Description
Power of Business Intelligence for SVBC
Power of Business Intelligence for SVBC
Author:
Sandy Hofman Aruan
Lu Bing Jie
Vivien Fang Jin
Liu Yang
Faculty of Economics and Commerce
University of Melbourne
18 October, 2004
2
TABLE OF CONTENT
ABSTRACT.......................................................................................................... 3
I. INTRODUCTION.......................................................................................... 4
Business Situation......................................................................................................................................... 4
Business Problems ........................................................................................................................................ 4
Complex business environment ...................................................................................................5
Enormous and unstandardized data ............................................................................................. 6
Solution for the problems ............................................................................................................................ 7
II. BUSINESS INTELLIGENCE........................................................................ 8
Data warehouse............................................................................................................................................. 8
How BI works ............................................................................................................................................... 8
Data mining................................................................................................................................................. 10
Business Objects Solution (BOS)............................................................................................................... 12
III. BUSINESS IMPACT................................................................................... 13
Positive Impact ........................................................................................................................................... 13
Negative Impact.......................................................................................................................................... 15
Limitation.................................................................................................................................................... 16
IV. OPINION AND RECOMMENDATION........................................................ 18
Opinion........................................................................................................................................................ 18
Recommendation........................................................................................................................................ 18
REFERENCES ................................................................................................... 20
3
Abstract
In this report, we look into the problems of SVBC
1
which is a leading shipping
transportation enterprise. SVBC provides container transportation and logistics services
in more than 80 countries around the globe.
Despite of its success, there exist two major problems. One is the complex business
environment within the company which causes inefficient performance. The other
problem is that there is no standard form of data in the company which in turn cripples
managers’ capability to analyse it. The enormous amount of data within SVBC makes
this problem even worse. We explore the above problems and give our suggestions in the
rest of the report.
The system recommended is Business Intelligence (BI) which is realized by
Business Objects. BI allows users to access, integrate, transform, and deliver enterprise
data from any resource for reporting, query and analysis, analytic application and
performance management (Biere, 2003). In our opinion, SVBC can get much more value
from existing information and run the business more efficiently by applying Business
Intelligence system.
However, through the research, we have found that there are still limitations toward
the implementation of the Business Intelligence (BI) system. A stable “electronic-enabled
business environment” is required for optimal BI’s performance. Technology immaturity
also limits BI compatibility in implementation. These limitations should be handled with
care otherwise they would cause collateral negative impacts on business performance.
1
SVBC is a fictitious company based on existing APL and Wallenius Wilhelmsen (W&W) enterprises
which are leading shipping transportation enterprises in the world. All SVBC business situations are
derived from them (APL, 2004) (W&W, 2004).
4
I. Introduction
Business Situation
SVBC has a history of more than 150 years and has hired approximately 12,000
employees worldwide. SVBC’s primary business task is to deal with shipping
instructions, book the shipping instructions, arrange the space on board and deploy
containers for both importers and exporters.
SVBC has built up loyal relationships with a great number of companies,
including Wal-Mart, IKEA, SONY, FORD, NIKE etc., and the account base is still
expanding. SVBC’s service is available to and from North, South and West Asia, the
Americas, Europe, the Middle East, East and Sub-Saharan Africa and Australia.
With the increasing volume of business, its worldwide transportation network and
leading position in the ocean transportation industry have helped to build an enormous
profit, which guarantees steady revenues. However, those steady increasing business
opportunities bring problems to the company’s operation process.
Business Problems
Generally, there is mainly two problems confronted by SVBC management for the last
decade:
1. Complex business environment: due to the tremendous size of the SVBC and
the complicated business environment, SVBC performance has become
inefficient.
5
2. Enormous and unstandardized data: with the expansion of SVBC’s business,
the amount of data and information gathered daily become enormous. Especially,
SVBC is a global enterprise; which makes it even worse. Managers have to spend
more time to extract particular information. Hence, it cripples managers’
capability in producing right and timely decisions. Furthermore, since there is no
standard data representation, the information that finally obtained by decision
makers might have been garbled during the transition.
Complex business environment
SVBC’s large operation scale turns out to be a double-edge sword. While it able
to gain more profit from the economies of scale, it also forced SVBC to confront to a
complicated business environment. For instance, it is arduous for the people working in
different departments to communicate with each other and acquire the relevant
information.
SVBC has six frames of basic transactions in its business system: booking
(shipping instruction) input, routing/service inquiry, freight rate inquiry, Bill of Lading
issue, operation deployment and finance system for account payable and receivable.
The six frames are segregated, people work in different departments have
different authorities to access different transaction. Such as, customer service
representatives should not have authority to access the transaction of freight rate filing
because it is the core strategy of a company, which can only be accessed by salespeople
or managers, likewise this kind of information cannot be exposed to the competitors
either.
6
This situation turns to be a major barrier to the efficient coordination among the
different departments. From the business side, it may affect the service to SVBC
customers. For example, a new customer calls in directly to customer service
representatives to inquire the service, equipment availability and the freight rate, which
are the most critical questions. In the mean time, customer service representatives have
no authority to access the freight rate checking transaction; what they can do is only to
transfer the call to sales representatives. Unfortunately, Sales representatives often are not
available to stay in office all the time because they are supposed to do their sales calls
during the work hour, so our customers often need to call them on their mobile phone!
This circumstance obviously consumes a lot of cost and, in the end, will harm the
company’s performance.
Therefore, SVBC needs an integrated tool within the company that can analyze
overall business situation, and in turn delivers clear pictures to managers on how the
business is going on. Managers then can overview and, in the end, can deliver better
improvement to SVBC’s business.
Enormous and unstandardized data
According to shipping transportation industry, the fundamental data that managers
need to collect periodically would be: the shipping volume, the monthly shipping
schedule, the top 10 and bottom 10 importers and exporters, the new service/withdraw
service and our competitors’ improvement. The problem is, managers often unable to
obtain these data immediately.
Usually, this can happen because the data needed is scattered all around the place.
Much time is needed just to collect and sort the data and this situation seldom slows
7
down managers’ performance. To make matter even worse, the volume of SVBC daily
data processing also increase dramatically due to the global business expansion. Without
an integrated system in all of the function departments, managers can hardly retrieve the
overall information.
Another problem with information analysis is globalization. Globalization makes
the collected data is often not standardized. Different currencies, different languages and
different traditions disable managers’ ability to analyze the data.
All these problems affect managers’ capability to produce right decision
efficiently. Imagine how many barriers are brought to the company if this incapability
affects other business processes.
Therefore, SVBC needs support from a global standardized system, which
includes a standard data acquisition for their service, equipment, freight rate and
customers’ profile in any location of SVBC office in the world.
Solution for the problems
For the problems we addressed above, the research leads us to the technology of
Business Intelligence (BI). We consider BI as a solution for SVBC because of its
capability of providing tools to help decision-makers analyze and standardize their
business environment. As our research went further, we conclude that Business Objects
Solution (BOS) is the best BI system as it is not only fixing the existing problem, but also
may create more potential benefits for SVBC.
8
II. Business Intelligence
Nowadays, definition of business intelligence (BI) has been used in many
different areas with many different interpretations. In a brief, we will use statement from
Ben Gilad for a simple description. BI is a system to help managers make a better
decision on time (Gilad, 1996). BI is designed to retrieve particular information asked by
users in the company’s extensive database and then display that information with a model
or presentation. From this model, managers should have a clear picture about what is
going on within the company. Thus, manager will deliver better decision from it.
Data warehouse
Before we talk more about BI, one term that will be commonly used in this report
is data warehouse. Essentially, data warehouse is a logically consolidated store of data
drawn from one or more sources within the company and/or outside the company (Simon,
2001). While most data warehouses are currently implemented in a single database
instance, it will become increasingly common to find larger complex store of data are
implemented across multiple databases that are logically related to one another. This
situation is called data warehousing environment (Simon, 2001).
How BI works
In order to make BI deliver good analysis, BI needs whole information from the
company. Company usually has all its information scattered around the place. Therefore,
9
three steps need to be done before BI is able to deliver appropriate reports (Simon, 2001).
See figure 1.
Figure 1 – How BI works
Modified from (Simon, 2001)
Figure 1 show in principle how the data is being collected, transformed, and managed.
Basically they are divided to three parts (Simon, 2001), which are:
1. Collecting Data. The first part is collecting data. In this part, all information
around the business process is collected. Interface of each business process will
collect the data and store it in local data warehouse. For example, sales data will
be put in the sales database. This process is called Online Transaction Processing
(OLTP)(SCN Education, 2001). Usually, each process is handled by other
independent systems (hence, it is not handled by BI itself).
Sales Force
Automation
Sales Data
warehouse
Call Center
(CC)
CC Data
warehouse
Supply Chain
System
Supply
chain data
warehouse
Enterprise
Data
warehouse
BI
Software
Extracting and
Gathering Data
Collecting Data
Analyzing Data
ETL Processing Data Mining / Decision
Tree / Neural Networks
10
1. Extracting and Gathering Data. After the local data is collected. Each data
warehouse will transfer the data to the enterprise data warehouse and then
standardized. Therefore, once all data has been transferred, it becomes
standardized. This process is done by Extraction, transformation, and loading
(ETL) processing
3
. After that, the enterprise data warehouse will then manage the
data and put them in a proper place.
2. Analyzing Data. Lastly, since the data has been transferred and standardized, BI
will be able to retrieve and analyze data freely from the enterprise data warehouse.
BI can finish this process by using data mining procedure, decision tree procedure
or neural networks. In Business Objects Solution (BOS), this process can be
accessed online through Online Analytical Processing (OLAP) function
(businessobjects, 2004).
Data mining
Because data mining, decision tree and neural networks are very technical, we
cannot cover all procedures in this report. We will only briefly describe how data mining
is executed so that BI can be viewed to the details. We also choose to describe data
3
Note that sometimes ETL processing can slow down the local data warehouse. This might happen
because it is common that the data that is being transferred is a bulky one. To avoid such problem,
message-oriented middleware (MOM) is invented.
Basically, MOM objective is to divide a one large chunk of data into thousands of messages. Next, these
messages are sent bit by bit so that it will not burden the computer. Normal data transferring requires a
large portion of the computer performance in a one long time. Compare to that, MOM able to manage the
time of message transferring. Hence, the computer will not be burden by ETL processing (Simon, 2001).
11
mining because this procedure is also implemented in BOS which we choose as our
recommended BI system.
Data mining capability is to drill down the information that comes up from
particular query. This enabled BI to focus the information searching down to lowest level.
Look at this problem as an example (Liautaud, 2000). John is a concerned sales
manager. Sales for this year have gone below the target and he is curious what is actually
going on within the company. Therefore, he states below questions to find the root-cause
of this problem and uses BI as his toolkit. See figure 2.
Question Answer
Why are sales below target?
Because we sold less in the western
region.
Why did we sell less in the west?
Because sales of product X dropped
Why did X sales drop?
Because customer complaints
increased.
Why did complaints go up?
Because late deliveries went up 60%
Why did late deliveries go up?
Because 2 trucks were broken.
Figure 2 – Data mining analysis
Excerpted from e-Business Intelligence (Liautaud, 2000)
The above figure shows that, each time an answer comes up, John is not satisfied
because he believes that the answer that he has is not the actual answer of the problem.
Thus, he keeps asking question until finally he find the one that seems to be root-cause of
the problem.
BI is capable of answering John’s questions even though the questions become
more and more specific. This can happen because BI has data mining capability.
12
Data mining is able to resolve queries in a newly found set of data. Hence, data
mining can be repeated continuously on each newly found set of data. This enables BI to
drill down the data to the lowest level.
Business Objects Solution (BOS)
Business Objects is one of the biggest software companies in the world among
other big companies such as MicroStrategy or BroadVision. Similar to any other BI
product, BOS also has the same capabilities to standardize and analyze data. We are
interested in BOS because it has friendlier interface than other companies’ product. BOS
main ideas are to provide users with simple presentation of data and putting all related
information in one display without losing its simplicity (businessobjects, 2004).
Even though BOS interface is simple, BOS still provide the options for users to
drill down each of the information provided. This gives BOS a brand as an easy-to-
understand yet advance BI system.
13
III. Business Impact
Implementation of BI, which in this case will be Business Objects Solution (BOS),
will bring many benefits to SVBC. Mainly, it is because BI can solve the two major
problems. Aside from that, BI also provides many significant benefits to SVBC.
Unfortunately, every coin has two sides; BI may also inflict negative impacts on SVBC’s
daily business caused by its limitations.
Positive Impact
Main benefit from implementing BOS is, of course, solving the two major
problems within SVBC. BOS capability to deeply analyze the data will greatly help
managers’ capability to redesign SVBC’s complex business environment. BOS
implementation also collect the data and standardize the format of data that scattered in
all SVBC’s offices. This will save a lot of managers’ time in gathering the data. Hence,
they will be able to focus more on analyzing the data (businessobjects, 2004).
While BOS is capable of solving SVBC’s problem, BOS also create other benefits.
Business intelligence solutions offer rich visuals and personalized dashboards that make
it easy for business managers to monitor any information that matter. BOS provides early
effective warning to decision maker, preventing management blunders. They also supply
quick and effective analyses to decision maker. All these benefits put together will result
in cost reduction through more effective and responsive management. (businessobjects,
2004). See Figure 3.
14
Figure 3 – Business Objects resourceful dashboard
Taken from www.businessobjects.com
Figure 3 shows clearly, how managers can easily see the current business
behavior. BOS provides warning to managers by displaying the fluctuation in the
business. BOS also shows overall business situation to managers which can be viewed in
more details should managers want to analyze any further. See figure 4.
Provide warning to
managers
Describe clearly the
business situation
15
Figure 4 – Business Objects interactive query analyzer
Taken from www.businessobjects.com
Figure 4 shows that BOS provides an analysis tool for managers to help them
better understand the details of what happening in the company.
Negative Impact
Beyond all the benefits, there are still two significant negative impacts that can be
inflicted by BI:
1. No common sense: BI software sometimes can only analyze the input data as
assistance to our decision making (Liautaud, 2001). It can not present us the
intelligent enough result with consideration of common sense. High level of
decision making still need to be leaved to human beings. For example, most of the
Different query produces
different graph which
help managers to better
understand details
information about their
company
16
commodities shipped from China to USA are stones or cast iron wares, and most
of the containers moved eastbound are 20 feet containers, what is the relation
between them? It is because 20 feet containers are used for heavy cargoes. This is
the kind common sense from work experience that BI may fail to recognize. This
is why SVBC must not depend on BI totally.
2. Loss of control/no exception: This problem is also related to technology’s lack
of common sense. BI treat all data in the system equally while in the real world,
information sometimes no longer valid (Biere, 2003). For example, business
relationship sometimes can be broken by government policy or natural disasters
which prevent any longer relationship. Thus, any information regarding this
relationship will render obsolete and therefore should be removed from
consideration. Obviously, BI cannot recognize such accident and this false input
may cause false analysis or suggestion. This can happen because human loss the
control to decide which data is available for analysis since BI processes all data
just the same.
Limitation
BI dependency on data warehouses makes it impossible to work independently. It
needs to be integrated into enterprise-class applications that have data warehouse
working in background such as CRM or ERP. It would be important for SVBC to find
ways of modifying and extending legacy operational database systems to support BI
initiatives.
However, BOS succeed to outcome this limitation. By building its own
datawarehouse, BOS reduce its dependency from enterprise-class applications.
17
Nonetheless, BOS is unable to completely wipe out its dependency. BOS still need input
from other system. The benefit from this situation is SVBC will have the options to keep
its existing business system which obviously may reduce a lot cost.
Another drawback is that BI definitely needs correct input in order to deliver
correct analysis. Otherwise, BI’s analysis will produce erroneous analysis and even might
bring the company into jeopardy. This limitation should be handled with care as input
accuracy is subjects to human error. Therefore, some sort of controls need to be
implemented to cover this limitation.
18
IV. Opinion and Recommendation
Opinion
Business intelligence is rapidly becoming a major source for the company to
achieve competitive advantage. BI can “Tell users in the company what happened”
through simple reporting and querying function, furthermore, enable users to further
analyze results of reports and queries in order to “ Tell users what happened, and why”
through Online Analytical Processing (OLAP) and data mining (Simon, 2001). In this
way, BI is extremely helpful for SVBC to provide assistance in making effective
decisions and shorten the time it takes to respond the changes of outside economy
environment.
On the other hand, all of things have two sides, so as BI has bring several positive
impacts for companies, there are also still some limitations in this realm. A stable
“electronic-enabled business environment” is required for optimal BI’s performance
(Liautaud, 2000). Technology immaturity also limits BI compatibility in implementation
(Bier, 2003). These limitations might bring result in negative impacts if SVBC believes
and depends on BI totally without attending the existing problems carefully.
Recommendation
Concluding all the positive and negative impacts that BI brings, limitations in it and
SVBC overall conditions, it is recommended that:
1. SVBC needs to implement Business Objects Solution (BOS) as SVBC’s Business
Intelligence system. BOS implementation will fix the two major problems in
19
SVBC and will optimize SVBC managers’ capability to deliver right decision
efficiently. Furthermore, BOS also features data warehousing capability which is
rare among BI developments. This feature enables BOS to stand alone as an
independent system regardless BI’s dependency on enterprise-class systems.
2. In a drawback, SVBC must automate every existing basic transaction process that
has not been automated yet, for optimum BI usage. Otherwise, BI will remain
useless, as no information can be entered into the system.
3. Despite of all its benefits, SVBC will still need human resource to keep control.
Especially, it is because BI still requires correct input before it can deliver correct
analysis which is subjects to human error.
20
References
1. Biere, Mike, Business intelligence for the enterprise, Upper Saddle River, N.J.:
London: Prentice Hall PTR, 2003.
2. Gilad, Ben; Herring, Jan P., The Art and Science of Business Intelligence Analysis:
Part A, JAI Press Inc, 1996
3. Jaworski, Bernard J., Competitive intelligence: creating value for the organization,
Alexandria, VA: Society of Competitive Intelligence Professionals, 1993.
4. Liautaud, Bernard, 1962, e-Business intelligence: turning information into
knowledge and profit, New York: McGraw-Hill, c2001.
5. SCN Education B.V., Data warehousing: the ultimate guide to building corporate
business intelligence, Braunschweig: Vieweg, 2001
6. Simon, Alan R., Data warehousing and business intelligence for e-commerce, San
Francisco, [Calif.]: Morgan Kaufmann, 2001.
7. Business Objects (n.d.). Business Objects Solutions. Retrieved October 1, 2004,
fromhttp://www.businessobjects.com/
8. APL (n.d.). About APL. Retrieved October 1, 2004, fromhttp://www.apl.com/html/about_apl.html
9. Wallenius Wilhelmsen (n.d.). About Us. Retrieved October 1, 2004, fromhttp://www.2wglobal.com/www/aboutUs/index.jsp
doc_674604130.pdf
Power of Business Intelligence for SVBC
Power of Business Intelligence for SVBC
Author:
Sandy Hofman Aruan
Lu Bing Jie
Vivien Fang Jin
Liu Yang
Faculty of Economics and Commerce
University of Melbourne
18 October, 2004
2
TABLE OF CONTENT
ABSTRACT.......................................................................................................... 3
I. INTRODUCTION.......................................................................................... 4
Business Situation......................................................................................................................................... 4
Business Problems ........................................................................................................................................ 4
Complex business environment ...................................................................................................5
Enormous and unstandardized data ............................................................................................. 6
Solution for the problems ............................................................................................................................ 7
II. BUSINESS INTELLIGENCE........................................................................ 8
Data warehouse............................................................................................................................................. 8
How BI works ............................................................................................................................................... 8
Data mining................................................................................................................................................. 10
Business Objects Solution (BOS)............................................................................................................... 12
III. BUSINESS IMPACT................................................................................... 13
Positive Impact ........................................................................................................................................... 13
Negative Impact.......................................................................................................................................... 15
Limitation.................................................................................................................................................... 16
IV. OPINION AND RECOMMENDATION........................................................ 18
Opinion........................................................................................................................................................ 18
Recommendation........................................................................................................................................ 18
REFERENCES ................................................................................................... 20
3
Abstract
In this report, we look into the problems of SVBC
1
which is a leading shipping
transportation enterprise. SVBC provides container transportation and logistics services
in more than 80 countries around the globe.
Despite of its success, there exist two major problems. One is the complex business
environment within the company which causes inefficient performance. The other
problem is that there is no standard form of data in the company which in turn cripples
managers’ capability to analyse it. The enormous amount of data within SVBC makes
this problem even worse. We explore the above problems and give our suggestions in the
rest of the report.
The system recommended is Business Intelligence (BI) which is realized by
Business Objects. BI allows users to access, integrate, transform, and deliver enterprise
data from any resource for reporting, query and analysis, analytic application and
performance management (Biere, 2003). In our opinion, SVBC can get much more value
from existing information and run the business more efficiently by applying Business
Intelligence system.
However, through the research, we have found that there are still limitations toward
the implementation of the Business Intelligence (BI) system. A stable “electronic-enabled
business environment” is required for optimal BI’s performance. Technology immaturity
also limits BI compatibility in implementation. These limitations should be handled with
care otherwise they would cause collateral negative impacts on business performance.
1
SVBC is a fictitious company based on existing APL and Wallenius Wilhelmsen (W&W) enterprises
which are leading shipping transportation enterprises in the world. All SVBC business situations are
derived from them (APL, 2004) (W&W, 2004).
4
I. Introduction
Business Situation
SVBC has a history of more than 150 years and has hired approximately 12,000
employees worldwide. SVBC’s primary business task is to deal with shipping
instructions, book the shipping instructions, arrange the space on board and deploy
containers for both importers and exporters.
SVBC has built up loyal relationships with a great number of companies,
including Wal-Mart, IKEA, SONY, FORD, NIKE etc., and the account base is still
expanding. SVBC’s service is available to and from North, South and West Asia, the
Americas, Europe, the Middle East, East and Sub-Saharan Africa and Australia.
With the increasing volume of business, its worldwide transportation network and
leading position in the ocean transportation industry have helped to build an enormous
profit, which guarantees steady revenues. However, those steady increasing business
opportunities bring problems to the company’s operation process.
Business Problems
Generally, there is mainly two problems confronted by SVBC management for the last
decade:
1. Complex business environment: due to the tremendous size of the SVBC and
the complicated business environment, SVBC performance has become
inefficient.
5
2. Enormous and unstandardized data: with the expansion of SVBC’s business,
the amount of data and information gathered daily become enormous. Especially,
SVBC is a global enterprise; which makes it even worse. Managers have to spend
more time to extract particular information. Hence, it cripples managers’
capability in producing right and timely decisions. Furthermore, since there is no
standard data representation, the information that finally obtained by decision
makers might have been garbled during the transition.
Complex business environment
SVBC’s large operation scale turns out to be a double-edge sword. While it able
to gain more profit from the economies of scale, it also forced SVBC to confront to a
complicated business environment. For instance, it is arduous for the people working in
different departments to communicate with each other and acquire the relevant
information.
SVBC has six frames of basic transactions in its business system: booking
(shipping instruction) input, routing/service inquiry, freight rate inquiry, Bill of Lading
issue, operation deployment and finance system for account payable and receivable.
The six frames are segregated, people work in different departments have
different authorities to access different transaction. Such as, customer service
representatives should not have authority to access the transaction of freight rate filing
because it is the core strategy of a company, which can only be accessed by salespeople
or managers, likewise this kind of information cannot be exposed to the competitors
either.
6
This situation turns to be a major barrier to the efficient coordination among the
different departments. From the business side, it may affect the service to SVBC
customers. For example, a new customer calls in directly to customer service
representatives to inquire the service, equipment availability and the freight rate, which
are the most critical questions. In the mean time, customer service representatives have
no authority to access the freight rate checking transaction; what they can do is only to
transfer the call to sales representatives. Unfortunately, Sales representatives often are not
available to stay in office all the time because they are supposed to do their sales calls
during the work hour, so our customers often need to call them on their mobile phone!
This circumstance obviously consumes a lot of cost and, in the end, will harm the
company’s performance.
Therefore, SVBC needs an integrated tool within the company that can analyze
overall business situation, and in turn delivers clear pictures to managers on how the
business is going on. Managers then can overview and, in the end, can deliver better
improvement to SVBC’s business.
Enormous and unstandardized data
According to shipping transportation industry, the fundamental data that managers
need to collect periodically would be: the shipping volume, the monthly shipping
schedule, the top 10 and bottom 10 importers and exporters, the new service/withdraw
service and our competitors’ improvement. The problem is, managers often unable to
obtain these data immediately.
Usually, this can happen because the data needed is scattered all around the place.
Much time is needed just to collect and sort the data and this situation seldom slows
7
down managers’ performance. To make matter even worse, the volume of SVBC daily
data processing also increase dramatically due to the global business expansion. Without
an integrated system in all of the function departments, managers can hardly retrieve the
overall information.
Another problem with information analysis is globalization. Globalization makes
the collected data is often not standardized. Different currencies, different languages and
different traditions disable managers’ ability to analyze the data.
All these problems affect managers’ capability to produce right decision
efficiently. Imagine how many barriers are brought to the company if this incapability
affects other business processes.
Therefore, SVBC needs support from a global standardized system, which
includes a standard data acquisition for their service, equipment, freight rate and
customers’ profile in any location of SVBC office in the world.
Solution for the problems
For the problems we addressed above, the research leads us to the technology of
Business Intelligence (BI). We consider BI as a solution for SVBC because of its
capability of providing tools to help decision-makers analyze and standardize their
business environment. As our research went further, we conclude that Business Objects
Solution (BOS) is the best BI system as it is not only fixing the existing problem, but also
may create more potential benefits for SVBC.
8
II. Business Intelligence
Nowadays, definition of business intelligence (BI) has been used in many
different areas with many different interpretations. In a brief, we will use statement from
Ben Gilad for a simple description. BI is a system to help managers make a better
decision on time (Gilad, 1996). BI is designed to retrieve particular information asked by
users in the company’s extensive database and then display that information with a model
or presentation. From this model, managers should have a clear picture about what is
going on within the company. Thus, manager will deliver better decision from it.
Data warehouse
Before we talk more about BI, one term that will be commonly used in this report
is data warehouse. Essentially, data warehouse is a logically consolidated store of data
drawn from one or more sources within the company and/or outside the company (Simon,
2001). While most data warehouses are currently implemented in a single database
instance, it will become increasingly common to find larger complex store of data are
implemented across multiple databases that are logically related to one another. This
situation is called data warehousing environment (Simon, 2001).
How BI works
In order to make BI deliver good analysis, BI needs whole information from the
company. Company usually has all its information scattered around the place. Therefore,
9
three steps need to be done before BI is able to deliver appropriate reports (Simon, 2001).
See figure 1.
Figure 1 – How BI works
Modified from (Simon, 2001)
Figure 1 show in principle how the data is being collected, transformed, and managed.
Basically they are divided to three parts (Simon, 2001), which are:
1. Collecting Data. The first part is collecting data. In this part, all information
around the business process is collected. Interface of each business process will
collect the data and store it in local data warehouse. For example, sales data will
be put in the sales database. This process is called Online Transaction Processing
(OLTP)(SCN Education, 2001). Usually, each process is handled by other
independent systems (hence, it is not handled by BI itself).
Sales Force
Automation
Sales Data
warehouse
Call Center
(CC)
CC Data
warehouse
Supply Chain
System
Supply
chain data
warehouse
Enterprise
Data
warehouse
BI
Software
Extracting and
Gathering Data
Collecting Data
Analyzing Data
ETL Processing Data Mining / Decision
Tree / Neural Networks
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1. Extracting and Gathering Data. After the local data is collected. Each data
warehouse will transfer the data to the enterprise data warehouse and then
standardized. Therefore, once all data has been transferred, it becomes
standardized. This process is done by Extraction, transformation, and loading
(ETL) processing
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. After that, the enterprise data warehouse will then manage the
data and put them in a proper place.
2. Analyzing Data. Lastly, since the data has been transferred and standardized, BI
will be able to retrieve and analyze data freely from the enterprise data warehouse.
BI can finish this process by using data mining procedure, decision tree procedure
or neural networks. In Business Objects Solution (BOS), this process can be
accessed online through Online Analytical Processing (OLAP) function
(businessobjects, 2004).
Data mining
Because data mining, decision tree and neural networks are very technical, we
cannot cover all procedures in this report. We will only briefly describe how data mining
is executed so that BI can be viewed to the details. We also choose to describe data
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Note that sometimes ETL processing can slow down the local data warehouse. This might happen
because it is common that the data that is being transferred is a bulky one. To avoid such problem,
message-oriented middleware (MOM) is invented.
Basically, MOM objective is to divide a one large chunk of data into thousands of messages. Next, these
messages are sent bit by bit so that it will not burden the computer. Normal data transferring requires a
large portion of the computer performance in a one long time. Compare to that, MOM able to manage the
time of message transferring. Hence, the computer will not be burden by ETL processing (Simon, 2001).
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mining because this procedure is also implemented in BOS which we choose as our
recommended BI system.
Data mining capability is to drill down the information that comes up from
particular query. This enabled BI to focus the information searching down to lowest level.
Look at this problem as an example (Liautaud, 2000). John is a concerned sales
manager. Sales for this year have gone below the target and he is curious what is actually
going on within the company. Therefore, he states below questions to find the root-cause
of this problem and uses BI as his toolkit. See figure 2.
Question Answer
Why are sales below target?
Because we sold less in the western
region.
Why did we sell less in the west?
Because sales of product X dropped
Why did X sales drop?
Because customer complaints
increased.
Why did complaints go up?
Because late deliveries went up 60%
Why did late deliveries go up?
Because 2 trucks were broken.
Figure 2 – Data mining analysis
Excerpted from e-Business Intelligence (Liautaud, 2000)
The above figure shows that, each time an answer comes up, John is not satisfied
because he believes that the answer that he has is not the actual answer of the problem.
Thus, he keeps asking question until finally he find the one that seems to be root-cause of
the problem.
BI is capable of answering John’s questions even though the questions become
more and more specific. This can happen because BI has data mining capability.
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Data mining is able to resolve queries in a newly found set of data. Hence, data
mining can be repeated continuously on each newly found set of data. This enables BI to
drill down the data to the lowest level.
Business Objects Solution (BOS)
Business Objects is one of the biggest software companies in the world among
other big companies such as MicroStrategy or BroadVision. Similar to any other BI
product, BOS also has the same capabilities to standardize and analyze data. We are
interested in BOS because it has friendlier interface than other companies’ product. BOS
main ideas are to provide users with simple presentation of data and putting all related
information in one display without losing its simplicity (businessobjects, 2004).
Even though BOS interface is simple, BOS still provide the options for users to
drill down each of the information provided. This gives BOS a brand as an easy-to-
understand yet advance BI system.
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III. Business Impact
Implementation of BI, which in this case will be Business Objects Solution (BOS),
will bring many benefits to SVBC. Mainly, it is because BI can solve the two major
problems. Aside from that, BI also provides many significant benefits to SVBC.
Unfortunately, every coin has two sides; BI may also inflict negative impacts on SVBC’s
daily business caused by its limitations.
Positive Impact
Main benefit from implementing BOS is, of course, solving the two major
problems within SVBC. BOS capability to deeply analyze the data will greatly help
managers’ capability to redesign SVBC’s complex business environment. BOS
implementation also collect the data and standardize the format of data that scattered in
all SVBC’s offices. This will save a lot of managers’ time in gathering the data. Hence,
they will be able to focus more on analyzing the data (businessobjects, 2004).
While BOS is capable of solving SVBC’s problem, BOS also create other benefits.
Business intelligence solutions offer rich visuals and personalized dashboards that make
it easy for business managers to monitor any information that matter. BOS provides early
effective warning to decision maker, preventing management blunders. They also supply
quick and effective analyses to decision maker. All these benefits put together will result
in cost reduction through more effective and responsive management. (businessobjects,
2004). See Figure 3.
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Figure 3 – Business Objects resourceful dashboard
Taken from www.businessobjects.com
Figure 3 shows clearly, how managers can easily see the current business
behavior. BOS provides warning to managers by displaying the fluctuation in the
business. BOS also shows overall business situation to managers which can be viewed in
more details should managers want to analyze any further. See figure 4.
Provide warning to
managers
Describe clearly the
business situation
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Figure 4 – Business Objects interactive query analyzer
Taken from www.businessobjects.com
Figure 4 shows that BOS provides an analysis tool for managers to help them
better understand the details of what happening in the company.
Negative Impact
Beyond all the benefits, there are still two significant negative impacts that can be
inflicted by BI:
1. No common sense: BI software sometimes can only analyze the input data as
assistance to our decision making (Liautaud, 2001). It can not present us the
intelligent enough result with consideration of common sense. High level of
decision making still need to be leaved to human beings. For example, most of the
Different query produces
different graph which
help managers to better
understand details
information about their
company
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commodities shipped from China to USA are stones or cast iron wares, and most
of the containers moved eastbound are 20 feet containers, what is the relation
between them? It is because 20 feet containers are used for heavy cargoes. This is
the kind common sense from work experience that BI may fail to recognize. This
is why SVBC must not depend on BI totally.
2. Loss of control/no exception: This problem is also related to technology’s lack
of common sense. BI treat all data in the system equally while in the real world,
information sometimes no longer valid (Biere, 2003). For example, business
relationship sometimes can be broken by government policy or natural disasters
which prevent any longer relationship. Thus, any information regarding this
relationship will render obsolete and therefore should be removed from
consideration. Obviously, BI cannot recognize such accident and this false input
may cause false analysis or suggestion. This can happen because human loss the
control to decide which data is available for analysis since BI processes all data
just the same.
Limitation
BI dependency on data warehouses makes it impossible to work independently. It
needs to be integrated into enterprise-class applications that have data warehouse
working in background such as CRM or ERP. It would be important for SVBC to find
ways of modifying and extending legacy operational database systems to support BI
initiatives.
However, BOS succeed to outcome this limitation. By building its own
datawarehouse, BOS reduce its dependency from enterprise-class applications.
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Nonetheless, BOS is unable to completely wipe out its dependency. BOS still need input
from other system. The benefit from this situation is SVBC will have the options to keep
its existing business system which obviously may reduce a lot cost.
Another drawback is that BI definitely needs correct input in order to deliver
correct analysis. Otherwise, BI’s analysis will produce erroneous analysis and even might
bring the company into jeopardy. This limitation should be handled with care as input
accuracy is subjects to human error. Therefore, some sort of controls need to be
implemented to cover this limitation.
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IV. Opinion and Recommendation
Opinion
Business intelligence is rapidly becoming a major source for the company to
achieve competitive advantage. BI can “Tell users in the company what happened”
through simple reporting and querying function, furthermore, enable users to further
analyze results of reports and queries in order to “ Tell users what happened, and why”
through Online Analytical Processing (OLAP) and data mining (Simon, 2001). In this
way, BI is extremely helpful for SVBC to provide assistance in making effective
decisions and shorten the time it takes to respond the changes of outside economy
environment.
On the other hand, all of things have two sides, so as BI has bring several positive
impacts for companies, there are also still some limitations in this realm. A stable
“electronic-enabled business environment” is required for optimal BI’s performance
(Liautaud, 2000). Technology immaturity also limits BI compatibility in implementation
(Bier, 2003). These limitations might bring result in negative impacts if SVBC believes
and depends on BI totally without attending the existing problems carefully.
Recommendation
Concluding all the positive and negative impacts that BI brings, limitations in it and
SVBC overall conditions, it is recommended that:
1. SVBC needs to implement Business Objects Solution (BOS) as SVBC’s Business
Intelligence system. BOS implementation will fix the two major problems in
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SVBC and will optimize SVBC managers’ capability to deliver right decision
efficiently. Furthermore, BOS also features data warehousing capability which is
rare among BI developments. This feature enables BOS to stand alone as an
independent system regardless BI’s dependency on enterprise-class systems.
2. In a drawback, SVBC must automate every existing basic transaction process that
has not been automated yet, for optimum BI usage. Otherwise, BI will remain
useless, as no information can be entered into the system.
3. Despite of all its benefits, SVBC will still need human resource to keep control.
Especially, it is because BI still requires correct input before it can deliver correct
analysis which is subjects to human error.
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References
1. Biere, Mike, Business intelligence for the enterprise, Upper Saddle River, N.J.:
London: Prentice Hall PTR, 2003.
2. Gilad, Ben; Herring, Jan P., The Art and Science of Business Intelligence Analysis:
Part A, JAI Press Inc, 1996
3. Jaworski, Bernard J., Competitive intelligence: creating value for the organization,
Alexandria, VA: Society of Competitive Intelligence Professionals, 1993.
4. Liautaud, Bernard, 1962, e-Business intelligence: turning information into
knowledge and profit, New York: McGraw-Hill, c2001.
5. SCN Education B.V., Data warehousing: the ultimate guide to building corporate
business intelligence, Braunschweig: Vieweg, 2001
6. Simon, Alan R., Data warehousing and business intelligence for e-commerce, San
Francisco, [Calif.]: Morgan Kaufmann, 2001.
7. Business Objects (n.d.). Business Objects Solutions. Retrieved October 1, 2004,
fromhttp://www.businessobjects.com/
8. APL (n.d.). About APL. Retrieved October 1, 2004, fromhttp://www.apl.com/html/about_apl.html
9. Wallenius Wilhelmsen (n.d.). About Us. Retrieved October 1, 2004, fromhttp://www.2wglobal.com/www/aboutUs/index.jsp
doc_674604130.pdf