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Paper-14_Business Intelligence Strategic Decision Making in Retail

Paper-14_Business Intelligence Strategic Decision Making in Retail

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Published by ijciiseditor
In competitive business environment, executives are required to plan strategies and take quick decisions according to rapidly changing market demands. Most organizations nowadays are linked electronically within its various manufacturing or sales units as well as with other supply chain members. This has resulted in flow of vast information and data, which is stored in data warehouse system of the organization. The stored information is later extracted, sorted and analysed for taking decisions. Business Intelligence is an IT enabled management tool that has enhanced the decision making capabilities of the working managers in varied industries, such as insurance, banking, telecom, retail and manufacturing. The present paper discusses the concept of Business Intelligence and explores its scope in Retail industry. Paper also investigates various issues that pertain to BI vendors and software applications. The paper concludes with probing its potential in Indian scenario.
In competitive business environment, executives are required to plan strategies and take quick decisions according to rapidly changing market demands. Most organizations nowadays are linked electronically within its various manufacturing or sales units as well as with other supply chain members. This has resulted in flow of vast information and data, which is stored in data warehouse system of the organization. The stored information is later extracted, sorted and analysed for taking decisions. Business Intelligence is an IT enabled management tool that has enhanced the decision making capabilities of the working managers in varied industries, such as insurance, banking, telecom, retail and manufacturing. The present paper discusses the concept of Business Intelligence and explores its scope in Retail industry. Paper also investigates various issues that pertain to BI vendors and software applications. The paper concludes with probing its potential in Indian scenario.

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Published by: ijciiseditor on Aug 31, 2011
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International Journal of Computational Intelligence and Information Security, August 2011 Vol. 2, No. 8
 115
Business Intelligence:Strategic decision making in Retail
Dr. Sumesh Raizada
Professor, Jagan Institute of Management Studies,Sector-5, Rohini, Delhi
 
raizadasumesh@yahoo.com
Abstract
In competitive business environment, executives are required to plan strategies and take quick decisionsaccording to rapidly changing market demands. Most organizations nowadays are linked electronically withinits various manufacturing or sales units as well as with other supply chain members. This has resulted in flow of vast information and data, which is stored in data warehouse system of the organization. The stored informationis later extracted, sorted and analysed for taking decisions. Business Intelligence is an IT enabled managementtool that has enhanced the decision making capabilities of the working managers in varied industries, such asinsurance, banking, telecom, retail and manufacturing. The present paper discusses the concept of BusinessIntelligence and explores its scope in Retail industry. Paper also investigates various issues that pertain to BIvendors and software applications. The paper concludes with probing its potential in Indian scenario.
Keywords
: Data mining, Decision Support, Business environment, Retail.
1.
 
What is Business Intelligence? – Introduction
Business Intelligence (BI) is the use of an organization's disparate data to provide meaningful information andanalysis to employees, customers, suppliers and channel partners for effective decision making. It helpsmanagers to identify their loyal customers, efficient employees, market environments, competitors as well aschannel partners such as, suppliers, transporters, banks, distributors and service contractors. BI suggests theareas where efforts and resources of an enterprise can be directed and assists managers in formulating theirsales, promotion or distribution strategies. [1]Business intelligence is a software application used for gathering, storing and analyzing different data availablein an organization and help managers in taking better business decisions. BI tools perform the diverse task of customer profiling, market segmentation, product profitability, statistical analysis and inventory analysis.Organizations also use business intelligence applications to forecast future business trends and strategies. [2]
1.1 BI Application in various Industries
Software vendors have developed various BI tools to suit different industrial and enterprise needs. Some of these operational areas are as below; [3] [4]
 
Commercial Mail
 
Communication
 
International Journal of Computational Intelligence and Information Security, August 2011 Vol. 2, No. 8
 116
 
Consumer Packaged Goods
 
Financial Services
 
Government organizations, Institutions and Defense
 
Retail
 
Healthcare
 
Energy
 
Hospitality
 
Manufacturing
 
Pharmaceuticals
 
Transportation and Logistics
 
Banks
1.2 How it is done? BI Development
The five key stages of Business Intelligence can be explained as per the following flow chart; (Refer Fig.1) [5]Fig.1: Stages of Business IntelligenceData SourcingData AnalysisSituation AwarenessRisk AssessmentDecision Support
 
International Journal of Computational Intelligence and Information Security, August 2011 Vol. 2, No. 8
 117
 
 Data sourcing
Relevant information is extracted from multiple sources of data such as text documents, e-mails, images,sounds, reports, tables, charts, web pages, etc. Thus all information available on the server of a businessbecomes a source of data mining.
 
 Data analysis
This involves integrating and summarizing information, validating models and predicting sales and demandtrends.
 
Situation awareness
It involves filtering out irrelevant information and organizing it in context of the current business.
 
 Risk assessment 
It consists of identifying the most suitable alternative for decision making as per the varying situations, timingsand perceived risks.
 
 Decision support 
It provides regular updates on business environment, market and events, which helps in the objective assessmentof various decision alternatives.While developing a BI solution, various queries are raised and accordingly several alternatives are consideredfor taking appropriate decision. These queries are mainly related to business area of the client firm; [2] [6]
 
Goal Alignment queries
: What strategic goal of the organization will the BI tools address?
 
 Baseline queries
: Does the organization have the capability of collecting, storing, monitoring and measuringimportant sources of information and data?
 
Cost and risk queries
: What would be the financial consequences of a new BI initiative compared to presentcosts?
 
Customer and Stakeholder queries
: Who will benefit from the initiative and who will pay? What kinds of customers will benefit directly from this initiative?
 
 Metrics-related queries:
What metrics to use for each piece of information being gathered?
 
 Measurement Methodology-related queries
: What methodology should be used for determining the best oran acceptable way of measuring the required metrics?
 
 Results-related queries
: Who should monitor the BI program to ensure that objectives are being met?

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