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WHAT ROLE DOES ICT PLAYS IN EXCHANGE OF BUSINESS INTELLIGENCE INFORMATION IN VARIOUS RETAIL SHOPS IN CHENNAI
A study submitted in partial fulfillment of the requirements for the degree of
Master of Science in Information Systems
at
THE UNIVERSITY OF SHEFFIELD
by
NAAGOOR HANIFAA SHAIK MOIDEEN
September 2012
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Acknowledgement
I would like to thank my supervisor Dr. Andrew Madden who gave me full support
to do my dissertation and was very patient and kind in explaining some of the main
topics. Without you, I would have not known about the use of business intelligence.
I wanted to thank the managers of the companies who have contributed the primary
data that are essential for my dissertation.
Further more I would like to thank my Father and Brother who helped me to get the
appointments for interview and responds for questionnaires.
Finally, always I would to like to thank god for giving me such an opportunity to do
some research on a specific subject which would be useful for my career.
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Abstract
Background: From the literature Review, it reveals that retail sector in Chennai
have developed to newer level, due to the effect of increasing number of double
income households, rise of new housing areas with the collection of professional
people and development of upper middle class people and increasing power of
purchase. Competition has increased among the retailers to innovate new
technologies in order to improve the business process efficiently.
Aims: This study aims to address the ICT role in exchanging Business intelligence
information in retail shops in Chennai and how the information is exchanged through
ICT.
Methods: A mixed method is used to gather data with both interviews (qualitative)
and questionnaires (quantitative) in an inductive approach. Interviews and
questionnaires were developed in context with the research objectives and distributed
to the managers of retail shops in Chennai. There were 10 retail companies
approached for interviews and got the response rate of 40%. There were 40 retail
companies approached for questionnaires and got the response rate of 55%, even
after using personal influence.
Results: ICT has contributed to various aspects of BI such as analyzing customer
behavior and sale performance, forecasting the demand product, identifying loyal
customers, finding the age of goods to offer a sale promotion. CCTV is used for both
security purposes and analyzing customer behavior. Most of the information is
organized at billing point. However, some of the information such as supplier
performance, employee performance, and competitor analysis are collected manually.
Due to traditional method, some of the potential information gets lost when the
information is converted into actionable plans and it takes time consuming in
decision-making process. In order to prevent the loss of information, there must be
well-trained employees to manage the information relevance to BI and look for the
various analytical tools that are suitable for their business.
Conclusion: Retailers are known for modernization but it needs to be supported with
advanced technologies in this shifting business environment and should have the
capability of understanding the customer needs.
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Table of Contents
Acknowledgement ...................................................................................................... 2
Abstract ....................................................................................................................... 3
LIST OF FIGURES ................................................................................................... 6
Chapter 1: Introduction ............................................................................................ 7
1.1 Background of Study: ...................................................................................... 7
1.2 Problem statement: .......................................................................................... 8
1.3 Objectives of research: .................................................................................... 9
1.4 Research questions: ........................................................................................ 9
Chapter 2: Literature review .................................................................................. 10
2.1 Business Intelligence Concept: ...................................................................... 10
2.2 Contribution of ICT to Business Intelligence .............................................. 12
2.2.1 Data warehouse(DW): ............................................................................... 12
2.2.2 Data mining (DM): .................................................................................... 14
2.2.3 Online Analytical Processing (OLAP): ..................................................... 16
2.2.4 Executive Information System (EIS) : ...................................................... 17
2.2.5 Knowledge Management: ......................................................................... 18
2.3 Use of Business Intelligence (BI) in Retail Sector: ...................................... 20
2.4 Retail Sector in India: .................................................................................... 22
2.5 Retail sector in Chennai: ............................................................................... 24
Chapter 3: Methodology .......................................................................................... 27
3.1 Research approach: ....................................................................................... 27
3.2 Mixed methods: .............................................................................................. 27
3.3. Method of investigation: ............................................................................... 28
3.3.1 Interviews: ................................................................................................. 28
3.3.2 Design of interview questions: .................................................................. 28
3.3.3 Questionnaires: .......................................................................................... 29
3.3.4 Design of the questionnaires: .................................................................... 29
3.4 Research Design: ............................................................................................ 31
3.5 Companies approached: ................................................................................ 32
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Chapter 4: Results .................................................................................................... 34
4.0 Results from Interviews ................................................................................. 34
4.1 Perceptions of BI: ........................................................................................... 34
4.1.1 Influence of using technology on BI: ........................................................ 34
4.1.2 Experience: ................................................................................................ 35
4.2 Uses of BI: ....................................................................................................... 35
4.2.1 Forecasting the demand of products: ........................................................ 36
4.2.2 Analysis of customer behavior: ................................................................. 36
4.2.3 Pricing strategy: ........................................................................................ 37
4.2.4 Supplier performance: ............................................................................... 37
4.2.5 Organizational performance: ..................................................................... 38
4.3 Gathering and organization of BI: ............................................................... 38
4.3.1 Organization of BI: ................................................................................... 38
4.3.2 Role of ICT in collecting and collating BI: ............................................... 39
4.3.3 Role of People in collecting and collating BI: .......................................... 43
4.4 Areas of improvement: .................................................................................. 44
4.4.1 Missing aspects of current BI: ................................................................... 45
4.4.2 Cost factors: .............................................................................................. 45
4.4 Results from Questionnaires ......................................................................... 46
Chapter 5: Discussions ............................................................................................. 58
Chapter 6: Conclusions and recommendations ..................................................... 62
6.1 Conclusion: ..................................................................................................... 62
6.2 Recommendations: ......................................................................................... 63
6.3 Limitations to research: ................................................................................. 64
6.3 Further research: ........................................................................................... 64
Bibliography ............................................................................................................. 65
Appendix A: Interview questions ........................................................................... 73
Appendix B: Questionnaires ................................................................................... 75
Appendix C: interview transcriptions .................................................................... 80
Appendix D: Ethics application form ..................................................................... 90
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LIST OF FIGURES
Figure 1: contributes to business intelligence……………………………………….46
Figure 2: preference to employ more people or invest in IT………………………..47
Figure 3: use of business intelligence……………………………………………….48
Figure 4: usage of software applications…………………………………………...49
Figure 5: areas that use ICT…………………………………………………………50
Figure 6: processing of reports……………………………………………………...51
Figure 7: reports duration…………………………………………………………...52
Figure 8: generation of reports……………………………………………………...52
Figure 9: method of selling products………………………………………………..53
Figure 10: analyzing historical data across organization……………………………54
Figure 11: forecasting stock…………………………………………………………55
Figure 12: approach for collecting and analyzing information……………………..56
Figure 13: problems in using ICT in BI……………………………………………57
Figure 14: business intelligence – turning data into information into action……….11
Figure 15: Research Design…………………………………………………………31
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Chapter 1: Introduction
1.1 Background of Study:
According to Ortiz (2010), Howard Dressner invented the term Business
Intelligence (BI) in the year 1989. Later the concept of business intelligence was
widely used by companies as they started to gather and study the data stored in data
warehouse, Enterprise Resource Planning (ERP) and the other systems.
Pintar et al. (2007) says that in today’s world, the most vital thing for a
successful business is accessing the correct and accurate information at the right time.
Some useful information can be provided to companies with the help of data mining.
According to the Pintar et al. (2007), the different modules that are not in parallel in
data quality and information systems cause a barrier. The right way to present a
genuine issue is by gathering the correct information and a suitable definition.
Gang et al.(2008) says that various international retail companies like Wal-
Mart, Sears etc, have adopted business intelligence system. A large amount of data is
being available due to the increased standards, technologies and automation control
in the domestic retail industry. Pareek (cited in Gang et al, 2008)states that Various
system like ERP, POS, SCM and CRM etc. has implemented in retail industry which
leads to set down a good base for the BI systems. BI system has placed itself to the
service of technology and making decision by using advanced ETL tool, Data mining
(DM) and data warehouse (DW) technologies.
According to Kumaravel & Kandasamy (2012), Currently in many of the
major Indian cities the expansion of retail space, was taking place. The profitability
of any store entirely depends on its real estate value. Organized retailers occupy a lot
of space in India, the malls, and hypermarkets are targeted only towards the
metropolitan cities like Chennai, Mumbai, Bangalore, Kolkata, and Pune. The profit
of retailers depends upon on effectiveness of selling the manufactured brand
products in reality. Therefore, the challenging problem is building up of brand equity
among the retailers.
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Krishnan(2010) states that Chennai, as a choice of ‘retail capital’ seems
surprising, for many, but a lot of favorable factors also do exist supporting Chennai.
In spite of rapidly growing metropolis, Chennai also posses reasonable real estate
value, which is one of the most critical elements for an industry. A dramatic growth
in the industrial sector in recent years and also many MNC’s of both IT sector as
well as outside of it, targeting Chennai, witnesses the high retail value of Chennai
city. A rapid increase in the number of double income households, emergence of new
residential areas with aggregation of professional people, and the growth of the upper
middle class/the nouveau riche, with increased purchasing power are all the effect of
the industrial boom only. It also combined with the increasing need for the touch and
feel shopping particularly for the large migrant population. These are all the factors,
which acted in favor of nurturing the industry.
Retail sector in Chennai have developed to modernize form due to the effect
of industrial boom. Therefore, the competition increases among the retailers in
Chennai. Retailers have to make use of Information and Communication Technology
(ICT) with Business Intelligence (BI) to enhance the business processes in an
efficient manner. Retailers have to classify the role of ICT that can play in
exchanging information relevant to BI. In this study, it will identify the use of ICT in
BI and how well they integrate the potential information using ICT for using BI by
retailers of Chennai.
1.2 Problem statement:
This study focuses mainly on how the retail sectors in Chennai addressing the role of
ICT in the exchange of information in business intelligence of the companies
participating in the study. If they are using the business intelligence, how well they
are using for the business process of their company. It also mainly focuses the
problem of addressing the role of ICT in the retail sectors in Chennai: do the current
practices in business intelligence result in the loss of potential information relevant to
Business intelligence. If there is a loss of information, how well can ICT be used to
prevent or reduce it?. In order to improve the technologies used in business
intelligence of retails sectors in Chennai.
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1.3 Objectives of research:
“Objectives to be considered for the companies participating in the study”
Ø To investigate the current contribution of ICT to business intelligence and to
explore its potential
Ø To investigate how the information relevant to BI exchanged through ICT
Ø To investigate whether the current practices result in loss of potential
information relevant to BI
Ø If there is loss of potential information relevant to BI, could ICT can be used
to prevent or reduce it?
1.4 Research questions:
“Research questions are considered for the companies participating in the study”
Ø What are the current and potential contributions of ICT to business
intelligence?
Ø How is information of relevance to BI exchanged through ICT?
Ø Do the current practices results in loss of potential information relevant to
business intelligence?
Ø If there is an information loss, could ICT have a role in ameliorating it?
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Chapter 2: Literature review
2.1 Business Intelligence Concept:
Watson & Wixom(2007) says that earlier in 1970’s, the first application was
designed for supporting the decision making is Decision support system. It was
similar to the application that is processing transaction or operations e.g. Inventory
control, payroll systems and order entry. After many years, there were many decision
support applications e.g. online analytical processing (OLAP), Executive information
and predictive analytics had raised and extends the domain of decision support.
Especially BI is broadly used to define the analytical applications in the world of
practice.
Gangadharan & Swami (2004) says that BI is a term which encloses a wide
variety of analytical software and solutions for collecting, integrating, analyzing
and providing an approach to the way of information that supports the enterprise
users to make more suitable decisions on business. The term BI encloses the software
for data warehousing, analyzing data, extraction, transformation and loading (ETL),
data query and reporting, data mining, multidimensional or OLAP and visualization.
Gangadharan & Swami (2004) noted the key point “is consolidating data from the
many different enterprise operational systems into an enterprise data warehouse”.
Few organizations have a truly enterprise warehouse because of the wide range of
opportunities of these efforts.
According to Azvine et al. (2006) many general concepts of business
intelligence does not define its term well. BI is considered from different views such
as data reporting and visualization as BI, others add business performance
management extraction with BI, transformation, and integration is focused by
database dealers as BI, statistical analysis and data mining indicates as BI by
analytics dealers. These views clearly define the BI in many aspects. To appropriate
these views, they closely defines the term BI which is all about how to acquire,
approach, understand, determine and converting one of the valuable resource of an
enterprise of raw data into actionable information to enhance better business
performance as shown in figure 11.
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Figure 14: business intelligence – turning data into information into action
source: Azvine et al.(2006)
Zeng et al.(2006) says that Business intelligence is defined as the process of
gathering, analysis, and distributing large amount of information that has a purpose,
reducing the difficulties in making all the strategic decisions. According to Deng et
al. (2008), BI requires technologies, practices, and software applications for
collecting, integrating, determining and presenting the information relevant to
business and to the information itself. The persistence of BI is to help in making
better decision on business by consuming the information from various sources,
handle with some experiences, and assumes to develop a close interpretation of
changes in business. In order to make better decisions at strategic and tactical level,
BI generally combines the data analysis with decision support system to make the
information available to people in the whole organization (Deng et al., 2008).
Subramaniam et al. (2009) states that it must be significant in discovering the
different changes, which is important to business and equating against the changes
that denotes the achievement in business. There are many products in the market to
execute BI e.g. Cognas2 and SAS1. This application uses the back-end information,
which is structured and stored in the data warehouse. Moghimi & Zheng (2009) says
that to establish an environment for BI not only depends upon the methodologies and
technologies, it should also have a well-trained business people to handle it in the
right path. It should be stressed mainly in understanding the necessities of business,
fixing the goal, determining and describing the associated methods with these,
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analyzing the required type of data and knowing the way to start and aim that data
for the analysis of BI (Moghimi &Zheng, 2009).
Jalonen & Lönnqvist(2009) says that BI produces the analyzes and reports on
the current business conditions and internal organizational matters. Analyzes could
be generated consistently and regularly or they can be ad-hoc reports that
corresponds to the particular framework of decision-making process. This
information must be used well by the people responsible for decision-making at
various managerial levels and by experts. The result of the process is produced in
both numbers and text as information.
Javanmard et al.(2011) says that in traditional and Old BI environment, there are
many requirements and challenges. They are:
Ø The information should be useful and efficient manner.
Ø The integration of technologies.
Ø Challenges in communicating BI
Ø Challenges in architecture of BI networks.
Ø Processing needs to be closed to it.
Ø Difficulties in including new data source.
Ø The other challenges are in the data marts such as non-integrated,
independent.
2.2 Contribution of ICT to Business Intelligence
2.2.1 Data warehouse(DW):
According to Wixom & Watson (2004), Data warehouse and business
intelligence both grew as a field in response to new trends in the market, which are
compliance and privacy, handling and controlling the unstructured data and real time,
making decision at tactical level. In addition, they are becoming more enclosed
within the organization’s architecture so the manager should understand how to
develop the organization structures in a suitable way.
Tvrdikova (2007) says that the basic underlying framework for BI application
is formed by data warehouse. Data is stored in data warehouse for longer term in
which the data is collected through classic information systems are gathered in single
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loads. Data can never be erased from a data warehouse but in some case, the data
may be collected in a group or deposit on external media. Data warehouse sources
can be transformed where the data can be stored in various forms or layout and have
a various principles for recording or storing in different media. Data warehouse
architecture has two important concepts namely Independent data marts and
Integrated DW. Independent data marts are the data store, which are independent for
single applications or their some portion of it. Their drawbacks are poor consistency
of individual stores are possible and can make difficulties in loading process. The
other concept of Integrated DW is the data storage are centralized which can promise
a good consistency by making a complete change.
According to Ren (2009), In BI, data warehouse presents the act of following process.
Such as integrating, transforming, combining, cleaning, and storing the data. In
addition, it also includes the data extraction for analyzing and understanding. Ouf et
al., (2011) says that in many cases, BI applications use the data, which are collected
from data warehouse or data marts.
Ramamurthy et al., (2008) states that a data warehouse is a “subject-oriented
integrated time- variant nonvolatile collection of data“ that supports the decision-
making at administrative level and a source to query the enterprise data. To get the
solution for their decisions in business, high-level managers have to carryout the
online analytical processing (OLAP) operations with data warehouse. Thus, the DW
is evolved as the one of the strong supporting tool for decision making in latest years.
According to Gameiro (2011), during the construction of data warehouse,
risks associate will be always with project manager faces the risks and concentrates
on budget limit, time limit and to fulfill the requirements of end users. When
compared with the market products, open source tool has to reduce risk
fundamentally for the license price.
Hua et al., (2012) says that data warehouse system (DWS) has provided the
possible ways to extract and store data in a distributed Datamart, which is
temporarily stored to use it for BI. This kind of data is determined, summarized, and
used internally in decision-making process with Decision Support System (DSS). In
order to fulfill such requirements in an easy way is to build a large number of
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multidimensional datamarts similar to a particular, dependable and subjective
decision-making process from an enterprise DWS. Data cube has to be broadly used
as a data modeling approach in an effective manner to DWS in order to build
multidimensional DWS. Aggregating the multidimensional operations on data
sources of DC can produce the description of subjective decision data from various
ranges and with different constraints.
2.2.2 Data mining (DM):
Wang & Wang (2008) states that data mining is a method of searching
thoroughly through the data in order to find the hidden relationship at earlier time
among the data, which are interesting to the person whom uses the data. DM is being
considered as an organized field. Even though the development of DM there were
some critique recently that states it does not provide anything to the large-scale
businesses. For an example researches in DM has been extended to propose
incremental refinements in association rule algorithm, but only few studies have
described the usage of association rules. Although the DM is being identified to be
potentially efficient tool, but the actual benefits of DM for business intelligence in
not identified fully.
Bose (2009) says that there are different data mining objectives and
techniques are aggregated for the use in order to assure the adaptability and extreme
accuracy that is possible in the process. The most important advantage of DM is to
support the decision making in strategic, operational, and tactical level according to
situations where it causes many changes, influencing prices and uses, affects the
consequence of the policies which a company able to take by decision. The pattern
that is associated with DM understands the information about price and uses of
alternative procedures is visualized in the form of well-known methods such as
decision trees. Organization uses this kind of information to explore new ways for
the development, selecting the most efficient way to attain their goals in business and
to reduce the cost by centralized business process.
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Wei & Qing-pu (2007) says that data mining methods are now used in the following data model. They are
Ø Classification model: Allocated data is distributed to various groups, which
depends upon the quality of commercial data.
Ø Association model: it gives the key description of close connection and
relation to data sets.
Ø Sequence model: this model is mostly used for time-related data in the data
warehouse.
Ø Clustering model: In this model, it divides the data into a various groups by
using the measurement process at certain level. The data that are alike put
into one group and different data are put into one of the groups.
Li et al.,(2009) states that excluding the man- computer cooperative method,
it is very complicated to use the information from data mining to BI. In order to
apply the information effectively from data mining, they tried to construct a
knowledge management system with the support of man-computer cooperative
method that helps the users to find and use the information effectively.
According to Zhang & Tu (2009), the BI application based on knowledge
uses the data mining technology and tools to explore the hidden relationships of data,
processes the data in order to form the information with computer and symbolizes
the information to the decision maker. It has included with the capacity of
penetrating through the data for association relation spontaneously, extracting the
hidden information which is difficult for human brain of decision makers and
denoting them in a understandable form to the decision-makers.
Ren, (2010) says that by developing and finding a data-mining model inside
the BI development studio will get the important value for the enterprise. We can
look through the model to know about the relationship of data and our business and
utilize that information to take the strategic decision. However, significant value will
arise from data mining application, which is subjective to the daily processes of the
company. In order to improve the operations on data mining application we have to
write some code using Microsoft visual studio or with any other choice of
development software by stepping outside the BI development studio.
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2.2.3 Online Analytical Processing (OLAP):
Sugumaran & Bose(1999) states that OLAP and also mentioned as
multidimensional analysis is a term that is used to define about data warehousing
systems, which helps in making decisions. An OLAP system affords the decision
makers in an easiest method of mining the complete data warehouse to get some
interested information. Warehouse data is shared and cubed by decision makers
nearly in any of the methods.
According to Sahay & Ranjan (2008), OLAP offers multidimensional and
short interpretation of commercial data, which is used to report, analyze, develop,
and plan for improving the business. An OLAP methods and tools can be used by
working with DW or data mart, which is considered for high-level enterprise
intelligent system. These kinds of system will process the query, which is necessary
for discovering the current conditions, and examine the dangerous constituents.
Report generating software shows the combined views of data that ropes to keep the
administration up to date about the current condition of their business.
Gang et al. (2008) says that OLAP is a quick method to offer a solution to
analytical queries, which are naturally multidimensional. The mainstream
applications of OLAP are used in commercial reports like marketing, sales,
administration, Business Process Management (BPM), accounting and predicting,
finance and other parallel areas. The foundation for any OLAP system is the idea of
the OLAP cube, which is also known as hypercube or multidimensional cube. It
comprises of numerical data called measures that classifies according to the
dimensions. Usually from the star schema or snowflake schema of tables in relation
database, it generates the cube metadata. Measures and dimension are derived from
the records in the information table and dimension tables as follows.
Ma et al., (2000) says that users can amalgamate the information regarding
business with the help of OLAP for multidimensional analysis through comparative
customized viewing along with analyzing the historic and predictable data. Thus, the
most important technique in the architecture of data warehouse is OLAP. There is an
increasing demand for further refined methods to enable the data warehouse use
along with the increased supportive of the ability of processing DSS and the
increasing size of the data.
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According to Bose(2006), currently multidimensional databases have
developed without any broadly recognized model. Hence, they do not have general
agreement on the fundamentals of and the recognized terminology in
multidimensional modeling. The information available in the multidimensional
database is denoted as multidimensional arrays, which is a general characteristic of
multidimensional databases. Frequently the summary data are formed as
multidimensional data cubes entailing the attributes of measures and dimension.
Hence, the multidimensional data cubes are deliberated as the basic logical or
conceptual model of OLAP though the operation set might differ significantly
between models for data manipulation. Particularly at this level the values of
measure attributes is determined by assuming the value of dimension attributes as
unique.
Habul & Pilav-Velic (2010) noted that OLAP tools are harmonizing solution
while they are developed before the data warehouse concept. OLAP tool depends on
the relational database model and entail the vast numbers of characteristics e.g.
search, computations, various kinds of analysis etc. The key benefit of OLAP tools is
the attribute of supporting transactional processing of data available in the operations
of banks, manufacture, capital markets etc.
According to Pirnau & Botezatu (2010), the reaction time of an application
does not depend on the volume of the database, but it depends on the number of
results, which are shown on the screen. Most of the OLAP applications are dispersed.
OLAP applications must be significant in keeping them fast even though the
database is huge and dispersed as they are essentially communicating with DSS.
2.2.4 Executive Information System (EIS) :
Tvrdikova (2007) states that Executive Information Systems (EIS) have the
capacity to convert the significant size of primary data that is produced by basic
company procedures into reasonable structures which signifies the managing and
making decision in the company.
According to Lungu et al. (2007), EIS systems have the great influence on
characteristic of strategic decisions in order to decrease the time for decision-making
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process. EIS are capable to allow the managers to view the data from different
viewpoint; to drill down and roll up to combined levels, to direct and online query
datasets which helps to explore the new issues that can affect the business process
and to expect and predict the changes that are available inside and outside of the
organization. EIS enhances the characteristics of management by the new technology
and methods to produce the strategic information.
Watson et al.,(1995) notes that mainly the EIS is developed to produce easier
and fast in accessing the core information. This deduction is supported by most of
the features in EIS. The features like drill down in EIS helps to observe the
performance of the organization and identifying the issues in it. The other features
such as color, multiple output forms and several user interfaces supports the
enhanced efficiency by processing the information quickly on the screens. The main
motivation for EIS development is the features that integrate the data from current
database and many sources.
According to Salmeron (2002), EIS advances ahead with respect to the
information that is structured and delivered by transactional processing systems. It
inspires the development of information culture that is more open and active to
enhance the use of strategic resources, which are discarded by organization and
valuable information to support the decision making process at strategic and tactical
level.
2.2.5 Knowledge Management:
According to Ou & Peng (2006), in the 21st century, knowledge has become
the most important quality of an enterprise by the introduction of knowledge
economy. Collecting and effectual service of enterprise knowledge is necessary for
the success of the enterprise. Therefore, by effective detaining and refining the
knowledge to collect business intelligence is the most important for enterprises in the
current knowledge economy. Knowledge Management (KM) is the method of
finding, detaining, sharing, using, distributing, and generating the information.
Knowledge discovery is one of the most important errands of KM.
Cody et al. (2002) says that in order to manage the information excess and to
refine the information that can be leveraged for competitive edge, enterprises have
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put an effort by investing in technology. Particularly BI and KM are the two
technologies have exhibited a good profit on investing in some applications and
getting benefits by great attention of research and development.
Campbell (2006) states that an integrated systematic approach empowers the
best usage of well-timed, précised and related information when it is used in the
organization. It enables the knowledge discovery and innovation, raises the
development of learning organization, and improves the awareness of combining all
the information sources with the individuals, collective knowledge, and experience.
Raisenberger (cited in Herschel & Jones, 2005) finds the resistance of
employee in sharing the knowledge in cultures, where most of the people have
gained by keeping the information with them. This affects the managers to assume
and continue with their inconsistent heuristics and decision models, which does not
include the new existences. To avoid these failures the top-level managers needs
develop to new cultural and reward systems in order to identify and reward the new
acquiring behaviors, facing the whole organization, also to approve, take part, and
lead in sharing the knowledge and stimulating the current situation. Raisenberger
emphases the top-level mangers to lead the strength, to become the change agents of
their organization to model knowledge sharing, raise the principle of continuous
learning and enhance the support the effective KM and BI.
Baars (cited in Weidong et al,2010) note that among BI and KM there are
three levels of integration. They are:
Ø Presentation level integration: it offers a horizontal integration with the joint
user interface
Ø Data level integration: it offers the KM system contents by loading the data
warehouse with associated metadata for the processes in BI.
Ø System level integration: it offers the scattered and reusing the BI analyzing
model by the KM system.
Weidong et al. (2010) noted that many researches show that as the integration
of BI and KM cooperates, new technologies will be evolved such as eClassifier, a
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complete tool for text analyzing, which offers the structure of integrating the
advanced text analysis. The main disadvantage of integration of KM and BI is
separation of data in various management systems and immatureness method for text
analysis.
2.3 Use of Business Intelligence (BI) in Retail Sector:
Ranjan and Bhatnagar (2011) says that BI with the use of Customer
relationship management (CRM) supports the organization to plan the strategy for
service, marketing, and sections in the enterprise. Ranjan and Bhatnagar (2011)
states that “A CRM is the process of evaluating customer data and their behavior
pattern in buying any product to better understand the trends”.
According to Simmers (2004), CRM endorses that customers are the main
investors and used for collect improved vision and understanding the buying
behavior of customers, which supports to develop a competitive edge. Successful
CRM differs on the strategy that focuses customers where the strategy can be applied
with legacy system and methods, which must be used frequently with new methods
and systems.
Chee et al. (2009) says the uses of BI in retail industry, BI application is used
for demand forecasting to produce an estimation of needs for short and long term
based on existing customer data. Its advantages are fulfilling the customer needs. BI
application is not simply used in forecasting of demand products, but also in
observing the worth of customers whom are loyal and about to leave will be analyzed.
This will support to enhance the strategy to recapture the customers.
Linden et al. (cited in Phan and Schmidt, 2009) says that in retailing business,
the most stimulating data mining application is market basket analysis or
recommender system, which uses an item-to-item combined filter technique. This
method is used to examine the products, which a customer likely to buy together in a
market basket or shopping cart. When the retailer knows the customer who buys
together, the recommender system can mention other products. Chris & Brynjolfsson
et al. (cited in Phan and Schmidt, 2009) note that the recommender system selling
the indistinct products as the long tail sensation. Product distribution curve at the
long tail end in which the long tail is an informal name given to it because the
21
required products is low. This method supports the Amazon and Netflix to fulfill the
customer needs for indistinct product, which the traditional stores, will not have
stock.
Dalin (2010) states the basic advantage of retailers makes the suitable
conditions for BI: Point Of Scale (POS) or management information system (MIS)
has the source of customer data, rich capability of business methods, and the capacity
to develop the CRM system. The richest retail customer database is owned by retail
business.
Baars et al.(2008) concludes that the combination of BI and RFID have a
great potential in business which harmonizes outside the improvements of
incremental operations. The advantage and development costs of a BI framework for
integration, cleansing, and analysis of data must be there hence should not be ignored
in evaluating cost and benefits for RFID system.
Hang and Fong (2010) says that in E-commerce, the most significant area is
supply chain management (SCM). Online business transaction develops a vital
model for pricing that can be combined into a “Real-time supply chain management
agent”. Furthermore, the price strategy, as real time supply chain management in the
quickly varying environment needs sensitive and vital association with the
participating entities. RFID is broadly used in advanced field. It is mainly described
as a facilitating technology of automated wireless, contactless for data collecting and
facilitating the real time enterprise. Goods are embedded with RFID tags as they are
carefully watched. Data stream is captured using sensors, now the RFID system is
more conscious about the product information like location and position. When
RFID technology is efficiently used, the real time supervising and gaining visibility
attains the business flows with a quick reaction and great efficient.
According to Mahesh and Sivanandam (2010) , in the (2010) area of
relational marketing, data mining application has extensively supported for the status
of these practices. Few applications that are related within the relational marketing:
Ø Identifying the customer segments, which are mostly possible of respond to
22
embattled selling campaigns such as up selling, cross selling.
Ø Identifying the objective customer segments for retaining movements.
Ø To predict the level of positive response in marketing operations.
Ø Analyzing and understanding the customer’s buying behavior.
Ø Examining the products that are bought together by customers, which are
known as market basket analysis.
Habul and Pilav-Velic (2010) says that Ad hoc reports are used in the
situation when the existing and rapid understanding of company’s processes, is
required without any former planning. Summary reports are provided for the
business at some specific period. Standard reports are produced by applications that
let a convinced flexibility in designing the reports. Their contents are mostly done
with the common spreadsheets associated with figures and charts.
2.4 Retail Sector in India:
Amin (2010) says that in 2006, World Bank conducted an investigation on
1,948 retail stores across 16 states and 41 cities of India. The investigations show
that only 19% of stores uses the computer to manage their business, which shows an
significant change in using the computer throughout the cities and states. The entry
of large-scale retail enterprises, modern retail processes and increased usage of
computers has witnessed the retail sector in India with a rapid change.
In Gartner (2011) press release, it says that BI software market in India has
predicted its income to reach 81.5 million dollars in 2012 in which it has increased as
15.6 % than the previous year. In India, generally the decision is made depends on
either “gut feeling” or on experience of business owners. BI helps the organization to
make more decisions based on reality. It also enhances to increase the income,
innovate faster over small products and developing service, and also capacity to
search the value existing in the business.
Samuel (2008) says that Competition will be the effect of increasing need of
BI, which will be the key handler and observes the SME market, which has a
remarkable growth. Also considers SME’s even though they are in small in size and
uneven occurrences should have the business analytics same as their higher
equivalents have.
23
Jain (2006) says that Indian enterprises have aroused the necessary of
analytical reports, which supports in making a driving decision and moves through a
beneficial and aggressive business. BI solutions have the tremendous capability to
provide the right value and intelligence needed for the organization. There are
various tools in the market for these functions. Today the enterprises are converting
into BI to get the good return on investment (ROI) from ERP and other operational
implementations by revealing the large quantity of data that is amassed in these
systems. Shopper’s stop uses the CRM analysis and operational performance
analysis with BI platform for its selected retail formats.
IT Industry (2011) states the report that in India, gross domestic product
(GDP) had increased over the previous years and a good flow in trading methods
within the main industries has effected the business expansions which has directly
increased the customer base incredibly. As the customer base is increased and
insistence to provide the vast amount of data, is rousing for the necessity of BI and
analytical tools market in India.
Schumpeter (2011) says that currently the organized retail formats accounts
about 7% of the country’s total retail business of 470 billion dollars, which has the
lowest share than the other countries. Mostly Indians do the shopping at the millions
of kirana stores that are independent small-scale departmental shops or buys from
handcart and street vendors. These microbusinesses will sell only the limited
varieties of products with little quantity. They are very small to sell the good deals
with the wholesalers. However, most of the Indians, particularly in rural areas do the
shopping with the kirana stores because they give credits and even ready to provide
small orders.
The Economist (2007) says that India stacks the money for spending after the
moderate growth over the last 15 years with an average of 8% in the last four years.
India has 12 million retailers, which employs more people than the other industry
excluding agriculture. This is a sign of huge requirement, particularly for basic foods
and low price domestic products and for efficiency. India’s sales of 97% are done in
small shop that are owned by families, which the attributes and availability of
products could not be predicted.
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Desai (2010) states in an interview with Kumar Rajagopalan, CEO, of
Retailer Association of India that foreign direct investment (FDI) is required and
RAI supports FDI completely. They have presented the paper regarding FDI to the
government. FDI will get huge amount of money, which is essential for retail sector.
Foreign investors will not do the business directly into the country; they are
collaborated with the local retailers. Retail business is localized though it is
worldwide business. The retailer has to know detailed information of customers. As
India is multifarious, they need to collaborate with the local retailer to know about
the customer, which produces the effective business. They consider that the
worldwide knowledge of retailing is linked with both international funds and Indian
entrepreneurship, which is significantly required for the development of retail sector
in India.
Kurup (2012) reports that retail sectors want the government to expand the
opportunities including FDI within the next few months. This kind of opportunities
will get more private equity players. FDI is personally supported by C.E.O of RAI
and RAI.
2.5 Retail sector in Chennai:
According to Sadasivan (2011), retailers have to enhance the store brands due
to many factors. The key factors are strong competition between the other retailers
based on following terms such as increased number of outlets, and comprehensive
collections, change in customer taste, shortage of advanced products by branded
companies; customer loyalty is unstable, weakening of brand equity of national
brand, access to technology, income margin, discounters pricing method, cost gap of
margin, low trading cost, cost and quality awareness and quality guarantee by
retailers.
A study by Thiruvenkadam and Panchanatham (2011) shows that in choosing
the retail shops, there is a difference in demographic factor, which supports the
earlier studies. In shopping, younger people give more preference for the advertising
and sales promotion; middle-aged group gives preference for price and location, old
aged group’s gives more preference for advertisement and brand image of the stores.
25
Remarkably female shoppers are more sensitive on price and for sales promotion, on
the other side male shopper gives more preference for store’s brand image and
advertisement. Less educated people has been convinced by advertising, sale
promotions than the well-educated people. People who are graduates, postgraduates,
and professionals mostly give more preference to the quality of product and
collections of products but they are less convinced by advertisement and sales
promotion. Generally, lower and middle-income groups are attracted by price and
sales promotions. Store image, advertising, and store ambience has attracted by high-
income groups.
Anuradha and Manohar (2011) say that the customers have been influenced
by globalization concept to display different kind of brands. As the Indians travels
across various countries for jobs and business has experienced various brand of
products and services for them. This indicates the retailers to develop the modern
retailing to improve the life quality. In Chennai, there are many malls expected in
order to match the international outlook. Development of malls indicates the good
growth in economy of a country.
According to Natarajan and Vij (2011), in India, One of the major challenges
of organized retail sector is insufficiency of retail space. Real estate price are
increasing due to the need of organized retail sector, which could affects, its growth.
The growth strategy of organized retail sector by opening many outlets has failed due
the increased rentals followed by a decrease in world economy. Thus, the real estates
are likely to be against the growth of retail sector particularly large format of retailers
around the main metropolitan cities like Chennai, Delhi, Mumbai, and Kolkata.
Ravilochanan and Devi, (2012) says that another outcome of the study is
Income and occupations are the most important issues in selecting the retail shops.
The people who are in high-income group and high profiles go out for the shopping
with their families at weekend at various organized retailers. The most common
problem is the parking facility. This can cause them a lot of time consuming and to
avoid the shop. To overcome these problems, outlets needs to add the facility of valet
parking that saves time for customers in parking, prevents the disorderly parked, and
facilitates the full use of parking space. This can support the retailers to fascinate
more customers to spend time and buy more products in their shops.
26
According to Mahesh and Balamurugan (2011), the retailer has to understand
well about the various factors, which led to purpose and behavior of customer. The
study has been done by keeping the objectives in mind, which results that the
retailers will be trained to know about the purpose and behavior of customer in
shopping. This can support the retailers to climb the high ladder in the market.
Krishnan (2010) says that a survey on the analysis of customer’s monthly
basket shows that the average of the household’s monthly spending on food and
grocery differs throughout the income segments. It has been based on the
dissemination of above 15 lakh households in Chennai throughout the income
segments and regular spends a conservative estimation of around 300 crores of
retailing groceries possible at Chennai.
Sadasivan (2011) says that the online retailers has to build their website in
turn to ensure that it has comfortable ways for the customers. The website should be
build for potential customers to be not confused and to produce a faster delivery
service. In order to inspire more people in online shopping, the leading
telecommunication, and Internet providers must provide a low cost Internet access in
Chennai.
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Chapter 3: Methodology
3.1 Research approach:
Considering the research questions and its objectives, inductive approach is
used as the research approach. Saunders et al. (2006) defines the inductive approach
is the bottom- top approach where the data is examined and gathered and is used as
the source to develop a theory. The research initiates with the identified observations
as a base for expressing hypothesis. It is then used to raise a theory. Inductive
reasoning allows to hidden understanding of the problem when comparing with
deductive approach. Like wise, inductive approach incudes qualitative data that
needs a smaller data sample compared with deductive approach. As the deductive
approach aims to describe what is happening and inductive approach aims to
understand why something is happening. So it is important to choose the approach In
this study, the aim is to understand the reason for happening. To investigate the role
of ICT in exchange of information in BI requires an inductive approach is used to
find the results.
3.2 Mixed methods:
Johnson and Onwuegbuzie (2004) formally defines the mixed method as the
class of research where the “researcher mixes or combines the quantitative and
qualitative research technique, methods, approaches, concepts or language into a
single study” (Johnson and Onwuegbuzie, 2004). Theoretically, Mixed method is the
third wave or third research movement that moves earlier, the model conflicts by
contributing the alternative with reasonable and practical. In addition, it makes uses
of the practical method and system of philosophy. Its reason for the review includes
the usage of induction, deduction, and abduction.
Johnson et al. (2007) says that the design of mixed method is a strategy for a
scientifically difficult investigating process, which composed of qualitative or
quantitative as fundamental constituents that lead the theoretic drive with qualitative
or quantitative as additional constituents. These constituents’ suits consecutively in
the research to improve the description, understanding, and either are conducted
concurrently or serially
Onwuegbuzie and Johnson (2006) state that according to the fundamental
principle of mixed research should frequently include the combining of qualitative
28
and quantitative methods, techniques, and ideas that have a balancing strength and
nonintersecting weakness. It is viewed as broadly as it is not restricted to
triangulation or validation. The word “complementary strengths” means to add all
the strength of qualitative and quantitative research. It implies that setting the
different approaches, techniques and plan together in numerous and innovative ways.
Therefore, the mixed method is used to include the strength of both
qualitative and quantitative methods. In this study, mixed method is used to collect
the data from the retails shops in Chennai.
3.3. Method of investigation:
3.3.1 Interviews:
This study needs an in-depth interview for collecting the primary data. Semi-
structured interview is used to collect the data with open-ended questions as
qualitative method, which helps to have an additional questions depending on
responses. Denscombe (2007) defines the Semi-structured interview embraces more
control on the design of the questions, but still it allows the open ended questions and
can make some reviews throughout the interview. Semi structured interview will
help to recognize the use of ICT in BI in various aspects of retail shops.
3.3.2 Design of interview questions:
Interview questions are attached in the appendix A:
Q1. It aims to analyze the various perceptions and awareness on BI by retailers in
Chennai.
Q2. It aims to analyze the need of BI in retail sector by retailers in Chennai.
Q3. It aims to analyze the various uses of ICT in BI by the retailers and ICT
component used in BI.
Q4. It aims to analyze the value of business in using ICT with BI.
Q5. It aims to analyze the type of information that are collected by retailers in
Chennai.
29
Q6. It aims to analyze the method of collecting the various aspects of information
regarding BI.
Q7. It aims to analyze the usage of information, which is processed through ICT, and
purposes of information.
Q8. It aims to analyze the use of BI, which gives more profit for their business and
helps the business process.
Q9. It aims to analyze the various improvements that are needed to develop their BI
by retailers in Chennai.
Q10. It aims to analyze the various aspects that retailers needed in the current BI and
to analyze their concern about it.
Q11. It aims to analyze the use of ICT in integrating the information relevant to BI
and factors that affect the use of ICT in BI.
3.3.3 Questionnaires:
Questionnaire is used as the quantitative method for this study. It is
considered as the complementary strength for the qualitative data. Mcneill (1985)
states that it is type of quantitative research method, which helps to get the great
amount of data and information from different types of sources with less time
consuming. Bryman (2008) states that questionnaires are the useful tools to gather
data, which respondents answer it as a social survey.
3.3.4 Design of the questionnaires:
Questionnaires are attached in the appendix B.
Q1 aims to analyze the contributions to business intelligence by retailers in Chennai. It also helps to know the types of information used fro BI by retailers in Chennai.
Q2. It aims to analyze the level of retailer’s preference in employing more people or
invest more money in Information Technology.
Q3. It aims to analyze the different approaches in using BI by retailers in Chennai.
30
Q4. It aims to analyze the software application that is used in the business processes.
Q5. It aims to analyze the areas that use ICT and to find the particular area in which the retailers mostly use ICT.
Q6. It aims to analyze the number of retail shop that receives report from the purchase department.
Q7. It aims to analyze the reports that are frequently (time basis) received by retail shops in Chennai.
Q8. It aims to analyze the method of producing the reports by retailers.
Q9. It aims to analyze the methods in selling the product by retailers in Chennai.
Q10. It aims to analyze the level of accessing the historical data information across the different departments in retail shops.
Q11. It aims to analyze the data that is mostly used for forecasting the products when the stock is required.
Q12. It aims to analyze the retail shop’s approach in gathering and analyzing the information.
Q13. It aims to analyze the problems that are mostly faced in using ICT during business processes.
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3.4 Research Design:
Figure 15: research design
Inductive Approach
Mixed Method Qualitative method
Quantitative method
Interview (Data collection)
Questionnaires (Data Collection)
Inductive Analysis
Inductive Analysis
Presenting the Results
Draw the Conclusion
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3.5 Companies approached:
In this study, the main aim is to investigate the role of ICT in exchanging
information to BI in retail shops in Chennai. This study needs the data from the retail
shops for investigation particularly in Chennai. Hence, the companies have been
approached for interviewing the top-level manager of the company. In Chennai,
retail shops are almost busy every day. It was very difficult to have an appointment
for interviewing the managers, as they were very busy with their works. Using the
influential of personal contacts, there were few companies have accepted to give an
appointment for giving the interview. Initially, the interview was planned to take
through phone. Some of them were busy, tired and so many issues. Some of them did
not want to give the interview about business intelligence as they feel that this might
be sensitive and confidential issue. The following table shows the companies that are
approached and accepted to take part in the interview in terms of size and type of
product they sell.
Size of the
company
Type of business Number of
companies
approached for
interview
Number of
companies
accepted to give
interview
Medium Food & groceries 2 0
Large Textile 4 2
Medium Furniture 2 1
Medium Electronics 2 1
Total 10 4
In total, four companies accepted to give interview about the BI. In which,
two companies accepted to give interview through phone, and other two company
accepted to exchange through mail. Four companies are represented as company A
(textile), B (textile), C (Electronics) and D (furniture).
33
As the study requires more reliable data, questionnaires were designed with closed
ended questions, which take less time to give the responses. It has to be distributed to
many companies in order get the reliable data. The companies were approached with
information sheet and questionnaires. The following table shows the company that
are approached and accepted to give responses to questionnaires.
Size of the
company
Type of business Number of
companies
approached for
questionnaires
Number of
companies
accepted to give
responses for
questionnaires.
Large Food & groceries 4 2
Textile 8 6
Apparels 3 1
Medium Textile 7 4
Small Groceries 2 2
Textile 5 3
Furniture
3 1
Optical lens 2 1
Fitness equipment 3 1
Electronics 3 1
Total 40 22
In total, forty companies were approached for questionnaires and 22
companies responded for the questionnaires. These were helpful in analyzing the
data.
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Chapter 4: Results
4.0 Results from Interviews
4.1 Perceptions of BI:
The interviewees have expressed their views on perception of BI in terms of
nature and functions. The 50% of the interviewees have expressed their perception
on BI in terms of nature as collecting data from sales points, collecting and analyzing
the various parts if information in the business processes.
“Business intelligence for us is essentially collecting data from sales points”
(interview A)
“According to me business intelligence is like kind of collecting and analyzing the
major and minor part of information in the business processes” (interview D)
The other 50% of the interviewees have expressed in terms of function as
process of collecting, storing, analyzing and providing an approach to data, and
collecting and integrating the knowledgeable information to prepare various reports.
“users make better business decisions by simplifying the processes of gathering,
storing, analyzing, and providing access to data.”(Interview B)
“which involves in collecting and integrating the knowledgeable information for
various reports.” (Interview C)
4.1.1 Influence of using technology on BI:
The interviewees of the company have expressed their views on using
technology with BI. The interviewee wanted to have data support rather than
depending directly on perception of fact and the employees managing the sales. This
shows the importance of analyzing the data using the technology. “data backed
manner rather than on gut feel and also irrespective of the person handling the
sales.”(Interview A)
It also enhances the decision making process by using applications and
technologies. “Business intelligence is those applications and technologies that help
35
enterprise users make better business decisions”(Interview B)
In today’s business environment, BI is used with technologies in analyzing
the business process. “However, today it is used as technology, which helps to
analyze the various business processes” (Interview D). Therefore, most of the
interviewees can see value in using technology in BI with more advantages to
improve the business processes. (Literature review)
4.1.2 Experience:
From the four interviews of manager of the A, B, C, and D company, 75% of
interviewees did not the express the influence of experience on BI. Only One of the
interviewees had said about having more experience in the retail sector, also
collecting and analyzing the various aspects of business process would support in
decision-making.
“kind of collecting and analyzing the major and minor part of information in the
business processes throughout the enterprise and also having more experience in the
field, which helps to make decisions at right time” (interview D)
In the figure 1, in the 22 companies only eight companies have indicated
experience for the contribution to BI. The 75% of the interviewees and nearly 65%
of the questionnaires did not indicate the contribution of experience to BI. This
shows that retailers are not really depending on experiences. Therefore, experience
does not play an important role in today’s shifting business environment. (Literature
review)
4.2 Uses of BI:
All the interviewees of the company have stated the benefits in using BI for
their retail business.
“sale point, which can be used to infer various trends- which product is fast moving ,
what is the quantity of purchase done on an average by customers, does a discount
work i.e. translate to sales”(Interview A)
The uses of BI are the following:
• It understands the various trends in retail sector
36
• To identify the fast moving products
• It also analyzes the average purchase done by customers
• It translates the offers of sale promotion into sales process for billing.
“that help enterprise users make better business decisions by simplifying the
processes of gathering, storing, analyzing, and providing access to data.”(Interview
B)
“which helps to make decisions at right time.”(Interview C)
• It makes business process easier to help in decision-making at right time.
In figure 3: it shows the usage of BI in retail sector. From the responds of 22
companies through questionnaires, 13 companies have indicated the use of BI by
collecting, analyzing, and integrating the information into actionable plans. It shows
the potential use of BI among the retailers in Chennai.
4.2.1 Forecasting the demand of products:
Most of the interviewees have mentioned the use of forecasting the products
in retail business. One of the interviewee says that forecasting the product is used to
improve the customer satisfaction by selling the products that are needed by the
customers “BI is really needed for forecasting the products that are needed for the
customers”(Interview D). Some uses the forecasting of product for increasing the
operating margin of their business “BI can be used to increase operating margin
such as forecasting the product” (interview C). They wanted to sell the fast moving
products, which increases the sales performance “which can be used to infer various
trends- which product is fast moving”(interview A).
In figure 11, forecasting the products needed by customers is mostly based on
sales history and current stock. In which 14 companies have indicated sales history
and 16 companies have indicated current stock for forecasting the product. The
responds from 22 companies have mostly mentioned the sales history and current
stock to forecast the product.
4.2.2 Analysis of customer behavior:
Most of the Interviewees say that they collect the information regarding customer
behavior for the use of BI. It helps to increase the operating margin of the company
37
“BI can be used to increase operating margin such as… analyzing the customer
behavior”(Interview C) and make the business processes in an efficient manner
“Also to analyze the change in customer buying behavior that makes the business
processes effective” (Interview D). One of the interviewee says that they collect
information regarding customer experiences and feedbacks of the product through
online terminal “Information such as customer experiences and product feedback is
collected through an online terminal called the xxxx signature experience. (Interview
B)
In the figure 1: From the responds of 22 companies through questionnaires,
17 companies have indicated the indicators of customer satisfaction for the
contributions to BI. This indicates the use of analyzing the customer behavior for BI.
4.2.3 Pricing strategy:
The 50 % of the four interviewees says that they use pricing strategy to sell
their products to customers. Pricing strategy is important to sell the products in retail
business as the value lies in delivering the product between manufacturer and
consumer “purchase and pricing being the most important of all as the value
addition lies in delivery of goods from the manufacture /agent to the end user in the
cheapest manner”(Interview A). Pricing strategy also supports to attain the customer
satisfaction with better quality “We mainly think to attain the customer satisfaction
with quality and minimum pricing strategy” (interview C). Therefore, the retailers
use the pricing strategy to sell at low price and attain customer satisfaction with
better quality.
4.2.4 Supplier performance:
The interviewee of the company C says that they collect the information
regarding supplier performance for the use of BI. “We also collect the information
regarding the supplier performance.”(Interview C). Supplier performance is
analyzed in the basis of quality of products and time of delivering the product by
suppliers “ Supplier performance is analyzed by the quality and distribution time of
the products”(interview C). Company C is an electronic retailer. The product must
be available in the shop when the customer wanted to buy the product when it is
advertised in media “As we are electronic retailer, we wanted to make sure the
specific product is available in the shop because customer is influenced by the
38
advertisement of the particular product. So it is very important to analyze the
supplier performance”(Interview C).
In the figure 11, to forecast the product they are giving importance to the
current stock and sales history. Only seven out of twenty two companies depends on
the supplier performance. Mostly the companies did not depend on the supplier
performance for the use of BI because it depends upon the type of products they sell.
4.2.5 Organizational performance:
Three out of four interviewees of the company have mentioned the use of BI
in organizational performance. BI is used to observe the performance of the
organization “This helps the decision makers of a retail organization to monitor the
organizational performance” (Interview B) and inform their shareholders about the
current performance of the company “use this information to communicate to its
shareholders about the ongoing performance”(Interview B). It also enhances the
performance level of the organization “and performance levels over time”(Interview
B). To improve their performance they wanted to depend on the technology in this
competitive edge “we need to depend on the modern technologies to improve our
performance in this competitive business environment” (interview C). There must a
technological support in order to improve the organizational performance “To
improve the organizational performance, there must be technological support for the
organization” (interview D). Therefore, retailers use BI to improve organizational
performance with the support of technology, informing their shareholders in this
competitive business environment.
4.3 Gathering and organization of BI:
4.3.1 Organization of BI: All the interviewees of the company have mentioned the collecting of
information from various sources. They sell the product directly to the customers “In
a business like ours, which involves selling garments directly to customers, we need
to keep a tab on information”(interview B) and collect the information at the billing
point through invoice by price, quantity; brand preferred by customer and sale
promotion responses. Based on the invoice details they are collecting the information
“The major point of information collection happens to be the billing point. At this
39
point data relevant to the purchase is collected from the invoice – price, quantity,
brand preference, and affinity towards discounts”(Interview A). Customer data is
collected when they buy the product at the billing point and stored in the database
with the product details, customer details (interview C). We collect and store the
customer information while they buy the product and product sales details through
databases we have (interview D). This shows that the billing point is the main
terminal for collecting information for various aspects of BI.
The interviewee of the company C says that they collect the information regarding
competitors particularly on pricing strategy, changes in customer behavior and
performance of the suppliers “We need to collect the information regarding
competitors particularly on pricing strategy, changes in customer behavior “We also
collect the information regarding the supplier performance” (Interview C).
Interviewee of the company D says that they organize the information that are
collected on all their outlets based on customer and product details and collect the
information regarding the feedback of the products and service and performance of
the employees “Collecting the customer information and product sales details of all
our branches; customer feedbacks about the product and service, employee’s
performance”(Interview D). Therefore, every organization is collecting the
information from various sources to use BI in an efficient manner.
4.3.2 Role of ICT in collecting and collating BI:
All of the interviewees of the company have mentioned the potential use of
ICT in BI. Company A started to use ICT as billing machines and it has now
developed more that the billing machines due to the enormous flow of data in real
time. It was now possible because of the cheaper electronics “Yes, we started with
billing machines- they have turned much more than that as the data flow is now
seamlessly real time thanks to cheaper electronics” (Interview A). They have a
complete sales view of their branches at any time. This gives the feedback in an
efficient manner in which they can respond to each branch in a concerned way from
the central office. It clearly expresses the views on use of ICT in BI, as it is now
possible with an extensive manner to respond quickly “across our various branches
we have a unified view of sales at all time now. What this leads to is giving us a
faster feedback system to which we can respond also in the concerned manner as the
40
communication system to each branch from our central office in now possible in a
blanket manner”(interview A).
Company B also use ICT in business intelligence such as E-mail, xxxxx TV.
E-mail is commonly used to communicate and exchange information with the other
branches. xxxxx TV stores the information across the branches in India like sales,
unique products, customer feedbacks, tailoring needs. The ICT used to enhance BI
with the unique information across all other branches “We Use ICT. The kinds of
Information’s Communications Technology used in our Business Intelligence are
Email for communicating and exchanging information, XXXX TV- A company
initiative that records information about the sales, unique products, customer
complaints, and tailoring etc. from across retail outlets in India”(interview B).
ICT is used for collecting and storing the large volume of information “we
use ICT in business intelligence, which needs to collect and store the large volume of
data”(interview C).
ICT is used for efficient business processes as they have large number of
customer data. They use a centralized database server, which is integrated with BI
software. It stores the customer and product sales details that supports in forecasting
the product and provide a good customer service. BI software is used for reporting
about sales and their potential customers, “Now we have a large number of
customers which forces to use the ICT for efficient business processes. We use
centralized databases for storing the customer data and product sales that supports
in forecasting a product, and efficient customer services and BI software for
reporting integrated with the database server”(interview C) and company D also
uses computerized billing machine, CCTV for security services, and centralized
database storage for storing product and customer details. This helps to check the
products that are available in all their branches “Yes, we use a computerized billing
machine, CCTV for security purposes, centralized database that stores the
information of products available in the entire warehouses we have and to store
customer information”(Interview D).
Company C uses bar code reader for billing purposes, RFID tags, and CCTV
for security purposes “Others like bar code reader, CCTV, RFID tags” (Interview C).
41
Therefore, retailer uses ICT in BI for various purposes.
4.3.2.1 Customer behavior: Two out of four interviewees uses CCTV for both security purpose and analyzing
customer behavior. Once the CCTV cameras were used for security purposes but
now it is used to study the behavior of customer and analyzing the trends.
“Similarly, what were installed as security cameras some years ago are now being
used as trend analyzer and consumer behavior spotters- what color goes with what
etc.”. (Interview A).
“CCTV- To monitor customer-buying behavior.” (Interview B)
Company B uses an online terminal called xxxx signature, which is used to
collect the information regarding customer experiences and product feedbacks.
Customer will have a unique reference number “Information such as customer
experiences and product feedback is collected through an online terminal called the
xxxx signature experience, which gives a unique reference number to each of its
customers”(Interview B).
Customer will log on to the XXX signature to check the purchase points and
can provide the feedbacks of the product. This helps to analyze the customer’s
purchase needs and according to that they can supply goods “ The customer has to
log on to review his points of purchase and along with that can provide his feedback
about the product he purchased. This way we can track his purchase needs and stock
goods according to his requirements.”(Interview B). The advantage of above method
is they have the purchase points in the online terminal. The customer will mostly log
on to the online terminal to review his purchase points. Therefore, there will more
responds for this kind of collecting methods. The other advantage is the customer can
access them through social networking websites, which can be easier to provide
feedback “accessed through a social networking platform further accessed through
the Internet and computer”(interview B).
ICT is used for analyzing the customer behavior that helps to supply goods
according to the customer needs.
42
4.3.2.2 Identifying loyal customers: ICT is used in BI to identify the loyal customers by BI software. It
automatically sends the sales promotion details through SMS or E-mail to the loyal
customers. The use of mobile phone has increased where the customer will respond
quickly rather than E-mail “BI analytical software helps to analyze the loyal
customer and it automatically sends the sales promotion details to the loyal
customers through SMS with discount points because of the increased use of mobile
services. It also sends through E-mail those who have the email addresses that are
stored in the database” (Interview C). In addition, it supports to retain the customer
by offering the sales promotion “It helps to recapture the customer by attracting
with stunning offers” (Interview C).
Therefore, this is another method for advertising the sale promotions to loyal
customers to retain them, which helps to reduce the costs of advertising through
other means.
4.3.2.3 Managing Retail operations: The manager of the company A states the use of ICT in analyzing the dead
stock in the available stock. It possibly tags virtually of any products, the goods that
are perishable and put into the packs that are decided according to the season in
advance “Dead stock analysis – this is were the use of ICT has aided us real big now
with tagging of virtually any product possible, even perishable goods get tagged in
predetermined packs as per the season”(Interview A). The advantage of dead stock
analysis is to find the age of the visible goods and identifies the goods that have been
in the stock for long time. This can be useful in making sale promotions immediately
for the older goods “The age of any good in the system is easily visible. We can find
out the old goods, which have overstayed- announce a discount immediately and
monetize the same all with a good measure of control on the process”(Interview A).
Therefore, the retailer uses ICT to reduce the unwanted items in the stock.
The interviewee of the company D states the use of sale analytics in their
business processes. It helps to analyze the performance of the sales by branch,
product, and product sold by each branch “In order to increase our sales we recently
started to use sales analytics that enable us to check the performance of sales by
branch, product details, and quantity of product sold at each branch”(Interview D).
It supports the supplying of demanded goods to the branch “This helps to supply the
43
required products to the branches”(interview D). Therefore, the retailer uses the sale
analytics to increase the performance of sales.
4.3.3 Role of People in collecting and collating BI:
The interviews recognized the value of intelligence gathered by both active
and passive means. Company A describes the viewpoint of collecting feedback is
based on sales from the market. The original manufacturers of the product place the
staff to collect and organize the data for the expectation part. They have a
merchandising team for analyzing the market “Our philosophy has always been that
the market gives its feedback in the form of sales. The expectations part has usually
been outsourced to the original product manufacturers who place their staff to
collect and collate these data. In case of our sourcing for the market we have a
merchandising team” (interview A). The merchandising team will recognize the
current trends in the environment like during the IPL cricket tournament, CSK team
clothes will be sold in large “e.g. in apparels to cash in on something like a IPL
tournament which will lead to increased sales of CSK merchandises”(Interview A).
The interviews have also states that Company C analyze the competitors
manually by gathering the information from news, articles, and about the entry of
new enterprises “For the competitor analysis from news, articles and mainly on the
entry of new enterprises”(Interview C).
They also analyze the performance of supplier based on the quality and time
of delivering the product. The employees evaluate the supplier performance
manually “supplier performance is analyzed by the quality and distribution time of
the products”(interview C).
Company D have a separate section for the customer service. Employee
collects the feedback of products and services through phone and stores in the
database “Product and service feedback is collected by contacting through phone
and stored in database. We have a customer service section for collecting this”
(Interview D). Employee performance is based on number of products sold by an
employee and put up in a worksheet “Employee’s performance is collected by how
many products are sold to the customer by a particular employee. It is done
manually in a worksheet paper” (Interview D). Therefore, each of them collects the
44
information on market analysis, employee performance, and supplier’s performance
manually. It depends upon the focus of the product. Only few are collecting customer
feedback manually by contacting through phone.
4.4 Areas of improvement:
The two out of four interviewees of the company have mentioned that they
wanted to setup an automatic reorder system in the supply chain process. The
interviewee of the company A is expecting these features in the automatic reorder
system like when the stock level is minimum, it must automatically gets added
according to the supplier of the product and provide them as a report on daily basis
which needs to get approved. “easily we are looking at setting up automatic reorder
system once a minimum stock is reached add them up vendor wise and get them
ready for approval on a daily basis” (interview A).
The interviewee of company C is expecting the feature, which should have
the potential supplier’s information in it “Ya I wanted to develop the supply chain
department with the new technologies in an efficient manner. However, may be in
future it forces us to include the technology like automatic reorder system, which has
the potential supplier’s information” (Interview C).
The interviewee of the company A says that they wanted to store the details
of the sale promotions offered by the organization to measure the success of that
discount which helps to identify and repeat the same sale promotion. “also we are
looking at being able to keep memory of the organization details of all discounts
offered on a product basis and measure their success on the timing of the same so
that peak impact can be identified and replicated”(Interview A). This area is referred
to sales section.
The interviewee of the company B wanted to have operation calculation in
the database to identify the fast moving products. This helps to improve the supply
chain process “I think I can improve the BI system at my store. I can do this by
bringing in other operation calculations such as daily stock calculations in order to
maintain a database of what is selling faster” (Interview B) and company D wanted
to include supplier analytics with their current BI system which helps to improve the
delivery service and customer satisfaction “As we now have the sale analytics, also
45
we want to include the suppliers analytics which helps to analyze good and bad
suppliers. Because sometimes we make delay in delivering the product to the
customers at right time. So we need to improve it for the customer
satisfaction”(Interview D).
Three out of four interviewees have mentioned the areas of improvement as
supply chain and only one interviewee wanted to improve sales section. Therefore,
the retailer wanted to improve in the supply chain management.
4.4.1 Missing aspects of current BI:
Three out of four interviewees have stated that they want to improve the
aspects of current BI. They wanted to explore the applications to develop the
business process to high level to keep ahead among the competitors “yes, our current
data analytics process is optimal at this stage but to keep ahead in this game we need
to find new areas of applications that can take our business process to a newer level
both competitively and customer orientation” (Interview A)and wanted to include
GIS “Yes, I wanted to improve the BI by enabling with GIS, which shows the
customer location” (Interview C), loyalty cards “Yes, Currently we have a strong
team for the customer service. However, in future we need to make it advance by
introducing loyalty cards, which makes easy in collecting feedbacks and retaining
the customers”(Interview D) with the current BI system. It helps to identify the
customer location and retain the customers. Therefore, three out of four interviewees
have a concern with the current BI system and interviewee of the company B want to
improve the system by working on the entire system of the enterprise “NO there
aren’t any aspects missing but would work on improving the system at my work place
on the whole” (Interview B).
4.4.2 Cost factors:
Two out of four interviewees of the company have mentioned the reason for
not improving their current aspects of BI. The main factor was cost where the BI
software is very expensive “They are very expensive but looking for the affordable
prices from the BI software vendors”(interview C) and looking for the affordable
price of BI software to improve the business process in an efficient manner “We are
also looking forward for cheap BI software vendors in Chennai in order to fulfill it
effectively”(Interview D).
46
4.4 Results from Questionnaires
The following figure are drawn from the responses of questionnaires, which was
taken from 22 retail companies in Chennai.
Figure 1: contributes to business intelligence.
From the figure 1: it shows the responses from 22 retail organizations about
the contribution to BI. The companies have mostly indicated customer satisfaction
and competitor analysis. This shows the retailers mostly analyze the customer
behavior and competitor for using BI.
47
Figure 2: preference to employ more people or invest in IT
From figure 1: it shows the preference of the companies in employing more
people and investing in IT. In these responses from 22 companies, nine companies
have indicated slight preference to employ more people. This shows that they need a
technological support for their business instead of employing more people in their
organization. Two of the companies want to invest more in IT rather that employing
more people. Six of the companies wanted to have more employees in their
organization. Overall, it shows the retailers wanted to have more employees in their
organization.
48
Figure 3: use of business intelligence
From figure 3: it shows the use of business intelligence by retail companies.
From the responses of 22 companies, nearly 60% of the companies have indicated
the potential use of BI by collecting, analyzing, and integrating the information to
make better decision.
49
Figure 4: usage of software applications
From figure 4: it shows the software applications that are used in retail
companies. From the responses of 22 companies, 13 companies have indicated retail
software for their business. The retail companies mostly use retail software, which
can be neither shareware nor custom software. About 50% of the retail companies
use spreadsheet, which can be used to prepare various reports. In the other options
only one company is using software designed for them and other company did not
not still use it. Therefore, the retail company mostly uses retail and spreadsheet
software for BI.
50
Figure 5: areas that use ICT
From figure 5: it shows areas that use ICT. From the responses of 22
companies, ICT is gradually used in the areas such as customer service, store
operations, and financial analysis. Only one company did not use ICT in any of the
areas. The retail has to find some new areas, which can be used with ICT. Therefore,
the retailers have the potential use of ICT in various areas.
51
Figure 6: processing of reports
From figure 6: this shows that do they receive reports about stock from
purchase department. About 95% of the retail companies, receive report about stock
from the purchase department. They may have consistent flow of information
between stock and purchase department.
52
Figure 7: reports duration
Figure 8: generation of reports
53
From the figure 7: this shows the processing a report at a particular time.
From the responses of 22 companies, 10 companies have indicted that they receive
reports at least once in a week and three companies have mentioned in the other
option as daily basis. From figure 8, from the responses of 22 companies, 10 of the
companies use employees to generate the report, nearly 27% of the companies uses
business software to generate reports and partly manual and partly software.
Figure 9: method of selling products
From figure 9: it shows the methods that used to sell products to customers.
All the retail companies have the direct sales which is the customer comes directly to
the shops for purchase. Only few companies are using telemarketing, E-commerce
and M-commerce in order to sell the product. Therefore, retailers concentrates more
on analyzing customer behavior and pricing strategy to enhance direct sale method.
54
Figure 10: analyzing historical data across organization.
From figure 10: it shows the ability of accessing data from one department to
other department. In this mostly sales department and purchase department have the
ability of accessing the data across each other. Only 36% of the company has the
ability of accessing the data to analyze historical data between sales and warehouse
department. Therefore, It shows that retailers in chennai mostly analyze the historical
data of sales and purchase department.
55
Figure 11: forecasting stock.
From figure 11: it shows that mostly sales history and current stock is used
for forecasting the product by the purchase department. Only about 32% of the
companies depend on the supplier performance.
56
Figure 12: approach for collecting and analyzing information
From figure 12: it shows the approach of collecting and analyzing the
information by the retail companies. Only 32% of the companies have indicated that
all staffs can use, share, and integrate the information and 27% of the companies
indicated that it is done in relevant department. Only 22% of the companies have
indicated that information department only uses it.
57
Figure 13: problems in using ICT in BI
From figure 13: it shows the problems that are faced when using ICT in the retail
business. The 50% of the retail companies faces network breakdown, which
decreases the efficiency of business processes, and 36% of the companies faces
software bugs in applications. It is very difficult to rectify it and takes long time. It
slows down the business process.
58
Chapter 5: Discussions
From the finding of interview and questionnaires, the retailers have expressed
the perceptions on BI in terms of nature and functions. Retailers recognize the use of
ICT in BI with more features in order to improve the business process and needs the
support of technology to improve the organizational performance. Most of the
retailers did not depend on experience. However, retailers can improve the awareness
of combining all the information sources with the individuals, collective knowledge,
and experience as told by Campbell (2006).
They use BI for the following purposes:
Ø Forecasting the products: it helps to attain customer satisfaction.
Ø Analyzing customer behavior: it helps to identify the changes in customer’s
buying behavior.
Ø Pricing strategy: it helps to sell the product with the minimum price with
better quality than the other companies.
Ø Supplier performance: it helps to identify the potential suppliers.
Retailers wanted to improve the organizational performance with the support
of technology. A retailer collect the information from various sources for using BI in
efficient manner and uses the direct sale method to sell the product to customers. All
the interviewees of the company collects the information at billing point to analyze
customer needs, sale performance, brands preferred by customer and response to sale
promotions. Also Company C collects the information regarding pricing strategy of
other companies, supplier performance, and changes in customer behavior. Company
D collects the feedback of the products and services, and employee performance. It
shows that they collect information according to the type of products sold by them.
The interviewees of the company indicate the potential use of ICT for BI.
Retailers have shifted from old technologies to new technologies where there is
enormous flow of data. ICT is used for collecting and storing the information for the
use of BI and helps to respond the feedback quickly to each branch from central
office. They have an entire view of sales in real time using ICT. Centralized database
is one of the most important ICT to store information regarding sales, product details,
59
product feedbacks, and customer needs and it is uniquely stored in the database. This
helps to access the information across each outlet from a single place. Bose (2009)
says that centralized business process reduces the cost.
Another interesting use of ICT is the use of CCTV, not only for security but
also for customer behavior analyzes.
BI software is integrated with databases, which helps in forecasting the
products and identify the loyal customer that helps to retain the customer for long
term and used for reporting sales. ICT is also used to check the product available in
stock across various outlets. E-mail is used for exchanging information across the
outlets.
One of the interviewees is using the online terminal to collect the information
regarding customer experiences and product feedbacks. Customers can also access it
through social networking websites. Dead stock analysis is used to find the age of the
goods and helps to announce the sales promotion. Moreover, the other interviewee
uses sales analytics to analyze the sale performance by branch, product wise that
helps to supply the good to the branch according to the sales. Retail software and
spreadsheets are the applications used mostly by the retailers. ICT is used
progressively in the areas of customer service, store operations, and financial
analysis. Therefore, ICT has a potential contribution on BI by the retailers in
Chennai.
In company A, the product manufactures places the staff to analyze the
expectation part, which is outsourced to them by the retailer. Retailer also has a
merchandising team to analyze the current trends in the environment. In company C,
Supplier performance is evaluated by quality and time of delivering the product by
suppliers. In company D, the number of products sold by an employee evaluates the
performance of an employee. Hence, the retail companies uses employee’s
intelligence in collecting some of the information for BI. Raisenberger (cited in
Herschel & Jones, 2005) says that to avoid the failure of knowledge sharing, the top-
level managers needs develop to new cultural and reward systems in order to identify
and reward the new acquiring behaviors, facing the whole organization.
60
The interviewees of the company A and C needed an automatic reorder system to
improve the supply chain in future and differ in the features that they preferred to
have in it. The interviewee of the company D requires the supplier analytics to
identify the potential supplier. The interviewee of the company D requires the daily
stock calculation in a database to analyze the fast moving products. Mostly the
companies indicate the improvement in supply chain area. Only one company has
indicated the improvements in sales section. The retailers wanted to have an efficient
supply chain process.
The interviewees have been missing some aspects with the current BI. They have
mentioned different aspects such as exploring application for business processes,
GIS and loyalty cards. Even though they have optimal data analytics and strong team
for customer service, they wanted to improve their BI with some advanced
technologies. Therefore, only two of the interviewees have mentioned about the cost
factors to develop the current BI system and the other two interviewees of the
company did not mention the cost factor but may be affordable to buy the BI
software for future use.
Customer satisfaction and competitor analysis is contributing more to BI
where else economic indicators, information of advertising and marketing a product
and experience are considered as additional information that contributes to BI used
by retailers. The awareness of BI is high and only one company has indicated that
they do not know it. This shows the good use of BI by retail companies. Retailers
differ at time of receiving report and generating of reports because they may have
less number of customers than the other company. It is also based on sale
performance of the retail company. If the sales are high, they will receive a report on
daily basis and quickly generate the report using software or it will be in slow
process. Ren (2010) says that significant value will arise from data mining
application, which is subjective to the daily processes of the company. The approach
of collecting and analyzing information shows the potential use of knowledge
sharing among the staffs for the use of information relevant to BI.
The interviewee states that “thanks to cheaper electronics”(interview
A). Even though electronics used for BI is cheap, retailers still prefer more
employees for their business processes rather than investing in information
61
technology (IT). The retailers wanted to have the employee's intelligence in the
business process such as producing reports, selling products by employees etc. Singh
(2012) says that labour is cheap in Indian retail sector. Li et al (2009) says that there
must be man –computer cooperative method, which is very complicated to use the
information from data mining to BI. These are the implications for the potential use
of ICT in BI by retailers in Chennai. Cody et al(2002) says that that in order to
manage the information excess ,the enterprises have put an effort by investing in
technology.
Most of the retailers in Chennai did not have the online retailing. The
interviewees did not mention the use of online retailing. In order to develop the
customer relationship, they need to establish the online retailing. From the above
findings, most of the retailers use direct sale method to sell the product to consumers.
They are giving more importance to direct sale. Even though, the people in Chennai
are gaining more knowledge in accessing ICT. This needs to consider for future use
among the retailers in Chennai.
62
Chapter 6: Conclusions and recommendations
6.1 Conclusion:
This section summarizes the findings discussed above by considering them in the context of the project’s four research questions.
1. What are the current and potential contributions of ICT to business intelligence?
Ø ICT is used for collecting and storing the large amount of data which
helps to analyze and respond quickly to feedbacks from a single place
Ø ICT is used to monitor the sales performance and to check the
availability of products across the outlets.
Ø CCTV is used for both security purposes and monitor customer buying
behavior.
Ø ICT helps to forecast the products, identify the loyal customers, and make
reports.
Ø E-mail is used in exchanging the information across the various places.
Ø Online terminal is used for colleting information from customers such as
customer experiences and product feedbacks and it can be accessed
through social networking sites.
Ø Dead stock analysis is used for finding the age of goods, which helps to
call for sale promotions.
Ø Retail software and spreadsheets are the applications that are mostly used
by retailers in Chennai.
Ø ICT is used gradually in the some of the areas customer service, store
operations, and financial analysis.
2. How is information of relevance to BI exchanged through ICT?
Ø Information is collected at billing point through computerized billing
machine such as customer needs, fast moving product, sale performance,
brand basis, and responds to discounts. Information’s that are collected is
based upon sale performance.
Ø Information such as customer experiences and product feedback are collected
through online terminal, which can also be accessed through social
63
networking sites.
3. Do the current practices results in loss of potential information relevant to business
intelligence? If there is an information loss, could ICT have a role in ameliorating it?
The information such as competitor analysis, supplier performance, employee
performance, customer service are done manually. These information’s are not
processed through ICT, so it takes lot of time to analyze and make into actionable
plans. Information must be available in real time to make a decision. So there can be
loss of potential information relevant to BI. Most of the retailers are analyzing
through sales performance and gets their feedbacks. Hence, the retailer shows more
interest in enhancing sale performance to manage the business process. To
ameliorate the loss of potential information:
Ø Retailers need to have well trained analyst to collect and integrate the
potential information through BI software such as supplier analytics,
customer analytics, and inventory analytics.
Ø Retailers need to have an efficient store operations by bringing some
advanced software and fulfill the customer needs.
Therefore, In this shifting business environment, retailers must develop their
understanding of customer needs to ensure that product is available with better
quality and price. Retailers are known for innovation, which needs to be supported
with technology to improve the business process in the enterprise.
6.2 Recommendations:
Ø The retail sector in Chennai needs to do more research on various aspects of
organization rather than simply relying on experience in this shifting business
environment. Experience is needed but it supports only for some aspects. In
the current business environment, it is very difficult to sustain in the retail
sector as the customer behavior is changing day-to-day.
Ø Some of the retailers need to place a real time centralized database, which
helps to monitor the availability of product across various branches.
Ø Retailers need to analyze the customer behavior on demographic factors.
Ø Retailer should be able to access the database across various departments
64
within their enterprise, which helps to take quick decisions at real time.
Ø Retailers need to have supplier analytics, customer analytics, and inventory
analytics, predictive analytics with their current BI.
Ø Retailers need to develop the online retailing as people gained more
knowledge in accessing ICT.
Ø Online retailing must be customer friendly which needs to specify the product
with full view and description.
Ø Retailers can also access the data through the cloud computing which is
available anywhere and anytime to take quick decisions at real time.
6.3 Limitations to research:
Ø Cost: As the study is based upon the retail shops in Chennai, it was very
expensive to travel from U.K to Chennai. This limited the study with only
few interviews and questionnaires.
Ø Knowledge: it was very difficult to understand some of the concepts with
researcher’s knowledge level.
Ø Data collecting problems: this study needs more interviews. Therefore, the
researcher approached many managers of the companies through mail and
personal influential. Some of the managers were very busy to respond for the
interviews and some of them avoided to reveal information about their use of
business intelligence.
6.3 Further research:
This study was analyzed with only four interviews from each company and
twenty-two responds for questionnaires from 22 companies. The retail sector in
Chennai have developed to a newer level, it needs more research on retail sector
particularly in business intelligence. This helps the retail sector to develop to a
competitive edge. This study can be improved by using various methods and
approaches to fulfill the entire aspects of BI in retails shops in Chennai or across
various cities in India.
Word count: 14980
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Appendix A: Interview questions
date: 30/07/2012
Study of the Role that ICT can play in business intelligence: Introduction: 1. First of all, thanks for your attention and for agreeing to complete a questionnaire.
2. This questionnaire is part of a student study investigating the role of ICT in
business intelligence.
3. The study focuses mainly on how the retail sector in Chennai uses ICT in the
exchange of information used in business intelligence. If retail companies are using
business intelligence, how well are they using it for the business processes of their
company?
4. In addition, the study looks at the role of ICT in the retail sectors in Chennai: do
the current practices in business intelligence result in the loss of potential
information relevant to Business intelligence? If there is a loss of information, what
part (if any) can ICT play in preventing or reducing it?
5. Participation in this study is entirely voluntary. You should feel under no
obligation to participate. If you are unhappy with any questions, you need not answer
them. You are free to withdraw from this study at any time.
6. All data and information collected in this study are protected and will remain
confidential. Findings from this study will all be anonymised to ensure that
participants cannot be identified.
7. By taking part in this interview it is assumed that you agree to take part in this
study?
Thanks for your assistance. Naagoor Hanifaa (University of Sheffield) [email protected]
74
Q1: What do you mean by business intelligence?
Q2: Why you think that BI is required in retail sector?
Q3: Do you use ICT in Business Intelligence?
Q4: Do you think that BI without ICT has a business value?
Q5: What kind of information do you collect and store?
Q6: How do you collect the information like customer expectations, product
feedback etc.?
Q7: How do you use the information that is processed through ICT?
Q8: Can you give me an example of your use of BI that you are really pleased with?
Q9: Can you think of ways that you can improve?
Q10: Are there any aspects of BI that you feel may be missing given your current
practices?
Q11: How well do you use ICT to integrate the information gathered in order to use
it for BI?
75
Appendix B: Questionnaires
date:30/07/2012
Study of the Role that ICT can play in business intelligence: Introduction: 1. First of all, thanks for your attention and for agreeing to complete a questionnaire.
2. This questionnaire is part of a student study investigating the role of ICT in
business intelligence.
3. The study focuses mainly on how the retail sector in Chennai uses ICT in the
exchange of information used in business intelligence. If retail companies are using
business intelligence, how well are they using it for the business processes of their
company?
4. In addition, the study looks at the role of ICT in the retail sectors in Chennai: do
the current practices in business intelligence result in the loss of potential
information relevant to Business intelligence? If there is a loss of information, what
part (if any) can ICT play in preventing or reducing it?
5. Participation in this study is entirely voluntary. You should feel under no
obligation to participate. If you are unhappy with any questions, you need not answer
them. You are free to withdraw from this study at any time.
6. All data and information collected in this study are protected and will remain
confidential. Findings from this study will all be anonymised to ensure that
participants cannot be identified.
7. By completing this questionnaire it is assumed that you agree to take part in this
study.
Thanks for your assistance. Naagoor Hanifaa (University of Sheffield) [email protected]
76
1. Which of the following do you think contribute to business intelligence (BI) for your retail organization? (Tick all that apply) a. Indicators of customer satisfaction
b. Competitor analysis
c. Economic indicators
d. Advertising and marketing information about a product
e. Experience
f. Other (please specify): ______________
2. In your organisation, would you prefer to employ more people or
to invest more in IT?
Please indicate your preference on the line below by putting a circle
round the appropriate number.
We prefer to employ more
people.
We prefer to invest more in IT.
1 2 3 4 5 6
Strong
preference
Slight preference Strong
preference
3. How does your organization use business intelligence? (Tick one
77
option):
a. Collect information
b. Collect and analyzing information
c. Collect, analyze, and integrate information into actionable plans.
d. Don’t know
e. Other (please specify): __________________________
4. What software applications do you use at work? (Select all those
that apply)
a. Word processor (e.g. Microsoft word etc.)
b. Spreadsheet (e.g. Microsoft Excel etc.)
c. Retail software (e.g. Retail pro etc.)
d. Accounting software (e.g. QuickBooks, Tally etc.)
f. Other (please specify): _________________________
5. What are the areas in which you use ICT? (Tick all that apply)
a. Customer service
b. Store operations
c. Financial analysis
d. Other (please specify): _________________________
6. Do you receive reports about stock from your purchase department? a.) Yes (go to question 7 and 8) b.) No (go to question 9)
7. How frequently do you receive reports? (Tick one option)
a. At least once a week
b. At least once a month
c. At least once in every three months
78
d. At least once in every six months
e. At least once a year
f. other (please specify) : _________________
8. How is the report generated? (Tick one option)
a. Produced manually by employee’s
b. Produced automatically by business software
c. Partly manual and partly auto generated reports
d. Other (please specify): __________________
9. What kind of methods do you use in order to sell a product to
customer? (Tick all that apply)
a. Direct sales
b. Telemarketing
c. E-commerce
d. M-commerce
e. Other (please
specify):___________________________________
10. To what extent can departments across your organization
analyze historical data from your sales and purchase
departments? (Tick all that apply)
a. Sales department can access purchase department data
b. Sales department can access warehouse department data
c. Purchase department can access sales department data
d. Purchase department can access warehouse department data
e. Warehouse department can access sales department data
f. Warehouse department can access purchase department data
g. Other (please specify): _______________________________
79
11. What data do your purchase department use to help forecast
stock requirements when making purchases? (Tick all that apply)
a. Sales history
b. Current stock
c. Supplier performance
d. Other (please
specify):________________________________
12. Which description best fits your company’s approach to collecting and analyzing information? (Tick one option) a. Only used by higher-level managers
b. Only used information department
b. Used by higher-level managers and information department
c. Storage, collection and analysis take place in the relevant
departments
d. All staff can use share and integrate information
e. Other (please specify): ___________________
13. What are the problems you face when using ICT (software and hardware) in business processes? (Tick all that apply)
a. Network breakdown
b. Software bugs
c. Getting reports of adequate quality
d. Operating system Issues
e Server oriented issues
80
f. Other (please specify): ____________________________
Appendix C: interview transcriptions
Interview A:
Q1:What do you mean by business intelligence?
“Business intelligence for us is essentially collecting data from sales points which
can be used to infer various trends- which product is fast moving, what is the
quantity of purchase done on an average by customers does a discount work ie
translate to sales and very many workable inference in a faster and data backed
manner rather than on gut feel and also irrespective of the person handling the sales.”
Q2:Why you think that BI is required in retail sector?
“BI in retail is not just a requirement- the essence of retail or dependence of success
in retail is a matter of sheer intelligence in all facets of business-purchase and
pricing being the most important of all as the value addition lies in delivery of goods
from the manufacture /agent to the end user in the cheapest manner. Being the last
mile connectivity of any supply chain the operating margin tends to be highest in the
chain here and hence with huge volumes like ours even a small improvement in
margins flow a long way.”
Q3:Do you use ICT in Business Intelligence?
“Yes, we started with billing machines- they have turned much more than that as the
data flow is now seamlessly real time thanks to cheaper electronics. For example –
across our various branches we have a unified view of sales at all time now. What
this leads to is giving us a faster feedback system to which we can respond also in
the concerned manner as the communication system to each branch from our central
office in now possible in a blanket manner. Similarly, what were installed as security
cameras some years ago are now being used as trend analyzer and consumer
behavior spotters- what color goes with what etc”.
Q4:Do you think that BI without ICT has a business value?
81
Business intelligence is an aspect of business that is irrespective of the scale and is
inherently present in the manner business is conducted- for example arranging the
way that goods are displayed in retail outlets is a simple recall of what customers
would pick up after a specific product. Grouping of similar fashion dresses in a floor
is a outcome of this. So business intelligence needs no supporting system for it to add
value to the business but the availability of these will enhance the accuracy and the
speed of knowledge formation in the organization. More than that, retaining this
knowledge is highly aided by the use of appropriate systems in this new fast world
where employee retaining is a task unto itself.
Q5:What kind of information do you collect and store?
The major point of information collection happens to be the billing point. At this
point data relevant to the purchase is collected from the invoice – price, quantity,
brand preference, and affinity towards discounts. This information gets added to the
system in real time and gives to a good many number of ways it can be processed
and used.
Q6:How do you collect the information like customer expectations, product feedback
etc.?
Our philosophy has always been that the market gives its feedback in the form of
sales. The expectations part has usually been outsourced to the original product
manufacturers who place their staff to collect and collate these data. In case of our
sourcing for the market we have a merchandising team e.g. in apparels to cash in on
something like a IPL tournament which will lead to increased sales of CSK
merchandises.
Q7:How do you use the information that is processed through ICT?
With the speed of processing capable by the new age systems available it is more of
what information we need as an output. Initially we set up computerized billing
systems to keep a check on the cash available at any cash bill counter, but the off
shoot was easier tallying of end of day accounts and also a system to check the
errors in price entry for any goods. This also led to us being able to a SKU(stock-
keeping unit) based system where everything goes real time and stock keeping is
isolated to each product and each brand separately.
82
Q8:Can you give me an example of your use of BI that you are really pleased with?
Dead stock analysis – this is were the use of ICT has aided us real big now with
tagging of virtually any product possible, even perishable goods get tagged in
predetermined packs as per the season. The age of any good in the system is easily
visible. We can find out the old goods, which have overstayed- announce a discount
immediately and monetize the same all with a good measure of control on the
process.
Q9:Can you think of ways that you can improve?
easily we are looking at setting up automatic reorder system once a minimum stock
is reached add them up vendor wise and get them ready for approval on a daily basis,
also we are looking at being able to keep memory of the organization details of all
discounts offered on a product basis and measure their success on the timing of the
same so that peak impact can be identified and replicated.
Q10:Are there any aspects of BI that you feel may be missing given your current
practices?
yes ,our current data analytics process is optimal at this stage but to keep ahead in
this game we need to find new areas of applications that can take our business
process to a newer level both competitively and customer orientation.
Q11:How well do you use ICT to integrate the information gathered in order to use it
for BI?
we would rate our usage 8 on a scale of 10
83
Interview B:
Q1:What do you mean by business intelligence?
“Business intelligence is those applications and technologies that help enterprise
users make better business decisions by simplifying the processes of gathering,
storing, analyzing, and providing access to data.”
Q2:Why you think that BI is required in retail sector?
“Yes,BI is a key component in retail sectors today. In the retail sector, information
should be made available on a timely basis. This helps the decision makers of a retail
organization to monitor the organizational performance. A retail organization that
contains a well-defined BI system can collect day-to-day operation information from
different sources of the organization and use this information to communicate to its
shareholders about the ongoing performance. BI also helps the retail sector to
enhance decision-making and performance levels over time.”
Q3:Do you use ICT in Business Intelligence?
“Yes We Use ICT. The kinds of Information’s Communications Technology used in
our Business Intelligence are Email for communicating and exchanging information,
Raymond TV- A company initiative that records information about the sales, unique
products, customer complaints, and tailoring etc from across retail outlets in India
and CCTV- To monitor customer-buying behavior.”
Q4:Do you think that BI without ICT has a business value?
Business intelligence does not have a business value because ICT is the hardware
through which business intelligence is carried on. Without ICT it maybe impossible
to collect information in order to set up a well defines business intelligence system.
Q5:What kind of information do you collect and store?
In a business like ours, which involves selling garments directly to customers, we
need to keep a tab on information such as Daily sales, monthly sales, yearly sales,
84
product wise sales, category wise sales, customer preferences of material, Buying
behavior, tailoring needs etc
Q6:How do you collect the information like customer expectations, product feedback
etc.?
Information such as customer experiences and product feedback is collected through
an online terminal called the Raymond signature experience, which gives a unique
reference number to each of its customers. The customer has to log on to review his
points of purchase and along with that can provide his feedback about the product he
purchased. This way we can track his purchase needs and stock goods according to
his requirements.
Q8:Can you give me an example of your use of BI that you are really pleased with?
The BI that I’m really pleased to work with is the Raymond signature experience
accessed through a social networking platform further accessed through the internet
and computer.
Q9:Can you think of ways that you can improve?
I think I can improve the BI system at my store. I can do this by bringing in other
operation calculations such as daily stock calculations in order to maintain a
database of what is selling faster.
Q10:Are there any aspects of BI that you feel may be missing given your current
practices?
NO there aren’t any aspects missing but would work on improving the system at my
work place on the whole.
Q11:How well do you use ICT to integrate the information gathered in order to use it
for BI?
ICT is used to a great extent towards gathering information to set up a unique and
efficient BI at my store.
85
Interview C:
Q1:What do you mean by business intelligence?
“Any decision that is taken at right time and right situation to drive the enterprise
growth in the changing environment is known business intelligence, which involves
in collecting and integrating the knowledgeable information for various reports.
Another intelligence is maintaining the products as (“cheap and best”)”
Q2:Why you think that BI is required in retail sector?
“Well BI is very important for the retail sector in order to manage to make decision
from the large volume of information from various sources. As the technology is
improved a lot in India, BI can be used to increase operating margin such as
forecasting the product, analyzing the customer behavior. We mainly think to attain
the customer satisfaction with quality and minimum pricing strategy and to control
the supply chain in shifting business environment. Therefore, we need to depend on
the modern technologies to improve our performance in this competitive business
environment”.
Q3:Do you use ICT in Business Intelligence?
“Of course, we use ICT in business intelligence, which needs to collect and store the
large volume of data. In Earlier days, when we started our retail store, we had a
large number of employees for sales, store operations in which most of it was done in
manual. Now we have a large number of customers which forces to use the ICT for
efficient business processes. We use centralized databases for storing the customer
data and product sales that supports in forecasting a product, and efficient customer
services and BI software for reporting integrated with the database server. Others
like bar code reader, CCTV, RFID tags. We have the affordable vendors for ICT to
supply and maintain the hardware and software.”
Q4:Do you think that BI without ICT has a business value?
86
No, because ICT does the basic processes to support BI. So BI without ICT cannot
fulfill the business value. Even the small-scale companies cannot function without
ICT which does not depend on the size of the company.
Q5:What kind of information do you collect and store?
As we are concentrating on sales, we need to collect the information regarding
competitors particularly on pricing strategy, changes in customer behavior. We also
collect the information regarding the supplier performance.
Q6:How do you collect the information like customer expectations, product feedback
etc.?
Customer data is collected when they buy the product at the billing point and stored
in the database with the product details, customer details. For the competitor
analysis from news, articles and mainly on the entry of new enterprises, supplier
performance is analyzed by the quality and distribution time of the products. As we
are electronic retailer, we wanted to make sure the specific product is available in
the shop because customer is influenced by the advertisement of the particular
product. So it is very important to analyze the supplier performance.
Q7:How do you use the information that is processed through ICT?
Mainly customer data is processed through ICT. As the data is stored in centralized
databases is converted into information using BI software analytical tools, which
helps in forecasting the product, maintain the good flow of supply chain and efficient
decision-making. Mostly the BI software handles with the information and data that
are stored in databases are carefully maintained and secured.
Q8:Can you give me an example of your use of BI that you are really pleased with?
BI analytical software helps to analyze the loyal customer and it automatically sends
the sales promotion details to the loyal customers through SMS with discount points
because of the increased use of mobile services. It also sends through E-mail those
who have the email addresses that are stored in the database. It helps to recapture
the customer by attracting with stunning offers.
Q9:Can you think of ways that you can improve?
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Ya I wanted to develop the supply chain department with the new technologies in an
efficient manner. However, may be in future it forces us to include the technology
like automatic reorder system, which has the potential supplier’s information.
Q10:Are there any aspects of BI that you feel may be missing given your current
practices?
Yes, I wanted to improve the BI by enabling with GIS, which shows the customer
location. With the help of this, we can analyze customers by location in order to open
branches in the other locations where there are more customers. They are very
expensive but looking for the affordable prices from the BI software vendors.
Q11:How well do you use ICT to integrate the information gathered in order to use it
for BI?
We integrate the information using the advanced analytical tools, which is
maintained and updated at particular period to improve its efficiency and processes
the reports. We have planned to employ more people in integrating the information.
Interview D:
Q1:What do you mean by business intelligence?
“According to me business intelligence is like kind of collecting and analyzing the
major and minor part of information in the business processes throughout the
enterprise and also having more experience in the field, which helps to make
decisions at right time. However, today it is used as technology, which helps to
analyze the various business processes.”
Q2:Why you think that BI is required in retail sector?
“Of course BI is essential for retail business, which helps to take quick decisions in
the day-to-day processes. In the competitive environment, BI is really needed for
forecasting the products that are needed for the customers. Also to analyze the
change in customer buying behavior that makes the business processes effective. To
improve the organizational performance, there must be technological support for the
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organization where quick decisions are needed to make in this changing business
environment.”
Q3:Do you use ICT in Business Intelligence?
“Yes, we use a computerized billing machine, CCTV for security purposes,
centralized database that stores the information of products available in the entire
warehouses we have and to store customer information.”
Q4:Do you think that BI without ICT has a business value?
BI without ICT cannot make the business process with efficient manner. Only some
processes can be done manual by employees like checking goods supplied by the
suppliers etc. now we have large amount of information and it can be managed only
by ICT.
Q5:What kind of information do you collect and store?
We mainly concentrate on collecting the customer information and product sales
details of all our branches; customer feed backs about the product and service,
employee’s performance.
Q6:How do you collect the information like customer expectations, product feedback
etc.?
We collect and store the customer information while they buy the product and
product sales details through databases we have. Product and service feedback is
collected by contacting through phone and stored in database. We have a customer
service section for collecting this. Employee’s performance is collected by how many
products are sold to the customer by a particular employee. It is done manually in a
worksheet paper.
Q7:How do you use the information that is processed through ICT?
On the weekly basis we obtain the sales report from all branches using reporting
tools and according to sales performance by branches, we take decisions on
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supplying the products to the branches. This helps to reduce the cost in supply chain
department by not keeping the unnecessary stocks in the warehouse.
Q8:Can you give me an example of your use of BI that you are really pleased with?
In order to to increase our sales we recently started to use sales analytics that enable
us to check the performance of sales by branch, product details, and quantity of
product sold at each branch. This helps to supply the required products to the
branches.
Q9:Can you think of ways that you can improve?
As we now have the sale analytics, also we want to include the suppliers analytics
which helps to analyze good and bad suppliers. Because sometimes we make delay in
delivering the product to the customers at right time. So we need to improve it for the
customer satisfaction.
Q10:Are there any aspects of BI that you feel may be missing given your current
practices?
Yes, Currently we have a strong team for the customer service. However, in future
we need to make it advance by introducing loyalty cards, which makes easy in
collecting feedbacks and retaining the customers. So I think this is missing in my
current practices. We are also looking forward for cheap BI software vendor in
Chennai in order to fulfill it effectively.
Q11:How well do you use ICT to integrate the information gathered in order to use it
for BI?
Information is worth, we will need to make some cost effective methods to use the
information from every aspects of business environment. However, currently we
started to use only some of the available information to use it for efficient business
and researching our enterprise to improve our performance from various aspects.
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Appendix D: Ethics application form
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