Assessment 2: Individual Details Report

Supporting Document for

The Strategic Direction of Business Intelligence (BI)

Team A

Module: 12-7714 Enterprise Systems

Assessment: Assessment 2 (Individual)

Title: The Strategic Direction of BI

Course: Enterprise Systems Professionals

Author: Mr Traitet Thepbandansuk

Student number: 20043132

Total pages: 15 pages (Including cover page)

Word Count: 1500 words (Excluding cover page, annotated

diagrams and references)

Submission deadline: Friday 18th May 2012

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The Strategic Direction of Business Intelligence

Traitet Thepbandansuk, Team A

1. INTRODUCTION

At this moment, the company is in crisis because we have not made any profit for several months. To turn

this crisis into an opportunity, business intelligence (BI) solutions become necessary to increase our

competitive advantages. This report illustrates the BI strategic direction written by Traitet Thepbandansuk,

who is a BI business analyst. The objectives are to analyse existing problems from historical data, and to

demonstrate how the strategic direction can be achieved. This paper mainly explains by using graphical

information with annotations to indirectly express why visual information is powerful.

As can be seen in Figure 1, the company is facing four significant problems: high costs, low sales,

overstocking, and strong competition. The main causes of these problems are employees who use

insufficient information to make decisions, and the ERP system which cannot provide enough effective

information for their benefit. Therefore, the main implementation strategy is providing visual information

and tools to help business users analyse data and make better decisions faster (Leger 2012). This paper

is separated into three parts: data analysis, solutions and benefits as follows.

Figure 1 Existing problems and proposed solutions

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2. ANALYSIS

With regards to the initial analysis, the company could not make any profit because we had high expenses

for numerous items, whereas the sales volume was comparatively low, as shown in Figure 2.1. The

causes of the problems relating to BI are summarised into three perspectives: process, people and

technology, as shown in Figures 2.2. The significant problems are then analysed in the following sections.

Figure 2.1 Profit and loss, and cost breakdown

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Figure 2.2 Problems analysis with regards to BI

Figure 2.3 Drilldown information

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2.1 Analysis of the low sales

Problem

According to historical data summarised in figure 2.1.1, the sales volume was almost zero from day 1 to

25 in the first month, and again from day 9 to 19 in the third month because we did not have sufficient raw

material to produce finished goods. Furthermore, Figure 2.1.2 shows that the prices of product F02 were

set much higher than competitors which caused us lose sales opportunities.

Analysis

The root cause of this problem was that routine jobs were not operated regularly. For example, MRP was

not executed in appropriate time to purchase raw materials. Therefore, we did not have raw materials to

produce finished goods, whereas fixed costs, such as labour and bank interest, were ongoing expenses.

Figure 2.1.1 Low sales problem

Figure 2.1.2 Overpricing problem

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Figure 2.1.3 Sales and ongoing expenses

Working model of alert notification

The below figures illustates alert notification solutions to warn business users about problems that should

be raised, such as overpricing, insufficient materials, and decreasing sales volume in specific regions.

Figure 2.1.4 Alert notification solutions

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2.2 Analysis of the inventory problems

Problem

Due to poor decision making and communication, there had been no sales of product F02 for 18 days,

whereas it had been produced continuously, as shown in Figure 2.2.1. Therefore, some products, such as

F06, could not be produced because of insufficient raw materials. Moreover, finished goods were not

produced with reference to sales volume, as illustrated in Figure 2.2.2.

Analysis

When a product does not sell, the sales department should immediately consider adjusting prices and

marketing expenses to sell it. The production planning staff must also regularly monitor stock levels, and

communicate with the sales department to produce an appropriate number of finished goods dependant

on demand.

Figure 2.2.1 Analysis of inventory problems

Figure 2.2.2 Non-balance problem

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Working model of automatic visual reports

The inventory problems can be solved by cross-functional, automatic and visual reports. BI solutions

should make it easy for users to preview reports and make decisions. However, business users must

always carefully analyse the reports before making decisions. A working model for reporting is illustrated in

Figure 2.2.3.

Figure 2.2.3 Automatic visual Reports

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2.3 Data analytics

FCA tools shown in Figure 2.3.2 are an effective insight into complex data. For example, analysing

customer behaviour to set prices and plan marketing campaigns, which are suitable for each sales region

and distribution channels. Although there is only historical data for 3 months, the relationship results from

analysis by FCA are quite useful for marketing, as shown below.

Figure 2.3.1 Knowledge generated by FCA tools

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Data analytics procedure by FCA Tools

Figure 2.3.2 Data analytics by FCA

2.4 Summary of decision-making solutions

Decision making with regards to deciding the selling price, marketing expenses and sales forecasts can

be greatly improved by using alert notifications, visual reports and FCA tools, as shown below.

Figure 2.4.1 BI tools for decision making

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3. SOLUTIONS

The key factors in successfully implementing BI are not only advanced technology, but also positive

business processes, and people (Yeoh and Koronios 2010). Therefore, the primary strategy is continuous

improvement of people skills and business processes to align BI technologies with business strategies.

The secondary strategies are utilising SAP standard features, using FCA tools, and implementing SAP

BW and BusinessObjects as shown in Figure 3.1.

The solutions based on the framework in Figure 3.2 are separated into 2 phases. Firstly, to earn higher

income and reduce costs, the development of automatic reports and e-mail notifications are urgently

needed to enhance the decision-making processes and eliminate unplanned events (Wight 2005). They

also encourage business users to use sufficient information before making decisions instead of pride on

gut-based decisions (Davenport, Harris and Morison 2010). Regarding implementing consideration,

utilising SAP standard features not only saves time solving immediate problems mentioned in the analysis

section, but it also prepares requirements before implementing SAP BW in the second phase.

Secondly, SAP BW and BusinessObjects take eight months for the implementation based on Accelerated

SAP (ASAP) methodology. This approach is a proven methodology, which can reduce time, costs and

risks of the implementation (Yucel and Gurkan 2011). Furthermore, the BusinessObjects tools selected for

data analysis and reporting are Crystal Report, Xcelsius and and Pioneer. With drag and drop interfaces,

business users are convenient to customise visual reports, and analyse data by themselves. Finally, as

can be seen in Figure 3.3, data is seamlessly integrated from ERP and legacy systems with SAP BW.

Therefore, information can be combined from both SAP and Non-SAP systems to analyse and make

decisions.

Figure 3.1 BI implementation

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Figure 3.2 Framework for BI implementation

Figure 3.3 BI integration

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4. JUSTIFICATION AND BENEFITS CASE

The implementation starts by utilising SAP standard features and using basic BI tools in the first year, and

then implementing SAP BW and BusinessObjects in the second year. As can be seen in Table 4.1, our

strategic direction can bring several benefits. Firstly, the alignment of BI implementation with business

strategies will make sure that the business goals are addressed to enhance business advantages (Walker

2007). Secondly, automatic reports can reduce the workload and encourage users to use adequate

information to make better decisions faster, whereas alert notifications enable the users to execute their

tasks in a timely manner. Thirdly, the BI analytics tools can reveal hidden knowledge from huge data, and

enable decisions to be made based upon actual business trends (Jason 2008). Moreover, SAP BW and

BusinessObjects tools enhance reporting capabilities because real-time information can be automatically

extracted from different sources. Eventually, BusinessObjects tools are easy to use. Therefore, business

users are conveniently able to develop and customise reports by themselves (Battersby 2008).

Although implementing BI has many advantages, there are some risks that should be considered. Firstly,

insufficient support from the top management is a significant risk in terms of the alignment of BI with

business strategies to achieve business goals (Tasai 2010). Secondly, end-users resist changes because

they think that new business processes may multiply their tasks and make them more difficult to work with

(Peng and Nunes 2008). Thirdly, when everyone uses BI information to make decisions, unauthorised

accessibility and the poor quality of data are potential risks that can damage the business (Egger 2007).

Finally, if requirements are not clearly identified, information provided by BI might not be compatible with

business needs. Therefore, the company risks spending more time and money on improvements.

Table 4.1 Strategic directions, benefits and risks

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5. CONCLUSION

Finally, the company is in crisis because we have high expenses but are earning low income. The main

reasons are the decision making processes and the ignorance of tasks, such as regularly monitoring

reports and executing MRP. To solve immediate problems, automatic visual reports and alert notifications

will be developed suddenly to reduce waste and increase income, whereas FCA tools will be used for

market analysis. Furthermore, the strategic directions are the alignment of BI with business strategies,

and providing information for making faster decisions. Therefore, SAP BW and BusinessObjects will be

implemented during the second year to enhance reporting and data analysis capabilities. The main

benefits should be increasing revenue, reducing costs, and making quality decisions quicker. However,

some risks that should be considered are top management support, user resistance to change, data

quality and accessibility.

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REFERENCES

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BATTERSBY, Saskia (2008), BusinessObjects Xcelsius and SAP Visual Composer. [online]. Last accessed 16 May 2012 at: http://www.sdn.sap.com/irj/scn/go/portal/prtroot/docs/library/uuid/d0ad0c72-38bd-2b10-938b-ddf243930afa?QuickLink=index&overridelayout=true&37417755086368

DAVENPORT, Thomas H., HARRIS, Jeanne G. and MORISON, Robert (2010). Analytics at Work: Smarter Decisions, Better Results. [online]. USA, Harvard Business School Publishing Corporation. Book from Amazon last accessed 16 May 2012 at: http://www.amazon.com/Analytics-Work-Smarter-Decisions-Results/dp/1422177696

EGGER, et al. (2007). SAP Business Intelligence. USA, Galileo Press.

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JASON (2008). Benefits of Strategic Data Analysis. [online]. Last accessed 13 May 2012 at: http://business-intelligence-au.blogspot.co.uk/2008/01/benefits-of-strategic-data-analysis.html

JIM (2008). Drill Down to More Detailed Charts using Excel Lookups and Xcelsius Chart Drill Down. [online]. Last accessed 16 May 2012 at: http://myxcelsius.com/2008/12/01/drill-down-to-more-detailed-charts

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