Business analytics applied

Business analytics is a powerful e-business tool. To implement it well, however, you have to know how your business works and how such a technology can compliment your business processes.

Business analytics can play a big role in your e-business initiatives. Also known as Business Intelligence (BI), it can add a whole new dimension to your e-business plan by giving you the ability to collate information about your customers, create profiles and make informed choices about how best to engage your customers

Implementing the solution, however, is always a problem. The best way to begin is to first identify your business needs.

"A Business Intelligence system should be designed with the business in mind -- there have been dozens of books written on why data-warehouse projects fail, and they fail because the business users aren't involved in the design. The technology people typically go off and build something on their own," said Norma Penson, PeopleSoft's business solutions director. "The number one principle should be integration and actionable goals."

Can BI really help plan a business strategy?YES

Of course, there is a lot more to executing a business plan than to develop an effective customer relation strategy. The rest of the organization will also have to pull together to head in the same direction or risk collapsing the whole plan because of conflict in departmental directives and mission objectives.

Present day analytics solutions can help organizations align its departments and develop consistent strategy based on the same set of business parameters.

Penson, in fact, identifies four areas of an organization that can benefit from a complete BI solution: Financial, internal processes, human resource and customer contact. According to Penson, these four quadrants cannot be separated because how each of them operates will ultimately affect a customer's experience with the organization.

"(With BI) you can tie together and understand the cause and effect relationship between customers, internal programs, financial performance and people. Employee satisfaction impacts bottom line. How does that happen? There are studies that say that for every point increase in employee satisfaction--there is a direct correlation with profitability," said Penson. "This is the sort of tools that allow you to view and understand the linkages between fiscal performance and the other drivers in the organization."

Take supplier relationship for an instance. They have built their whole production plans around delivering a number of products to you within a specific time-frame to fulfill your demand. These demands are often repetitive and routine. But suppose you've decided to plan a promotion for a particular product, the demand for your products will inevitably be changed. Relationships can often be strained as a result because suppliers are often shooting in the blind with regards to changes in your business plans.

Using business analytics, however, you will not only be able to plan for, but also anticipate changes that are required in your supply chain as your business plan alters. Suppliers can then participate as partners, adjust their production schedule and let you know how much time they will take to fulfill your orders.

With a complete BI solution, separate measurement or analysis reports can be generated for each and every department based on their sets of targeted goals, critical success factors and mission statements. At the same time, these performance indices will have to tie in with one another to present a complete picture of what's going on throughout the organization.

The factors determining how one index will affect another are largely qualitative. This places a high demand on the definitions and rules that drive the analytic engines behind the solution. According to Penson, PeopleSoft has managed to nail down hundreds of measures to take into account in its integrated BI solution. Alternatively, data processing and extraction are also configurable to suit the needs of business directors.

"We are giving the human being who is doing that strategizing better tools to do it with, but it doesn't take the human thought out of it by any stretch, it's just giving them a more integrated tool to do it with," concluded Penson.

An ideal BI solution should provide accurate and integrated visibility into the working of a business plan and its performance. That's only half of a business plan, mind you, the other half is execution; and it is just as important to translate decisions made on all those analytics and data into actionable results.