BUSINESS INTELLIGENCE

1
BUSINESS INTELLIGENCE
IS 6800 5 NOVEMBER, 2004
Group 1 Dave Ouellette Paul Hippenmayer Rick
Morgan
2
DAVE OUELLETTE
BUSINESS INTELLIGENCE
3
What is Business Intelligence?

• Systematic business information acquisition and
  analysis
• Also called Competitive Intelligence, Corporate
  Intelligence, Market Intelligence, Market
  Research, Data Warehousing, Knowledge Management

Hannula et al., Journal of American Academy of
Business 2(2) 593-599, 2003
BUSINESS INTELLIGENCE
4
Business Intelligence
Internal BI
External BI
Tangibles Intangibles
Tangebles Intangebles
Competitive Advantage
BUSINESS INTELLIGENCE
5
Internal BI
Industrial Espionage
Business Espionage
BUSINESS INTELLIGENCE
6
Trade Secrets

• The term trade secret means all forms and types
  of financial business,
• scientific, technical, economic, or engineering
  information, including patterns,
• plans, compilations, program devices, formulas,
  designs, prototypes, methods,
• techniques, processes, procedures, programs, or
  codes, whether tangible or
• intangible, and whether or how stored, compiled,
  or memorialized physically,
• electronically, graphically, photographically, or
  in writing if
• the owner thereof has taken reasonable measures
  to keep such
• information secret and
• the information derives independent economic
  value, actual or potential,
• from not being generally known to, and not being
  readily ascertainable
• through proper means by, the public.

Economic Espionage Act of 1996
BUSINESS INTELLIGENCE
7
External BI
Corporate Espionage
BUSINESS INTELLIGENCE
8
Case Studies
Cleveland Clinic Foundation Avery Dennison
Kodak Lucent Aim-9/AFMSS Ford
Boeing/Lockheed Martin Air France
BUSINESS INTELLIGENCE
9
Business Intelligence
Industrial Espionage
Publications
Conferences
Knowledge
Internet
Corporate Espionage
ETHICS
Business Info
CI
Internal Data Trade Secrets
Trade Shows
Business Espionage
Intangibles
Tangibles
Competitive Advantage
BUSINESS INTELLIGENCE
10
Paul Hippenmeyer
BUSINESS INTELLIGENCE
11
Internal BI
CCF
AIM-9/AFMSS
Industrial Espionage
Knowledge Management Data Warehousing
Internal Data Trade Secrets
Avery Dennison
Business Espionage
Kodak
BUSINESS INTELLIGENCE
12
Is BI Important?

• 1 or 2 Application and Technology development
  issue as ranked by 301 IT executives
• Conventional Wisdom Enabler of competitive
  advantage via IT intensive processes

Luftman and McLean, MIS Quarterly Executive,
3(2) 89-104, 2004
BUSINESS INTELLIGENCE
13
Internal BI

• Market Intelligence, Market Research, Data
  Warehousing, Knowledge Management
• Originally designated DSS (Decision Support
  Systems) or EIS (Executive Information Systems)
• Software has been specialty product
• Seeing consolidation of smaller companies
• Internet has changed access to information.

G. Philipson www.theage.com.au/articles/2003/08
/04/1059849328310.html?oneclicktrue
BUSINESS INTELLIGENCE
14
Evolution

• 1990s IT developed ERP, CRM, SCM
• Late 1990s IT enabled data warehousing
• Transaction intensive businesses (retail,
  telecom, financial)
• 2000s Above is commonplace
• Now How to capture information for strategic
  advantage?

BUSINESS INTELLIGENCE
15
BI Software

• Major Software Companies
• Cognos
• SAS Institute
• Business Objects
• Hyperion
• Companies to Watch
• Microsoft, Oracle, SAP

G. Philipson www.theage.com.au/articles/2003/08
/04/1059849328310.html?oneclicktrue
BUSINESS INTELLIGENCE
16
Software Projections

• 8.5 growth rate for the next 3 years
• Advancing on three fronts
• Mine data in real time
• Predictive analytics
• Unstructured data searches (text and internet)

The Economist, June 10, 2004 (www.economist.com/
science/tq/displayStory.cfm?story_id2724407)
BUSINESS INTELLIGENCE
17
MSI Applications

• Focus
• Financial (locating fraud, bundling products)
• Catalog retail (bundle catalog mailing to save
  costs)
• Athletics (past performance predicts future
  success)

MSI Systems Integrators, Omaha, NE.
BUSINESS INTELLIGENCE
18
MSI Approach

• Collect Data
• Clean the Data (right data entry in right places)
• Transform (all codes compatible)
• Build Storage and Processors
• Statisticians
• Queries
• Data Mining/Discovery (open search)
• Decision Support (hypothesis testing)

BUSINESS INTELLIGENCE
19
Rick Morgan
BUSINESS INTELLIGENCE
20
External BI
Publications
Conferences
Internet
Corporate Espionage
Business Info
ETHICS
Trade Shows
BUSINESS INTELLIGENCE
21
Sources of external BI
PUBLICATIONS (magazines, newspapers, trade
pubs) CONFERENCES/TRADE SHOWS INTERNET OUTSOURCING

BUSINESS INTELLIGENCE
22
OVER RELIANCE ON THE INTERNET

• Good
• SAFEST (FEW ETHICAL GRAY AREAS/PUBLIC DOMAIN)
• CHEAP
• ANONOMOUS
• APPEARS EFFICIENT

• PITFALLS
• Possible misinformation
• Some avenues limited to only what competitor
  wants you to know
• Encourages path of least resistance mentality

Fleisher, Blenkhorn Controversies in Competitive
Intelligence, the Enduring Issues Praeger Press,
Westport CT 2003
BUSINESS INTELLIGENCE
23
Too often, too much time is spent on collection
or research, leaving inadequate time for
analysis Myburgh
BUSINESS INTELLIGENCE
24
THAT ETHICAL THING
Legitimate Misrepresentation Improper
Influence Improper Means Unsolicited Others
(Comai)
BUSINESS INTELLIGENCE
25
Federal Law Uniform Trade Secrets Act of 1985
(UTSA) Economic Espionage Act of 1996 (EEA)

• Provide legal protections for corporate trade
  secrets
• IF
• Company takes reasonable steps to protect them
• Information hasnt been publicly released or
  disseminated

BUSINESS INTELLIGENCE
26
Trade Secrets and the Federal Law
25 June 2003 Two Former Boeing Managers Charged
in Plot to Steal Trade Secrets from
Lockheed-Martin (US Dept of Justice)

• Boeing accused of unethical conduct during
  bidding process following improper acquisition of
  proprietary Lockheed documents

• RESULT Boeing stripped of seven missile launches
  in favor of Lockheed-Martin, losses approx 1B in
  contracts and an indefinite suspension of future
  contracts

US DOJ Press Release 25 June 2003 Washington Post
25 July, 2003
BUSINESS INTELLIGENCE
27
AIR FRANCE
BUSINESS INTELLIGENCE
28
AIM-9 SIDEWINDER AFMSS
BUSINESS INTELLIGENCE
29
Business Intelligence Is It Worth It?

• Hypothesis Ability to mine internal and
  external data can lead to business advantages
• Issue How to measure value?
• Only 13 of respondents said they calculate ROI
• 37 planning to do so

W. Eckerson, Journal of Data Warehousing 8 (4)
p 64. 2003. TWDI Conference Survey, 2001
BUSINESS INTELLIGENCE
30
Expectations from BI
Survey of the top 50 Finnish Companies
Hannula et al., Journal of American Academy of
Business 2(2) 593-599, 2003
BUSINESS INTELLIGENCE
31
Difficulty in Measuring ROI

• BI solutions deliver more intangible benefits
  than tangible

W. Eckerson, Journal of Data Warehousing 8 (4)
p 64. 2003
BUSINESS INTELLIGENCE
32
Business Intelligence ROI

• How to determine value?
• Start with a purpose
• Result must be measured as net present value of
  the after-cash flows associated with the
  investment
• Increase revenues or decrease costs
• Example
• BI improves forecasting decreased inventory
• BI helps customer segmentation decreased
  customer acquisition, increased revenues,
  increased customer lifetime.

Williams, S. and Williams, N., J. Data
Warehousing 8(4) 30-39, 2003
BUSINESS INTELLIGENCE
33
Preconditions for ROI
Business Preconditions
Business Value of Business Intelligence
Technology Preconditions
Williams, S. and Williams, N., J. Data
Warehousing 8(4) 30-39, 2003
BUSINESS INTELLIGENCE
34
Enhancing ROI

• Key Finding the right BI resources at the right
  price
• Outsourcing and Off-shoring
• Worldwide skills
• Applications (OLAP, ETL, DBA) becoming common
• Size of project (transaction cost) Internal
  competencies move only non-critical aspects

Dodds, J. Data Warehousing 8 (3) 32-37, 2003
BUSINESS INTELLIGENCE
35
Best Practices
Eckerson, W. Best Practices in Business
Performance Management Business and Technical
Strategies (http//www.dw-institute.com/print.asp
?id7105)
BUSINESS INTELLIGENCE
36
It will not do for an army to act without knowing
the opponents condition, and to know the
opponents condition is impossible without
espionage
Sun Tzu
BUSINESS INTELLIGENCE
37
QUESTIONS?
38
BACKUPS
BUSINESS INTELLIGENCE
39
DEFINITIONS
Business Intelligence Overarching term covering
all facets of the data gathering, acquisition and
analysis in order to gain competitive advantage.
Competitive Intelligence Information external
to the company that can be used to gain a
competitive advantage Internal Intelligence
Information inside the company, including
corporate metrics (such as sales, financial
marketing information) and trade secrets, that
can used to gain a competitive advantage Industria
l Espionage The actions of a foreign government
to acquire information on a company in order to
gain advantage for its own industry.
(CIA) Corporate Espionage Legal corporate
information gathering Business Espionage
Illegal corporate information gathering (CIA)
BUSINESS INTELLIGENCE
40
SOURCES
BOOKS Fink, Steven, Sticky Fingers, Managing the
Global Risk of Economic Espionage, Dearborn,
Chicago 2002. Fleischer, Craig and Blenkhorn,
David L., Controversies in Competitive
Intelligence, the Enduring Issues, Praeger,
Westport CT, 2003 McGonagle, John J., The
Internet Age of Competitive Intelligence, Quorum,
Westport CT, 1999 REFERRED JOURNALS Attaway, A
Review of Issues Related to Gathering and
Assessing Competitive Intelligence, American
Business Review, 16 (1) Jan 1998 Awazu, Yukika,
Informal Roles and Intelligence Activities Some
Management Propositions, Journal of Competitive
Intelligence and Management, Vol.2, No.1, Spring
2004. Comai, Global Code of Ethics and
Competitive Intelligence Purposes an Ethical
Perspective on Competitors. Journal of
Competitive Intelligence and Management, 2(1),
Spring 2004. Dijcks, Jean-Pierre, Integrating
Data Warehouse Process into the Overall
Management Infrastructure, Business Intelligence
Journal, Summer 2003, pp56-63 Fitzpatrick,
Uncovering Trade Secrets, The Legal and Ethical
Conundrum of Creative Competition. S.A.M.
Advanced Management Journal, Sum 2003 68
(3). Hammond, Mark, Fords Business Assistance
Center Hits the Fast Lane, Business Intelligence
Journal, Winter 2004, pp49-52 Hatcher, Don and
Prentice, Bill The Evolution of Information
Management Business Intelligence Journal, Spring
2004, 9,2, pp49-56. Luftman and McLean, MIS
Quarterly Executive, 3(2) 890-104, 2004 Luthra,
Anika and Desouza, Kevin Intelligence Sharing in
Virtual Teams Managing Organizational Effects of
Technology, Journal of Competitive Intelligence
and Management, Vol1 No.3, Winter 2003,
pp1-9. Nakra and College, Info-Terrorism in the
Age of the Internet Challenges and Initiatives.
Journal of Competitive Intelligence and
Management, 1 (2) Sum 2003. Cobb, Pamela
Competitive Intelligence Through Data Mining
Journal of Competitive Intelligence and
Management, Vol.1 No.3, Winter 2003, pp80-89.
BUSINESS INTELLIGENCE
41
SOURCES (Continued) OTHER JOURNALS
WHITEPAPERS Cooper, et at. Data Warehousing
Supports Corporate Strategy at First American
Corporation, MIS Quarter.y Vol 24 No4,
pp547-567, Dec 2000 Erickson, W. Journal of Data
Warehousing 8 (4) p64 Hannula et al., Journal
of American Academy of Business, Vol2, 2, 2003,
pp593-599, Myburgh, Sue, Competitive
Intelligence Bridging Organizational Boundries.
Information Management Journal, Mar/Apr 2004,
pp46-55 Williams, S and Williams N.J., Data
Wearhousing, 8(4) 30-39, 2003 Wright, Phillip
and Roy, Geraldine, Journal of Workplace
Learning, 11 (2), p53 Wright, Phillip,
Industrial Espionage and Competitive
Intelligence One You Do, One You Do Not,
Journal of Workplace Learning, Vol 11, Iss 2,
1999 (uncredited), Effective Business
Intelligence Approaches for Todays Business
World, Gartner Group, 2004. INTERNET Eckerson,
Wayne Best Practices in Business Performance
Management Business and Technical Strategies
www.dw-institute.com. Viewed 24 Oct
04 Phillipson, G www.theage.com.au/articles/2003/
08/04105984328310.html viewed 25 Oct
04 www.theeconomist.com/science/tq/displaystory.cf
m viewed 24 Oct 04
BUSINESS INTELLIGENCE