BUSINESS INTELLIGENCE

What is Business Intelligence?

Business intelligence (BI) refers to skills, knowledge, technologies, applications and practices used to help a business to acquire a better understanding of the market behavior and business context. For this purpose it employs collection, integration, analysis, interpretation and presentation of business information to support better business decision making. It is a critical component of a CRM strategy.

Is Business Intelligence strictly a CRM thing?

BI is not only confined to Customer Intelligence but is also found in product, services, supply chain, financial, and human resources intelligence. BI extends along the entire enterprise value chain and has applicability in different forms to both commercial and government enterprises. As customer records grow into millions and customer value rises to the top of the corporate objectives hierarchy, Business Intelligence has grown multifold and has undergone a technological evolution that mirrors the increasing complexity of analytics.

Isn't BI the same as Enterprise Reporting?

BI isnt same as Enterprise reporting. Enterprise reporting is merely the combination of multiple reports from multiple systems using a standard reporting tool and a common delivery platform, which means that it is an impartial information aggregator that grabs already analyzed and interpreted data from multiple sources and neatly ties the data together in a format that makes it readable where as Business intelligence is beyond this and involves the use of an organization's disparate data to provide meaningful information and analysis to employees, customers, suppliers, and partners for more effective decision making.

Is BI the same as Predictive/ Descriptive Analytics?

Business intelligence uses both predictive and descriptive analytics, particularly the former but it isnt the same thing. The analytics features of business intelligence help present that actionable information and help you make decisions. BI takes raw data and turns it into information. It uses complex algorithms on captured data and makes some interpretive sense out of it. This information provides tremendously valuable input for developing the innovations and approaches to improve customer experiences. Some of the general uses of business intelligence according to the OLAP (online analytical processing) Report are: Data warehouse reporting Sales and marketing analysis Planning and forecasting

Financial consolidation Statutory reporting Budgeting Profitability analysis The purpose of business intelligence is not really any different than any combination of predictive and descriptive analytics. The basic purpose is to provide you with a set of results that can help you make a smart business decision.

What are BI's challenges?

The implementation of a BI project is not without challenges and many of the major challenges remain internal. The major nonproduct challenge faced is company politics. Experience has shown that single department implementations are less challenging, but often result in fragmented, nonintegrated approaches that, in the long run, increase interdepartmental issues instead of simplifying them. With any project, the user is very important and the interest of the user must be considered key to project success. The OLAP 3 report indicates that the inability to get users to agree on requirements is a common problem with BI implementations and if the requirements are agreed upon, staying the course without changing the requirements proves difficult. There are technological challenges too. The dispersion of the data sources, the dirtiness of the data and lack of standards for a common data format, the disparate technologies that are being used, the availability of web services or not, the sufficiency of the hardware and software to do the job, the sheer size of the total data available all provide significant challenges to the application of those pesky and complicated analytic algorithms.

BI well done, Customer value received

If you meet the challenges that BI presents in a CRM environment, then the value of the customer Intelligence returned can be immeasurable. It helps you identify four basic customer value categories: Customers to retain These are the high value customers that should get the most attention because they will provide the highest profitability. Customers to acquire These are the customers that have high value potential based on their segments and the relevance of the products or services of the offering company. Customers to grow These are the future high value customers that will become the companys and its partners long term investment. These are strategic accounts. Customers to harvest These are low value, low margin customers or product/service offerings that can be gathered to the bosom of the company by optimized services or pricing with a minimum of effort and investment.

Once you have this information, you have to plan to do something with it, not assume it is another notch in a belt or a thing to be catalogued and forgotten.

The Marketplace grows as the return Increases

The value of BI is becoming apparent to those interested in gleaning customer intelligence as part of their overall CRM initiatives. BI is perhaps the hottest segment of the CRM market in 2004 and promises to be for several more years. It is a market that grew up to $6 billion by 2005. The value of tools in that they help companies understand and influence behavior. Aberdeen group found that approximately 19% of companies implementing BI claims they have met or exceeded their business goals. More than 60% state they have at least largely me their goals. As always, soft nonmonetary benefits were more easily obtainable, and even quantifiable, than hard revenue bearing benefits. Companies that had the data collection tools seemed to be willing to spend between $1 million and $2 million on these analytic applications. In results it was found that those who had deployed them were staggering. While those who were using it could see 30%-70% improvement in response rates.

Business Intelligence begins to Verticalize

Business Objects, perhaps the BI industrys most significant player, has introduced a substantial number of industry-specific business intelligence applications that cover consumer products, communications, energy, financial services, government/public sector, healthcare, manufacturing, pharmaceuticals, and retail. CRM- centric analytics-strong companies like Epiphany, Peoplesoft, Siebel and oracle follow similar industry- specific patterns in their offering including analytics. The idea of vertically smart BI would be to have algorithms that deal with processes that are faithful to their industry only.

Business Intelligence and a real-time future

There is a BI holy grail. The vast majority of BI applications are not real-time at this stage. They run their algorithms at some pre-determined time intervals and then slice and dice appropriately. While well suited long-term planning and identifying customer segment, they are not suited that well for personalized real-time interactivity that most competitive companies want to maintain and gain an edge. The current generation works well with both identifying the state of the current customer database and evaluating the appropriate segments for targeting campaigns.

Personalization = real time

Personalization is basically human touch without the actual interaction with a real human. The best personalized engines are those that provide you with a warm and fuzzy experience and an associated good deal during your sojourn with a company through some

communications medium. E.ppiphany, in the CRM space, has without a doubt the best real-time engine, its interaction Advisor, one of the few that reached for the grail and grabbed it with both hands.

Price Optimization
The newest desire in CRM analytics is Price Optimization. To achieve this, engines and tools provide real-time targeted offers to customers who might be shopping online or who are engaged in direct contact with the vendors. There is cold, hard measurable business value to achieving this objective successfully. Customers accept the offers they are given on the spot, be it online or on-premise. The idea behind these optimization tools and engines is to provide them with the right offers, so that the odds of success increase dramatically.

Price Optimization Requirements

The most important requirement is Good Data. Price Optimization in real time requires a slightly different handling of the good data. The price optimization tool takes all the real-time data and interprets it into actionable components resulting in price adjustments for each specific customer interaction. But the data alone doesnt finally determine the pricing. The pricing is also the make or break component in any deal ultimately. What the price optimization gurus do is identify a price insensitivity band, which simply means the bottom and ceiling range within which customer behavior does not change significantly despite price changes. Once this band is identified, you can begin to look at the historical sales and product information, test out various scenarios of combinations of prices, presentation, commitment, and customer. Price Optimization helps to find the specific scenarios in which the customer is insensitive to small changes in price. The value proposition is excellent; therefore, the results can be juicy good.