of marketing elements: One of
the main concepts in modern marketing is the
concept of combination, as a set of variables
involved in the market and their aim is combine the
responses to the requirements. Instruments are
organized due to the effects of the combination on
the market. This combination includes designing the
product, distributing the product, pricing and
advertising in the new key markets in the business.
2-1- Considering the market and the competitors’
activities: This stage includes analysis of the
competitors and competing policies in the market,
planning, implementing and organizational
marketing as well as the program control. One
important point for large companies is analyzing
their competitors that continually determine prices
for the products, distributing them and advertising
methods, to extend their competitions.
As the head, the general manager should organize the
organization pyramid marketing programs, and
motivate everyone in all levels. Supervision and
control should also not be forgotten to ensure
execution of programs and the goals.
Marketing process in different layers should pay
special attention to customers as the organization
partners, since organizations have customers and
being sentimental about the company is an important
issue.
BUSINESS INTELLIGENCE (BI)
Different authors have defined the concept of
business intelligence. They believe that BI has
characteristics such as the potential to collect,
process and accumulate information, in such a way
for all the levels in the organization to be able to
access according to their needs, helping them in
future formations, and protect them in competitive
behaviors. The term “business intelligence”,
scientific research in the market and smart
organizations are often used in place of each other.
In brief and clear definition of BI, we could say that
BI includes collecting information about competitors
and providing an environment to create and maintain
the competitive advantage. In fact, intelligence in
business is a systematic process to ensure the
updating of precise information about the
competitors. An intelligent system points to a series
of programs and has a basis to be used by managers
to access the daily information in the marketing
environment.
BI is a series of concepts, methods and processes for
improving business decisions, taking the information
from various resources and using the hypotheses and
experiences for developing a precise understanding
(understanding the dynamicity of business). To
improve the strategic and tactical decisions, analyses
of the data with decision-making supporting systems
are provided to the individuals all over the
organization. By proper BI, the company could
develop the smart decision-making supporting
systems for acquiring the competitive advantage in
the industry.
According to a study in 2001-2006, Baytendijek
(2001) stated that the companies using BI have their
return of investment twice or three times more than
the ones not using business intelligence. In fact, BI
enables managers to have their decisions in
conformity with their knowledge from the market,
investment tactics in business, etc. Thus, tracking the
understanding and responding to the competitors are
proposed as special aspects and are necessary for the
companies to execute an effective plan that is called
business intelligence. The establishing domains of
BI are shown in fig. (1).
BI is recognized as a tool for strategic management
and is a domain that is rapidly growing in the world
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
278
of business. Also, the competitor intelligence is an
important method in creating competitive
advantages, causing an aimed supervision on
strategic decisions in the competitive environment to
be used in an organization.
Fig. (1) Involved sections in BI
Many of the reputable companies such as: General
Electric, Motorola, Microsoft, HP, IBM, Intel, 3m,
Xerox, Chrysler, all use the competitor intelligence
system. Some countries such as France, Japan,
Sweden, and U.S.A have had considerable
development in using BI systems. BI in these
countries is considered as an important factor in
achieving competitive advantage. Even the
University of Lund in Sweden was the first
university offering BI in PhD. The important
elements that are effective in BI are as follows:
- Ability to combine business activities and
analytical IT
- Rate of concentration on occupational skills
in BI and preventing its dispersal
- Creating proper infrastructures for BI
among strategic goals
- Creating proper infrastructures for
competitive organizations
- Precise analysis of BI projects and making
relevant investments
- Promotion of intelligence by organizational
planning
Some researchers classify BI into 3 categories of:
technological intelligence, marketing intelligence
and strategic intelligence that are described as
follows:
1- Technological intelligence: in this type of
intelligence, the cases of cost analysis,
advantage of the present conditions, future
requirements and customers’ preference
from new markets and classification of
creative marketing opportunities are
considered, providing the most important
movements and changes in marketing and
distribution.
2- Strategic intelligence: this type of
intelligence deals with responsibilities in
competitive strategies, in a definite
duration, created from changes in the
competitors’ structures, newly replaced
materials and industry.
3- Marketing intelligence: this information
indicates drawing a graph of the existing
conditions and future needs, customers’
preferences, new markets, classification of
creative marketing opportunities as well as
the most important movements and changes
in marketing and distribution.
BI could be more than these groups; as strategic and
social intelligence could be expanded into details
including laws, financial affairs, tax and economic,
political subjects and human affairs. As a whole, BI
collects more extensive information about scientific
researches in the market, with regards to the analysis
of the conditions and supervising the latest
competitive activities
Parts of intelligence
The tools of intelligence are widely accepted as an
intermediate new software between applied
programs and decision supporting programs. The
potentials of BI includes: decision-making supports,
online analytical processing (OLAP), statistical
analysis, estimation, and data-mining. The parts
establishing BI are as follows:
- Data resources: Data resources could be
databank, historical data, foreign data for
Business activities
IT activities
Management
activities
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example from market research companies
or internet, or information from the existing
data in the existing data storage. Data
resources could be any mutual databanks or
any other data structure following the
business applied programs. They could also
consistent on different operating systems
and could include organized information
such as tables, or organized or disorganized
information including text files, images or
any documentary information.
- Data warehousing: Data warehousing is an
important part of BI, formed according to a
specific subject. Data warehousing
provides the physical distribution of data
for integrating, cleaning, classifying and
enquiring the duties. It can also include
operating data that is defined as an updated
series of used integrated data for
widespread technical decision-making to be
applied in a specific area and includes
current data, and not only a summation of
them.
- Data supply center: A data supply center,
similar to what was described by Inman
(1999) is described as a series of organized
subjects to support the decisions in
accordance with the requirements of a
section. Financial affair, marketing, sales,
etc., each has a data supply center of its
own. The marketing data supply center is
not quite similar to that of other sectors.
Probably, the most important parts are the
hardware, software, data and the programs
forming the data supply center.
- Enquiry and reporting tools: OLAP (online
analytical processing) provides multi-
dimensional views and a summary of
business data, used for reports, analyzing,
modeling and programing for optimizing
the business. OLAP and the tools could be
used for working with data warehousing, or
the data supply center designed for high
level BI systems. This system processes the
required matters for discovery of intentions
and analyzing important factors. The
reporting software prepares connected
views of the data, to inform the
management about the business situation.
There are other BI tools that are used for
storing and analyzing the data, including:
data-mining and data warehousing,
supporting systems for decision-making
and predictions, warehouses and documents
management, knowledge management,
surveying, information projection,
management information systems,
geographical information systems, trend
analysis, and software as a server.
Functions, aims and introducing the business
intelligence framework
The aim of investing in BI is transforming a passive
environment to an active one for working on the data.
The main aim of BI is integrating and automating the
steps and functions, to the possible extent. The other
aim is preparing the data for independent analyses.
The main key of a successful BI system is integrating
the data from many business function systems in the
data warehouse of a company. Only a few companies
have proper organizational data warehouses and so
an extensive effort is made at present to assimilate
the organizational data.
Bersson et al. (2002) express that an emerging
business environment is quite dynamic, and only the
companies with better competitive action could be
successful in getting access to a sustainable market.
Organizations are distinguished for their potentials
in using the information related to the market place,
customers and the necessary functions for investing
in business opportunities. Moss and Eter (2003)
consider BI as integrated formation of applied front-
office and back-office functions. Gangadharan and
Swami (2004) define BI as the architecture of the
institution for compact collection of databanks,
applied programs for supporting decisions, and also
functional programs, providing easy access of
business groups to their business data and allowing
them to have precise decisions for their businesses.
A successful BI joins the business and IT with each
other to help the organization in managing and
creating the business in BI, allocating BI resources
and prioritizing the projects to minimize the risks
from implementing the BI. Moving towards BI
indicates intention of organizations to invest for
using business intelligence. Participation and the
aids of effective BI for the business and integrating
the data includes the following:
- Business is responsible for capturing BI
values
- IT is responsible for providing applied
programs of BI in an effective manner
- Intelligent projects should be budgeted
according to return of investment (ROI)
predictions
- BI specialization should be developed by
the knowledgeable people to business
- BI specialization should be developed by
the knowledgeable people to IT
- Organization should emphasize on
successful implementation of BI
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BI systems provide the possibility of extracting the
existing data in data storages for the strategic
decision-making processes. It is a considerable aid
for the decision making and planning by the future
mangers. Also, BI systems provide the possibility of
making complicated reports for use in strategic
decision layers. To identify the functions, the most
important functions of BI systems are shown in fig.
(2)
Fig. (2) Various resources for data collection
On the other hand, BI systems follow different
missions. Instructions for repetitive works related to
BI (such as analytical management and
simplification) are among such cases for the users.
Also, identifying the domains exposed to risk and
evaluating the effect of strategic actions in
competitor companies are considered as the main
missions of other intelligent programs in an
organization. As a whole, the purpose of competitive
intelligent programs is reducing the uncertainty to
improve management decisions. The cycle of
implementing BI systems is shown in fig. (3).
Fig. (3) Cycle of implementing business intelligence
Implementing BI requires considerable knowledge
of business processes that offsite resources may lack.
This challenge could be responded by using onsite
resources that have valuable roles and the projects
that could identify the knowledge in business. The
offsite resources could be focused for developing
and maintaining activities. The other challenge is
within the potential sensitivity of the involved data
in BI projects. The organization should be assured
about proper security and maintaining the privacy,
when the data is shared.
Moreover, the application of BI systems is increased
between the sections and indeed among the
personnel of BI department. A person is also
Extracting and
collecting data
from different
resources
Operating systems
Customer relations
management (CRM)
Enterprise resource
planning ) ERP (
Accounting systems
Supply chain management
) SCM (
Deployment
of BI
Feasibility and
identification
Expanding the data
storages of the
institution
Creating data
structures
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
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assigned among the personnel of the BI department
as the intervening person that coordinates the
activities and mechanisms of the organization for
faster response to the changes.
Regarding the given subjects and for the benefits of
organizations and the benefits of the BI system, the
proposed framework is presented in fig. (4). Three
skills regarding business, organization and IT are
effectively used in this framework for implementing
business intelligence. Each of the skills have
considerable effects in implementing process of BI.
Fig. (4) Proposed framework for implementing BI
Business skills: organizations should be able to
quickly analyze market changes for interfacing their
processes with the existing conditions, be able to
prioritize the needs and expectations by different
decision-making tools in accordance with the
various demands of the customers and have strong
strategies.
IT skills: Organizations should provide all the
required infrastructures for updating and identifying,
data collection and receiving the data as well as
storing and maintaining them. They should also be
able to integrate the existing data, supervise BI
programs by the use of IT and effectively help this
process to proceed.
Organizational skills: Organizations should involve
their staff for implementing this new system, create
proper organizational culture and try to implement
step-by-step, since with no adequate attention in this
part, the personnel would resist against new changes.
One the other hand, the organization should have
research and describe the data, and finally analyze
them carefully. In fact the aim in presenting this
framework is introducing the involved ways in
implementing BI. The main themes of this system
are divided into three categories. Thus, the
organizations could provide instructions by
considering their organization and with regards to
the situations in this respect and try to implement the
system in step-by-step basis in order to get enough
profits in future.
Conclusion
The results obtained from the studies show that
measuring the values or the rate of business
intelligence and its effects on an organization is not
quite possible, but there are simpler and more
practical ways to measure the financial and
marketing performance of an organization with BI.
It is to note that one of the most important factors is
return on investment (ROI) in determining the value
of BI. Calculating ROI enables the organization
managers to adjust the priorities for the IT projects
inside the organization. In this method, the
performance of the companies using competitor
Business skills
Strong organizational strategy
Providing the processes
Expectations
Priorities
Developing the decisions
Organizational skills
Analysis and simplification
Research and description
Organizational culture
IT skills
Identifying the needs
Deficiencies
Integrating the data
Supervision programs
Identifying and extracting the data
GMP Review, 2015; V18(2) Hooman Derakhshanian, Ali Yadegari
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intelligence in selling the market shares, dividends
and many more matters is compared with the
companies not using this method.
Due to the importance of measuring the activities and
their roles in the success of organizations, the
mentioned method is quite useful. Generally, the
benefits obtained from full and fundamental
execution of BI system could be summarized as
follows:
Increasing certainty from strategic decisions
Modification of multiple relations in the
organization
Developing the market knowledge
Investing in producing the BI system has many
advantages, including increasing income, getting
new competitive opportunities, obtaining more time
for marketing, increasing customer satisfaction via
CRM, automation of manual processes, increasing
the organizational dexterity, reducing costs and
making decisions for the organization. By the end of
the article it is to note that getting access to precise
and on-time information is similar to an important
wealth for every company. When the BI systems are
designed properly and on the other hand, information
has its potentials in decision-making, the
organization could improve its performances, and
making proper decisions will lead to appropriate
satisfaction.
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