Business Analytics

for

Managers
Taking Business Intelligence Beyond Reporting
GERT H.N. LAURSEN JESPER THORLUND

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Business Analytics for Managers .

Abrahams and Mingyuan Zhang Information Revolution: Using the Information Evolution Model to Grow Your Business by Jim Davis. Marie A.Wiley & SAS Business Series The Wiley & SAS Business Series presents books that help senior-level managers with their critical management decisions. Gaudard. Methodologies. Miller. Dagmar Brautigam.com. and Leo Wright For more information on any of the above titles. Ramsey. Gloria J. Adkins CIO Best Practices: Enabling Strategic Value with Information Technology by Joe Stenzel Credit Risk Assessment: The New Lending System for Borrowers. Risk. please visit www.wiley. Mia L. . Titles in the Wiley and SAS Business Series include: Activity-Based Management for Financial Institutions: Driving Bottom-Line Results by Brent Bahnub Business Intelligence Competency Centers: A Team Approach to Maximizing Competitive Advantage by Gloria J. and Stefanie Gerlach Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy by Olivia Parr Rud Case Studies in Performance Management: A Guide from the Experts by Tony C. Miller. and Analytics by Gary Cokins The Business Forecasting Deal: Exposing Bad Practices and Providing Practical Solutions by Michael Gilliland The Data Asset: How Smart Companies Govern Their Data for Business Success by Tony Fisher The New Know: Innovation Powered by Analytics by Thornton May Visual Six Sigma: Making Data Analysis Lean by Ian Cox. Lenders. and Investors by Clark Abrahams and Mingyuan Zhang Credit Risk Scorecards: Developing and Implementing Intelligent Credit Scoring by Naeem Siddiqi Customer Data Integration: Reaching a Single Version of the Truth by Jill Dyche and Evan Levy Demand-Driven Forecasting: A Structured Approach to Forecasting by Charles Chase Enterprise Risk Management: A Methodology for Achieving Strategic Objectives by Gregory Monahan Fair Lending Compliance: Intelligence and Implications for Credit Risk Management by Clark R. Philip J. and Allan Russell Marketing Automation: Practical Steps to More Effective Direct Marketing by Jeff LeSueur Mastering Organizational Knowledge Flow: How to Make Knowledge Sharing Work by Frank Leistner Performance Management: Finding the Missing Pieces (to Close the Intelligence Gap) by Gary Cokins Performance Management: Integrating Strategy Execution. Stephens.

Laursen Jesper Thorlund John Wiley & Sons. . Inc.N.Business Analytics for Managers Taking Business Intelligence beyond Reporting Gert H.

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. . . . . . . . . . . . . . . . . . . .Contents Foreword ix Introduction What Does BA Mean? Information Systems—Not Technical Solutions Purpose and Audience Organization of Chapters xvi xix xx xiv xi Why the Term Business Analytics? Chapter 1 The Business Analytics Model . . . . . 1 Overview of the Business Analytics Model Deployment of the BA Model Conclusions 12 6 2 Chapter 2 Business Analytics at the Strategic Level. . . . . . . 43 Case Study: A Trip to the Summerhouse 46 Establishing Business Processes with the Rockart Model 55 Example: Establishing New Business Processes with the Rockart Model 57 Optimizing Existing Business Processes 65 v . 17 Link Between Strategy and the Deployment of BA 18 Strategy and BA: Four Scenarios Summary 40 19 31 Which Information Do We Prioritize? Chapter 3 Development and Deployment of Information at the Functional Level . . . . . . . . . . . . . .

. . . . . . 169 What Are Source Systems. Information. . . . . . . and What Can They Be Used for? 170 Which Information Is Best to Use for Which Task? When There is More Than One Way to Get the Job Done 177 When the Quality of Source Data Fails Summary 180 179 174 . . .vi I CONTENTS Example: Deploying Performance Management to Optimize Existing Processes 67 Which Process Should You Start with? 72 A Catalogue of Ideas with KPIs for the Company’s Different Functions 90 Summary 91 Chapter 4 Business Analytics at the Analytical Level . . . 137 Why a Data Warehouse? 137 140 160 Architecture and Processes in a Data Warehouse Tips and Techniques in Data Warehousing Summary 168 Chapter 6 The Company’s Collection of Source Data. . . . . . . and Knowledge Analyst’s Role in the BA Model 95 98 101 94 Three Requirements the Analyst Must Meet Required Competencies for the Analyst Hypothesis-Driven Methods Explorative Methods Summary 134 127 130 117 120 Data Mining with Target Variables Business Requirements Chapter 5 Business Analytics at the Data Warehouse Level. . . . . . . 93 Data. . . . . . .

. . . . . . . . 201 Is it a Strategic Project or Not? 201 203 209 214 Uncovering the Value Creation of the Project When Projects Run Over Several Years When the Uncertainty Is Too Big Summary 222 211 Projects as Part of the Bigger Picture Chapter 9 Business Analytics in the Future . . . . . . . . . . . . . . . 183 What Is a Business Intelligence Competency Center? 183 Why Set Up a Business Intelligence Competency Center? 184 Tasks and Competencies 185 191 197 Centralized or Decentralized Organization When Should a BICC Be Established? Summary 200 Chapter 8 Assessment and Prioritization of BA Projects . . . . . . . . .CONTENTS J vii Chapter 7 Structuring of a Business Intelligence Competency Center . . . 223 Index 231 . . . .

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messy data requires business analytics. Better decisions to reduce costs. noisy. on people (the diverse skills it takes to formulate and execute on a well-thought-through strategy). on methods and processes (to be refined and optimized). In times of rapid change and growing complexity. Business Analytics for Managers: Business Intelligence beyond Reporting adds another interesting and worthwhile perspective on the topic. It starts with an analytical view of data—what are you measuring and are you measuring what matters? Measurement (data generation and collection) is itself a process—the process of manufacturing an asset. and analytical methods available?’’ Business analytics as portrayed by these analytical thinkers is about value creation. When data is viewed this way. The authors essentially ask ‘‘What are you doing with your data? How are people in your organization armed to make better decisions using the data. How we make decisions using huge. reveal opportunity. In the same vein as Competing on Analytics and Analytics at Work. rapid learning becomes more valuable. This book provides the strategic view on what’s required to enable rapid learning and ultimately value creation. The authors provide valuable business analytics foundational concepts to help organizations create value in a sustainable and scalable way. the analytical concepts of quality improvement and process optimization can be applied. Value creation can take different forms through greater efficiency or greater effectiveness.Foreword This book is more fuel for this era of strategic and unified views of business analytics for value creation. ix . and better allocate resources can all create value. processes. True appreciation and advocacy for the analytical perspective on the whole of business analytics is important—an analytical perspective on data (as a strategic asset).

traditional business intelligence. Anne Milley Senior Director of Analytic Strategy SAS Institute . The chapter advocating a shared strategic resource—a competency center or center of excellence—is an excellent way to drive best practices and create more value. Wherever you may be on your business analytics journey. and solid practical advice in this book to help you create more value in a sustainable and scalable way. all of which are connected and need to be orchestrated in a strategic way for maximum impact.x I FOREWORD Why business analytics? Even though some have tried to expand the definition of the relatively aged term. tabular reports reporting on old and perhaps out-of-date metrics that few take the time to consume? How old are some of the processes driving key decisions in organizations? What opportunity costs are you incurring and how could you be creating more value? This book provides a synthesized view of analysis. Further. but the analytical perspective on any process that is key to understanding what it takes to drive continuous learning and improvement. you will find worthwhile thinking. on process (to continuously learn and improve). It is not just analytics as a step in any given business process. through promotion of a process view. making the case for treating data as a strategic asset and investing in the appropriate analytic infrastructure to maximize value. shared expertise. business intelligence. and performance management. there is no real consistency. so a new term reflecting a new focus is warranted. enable the best actions. we break out of some of the silothink and see the importance of closing the loop—on data (data quality and measuring what matters). and measure impact). and on performance (to make the best decisions. How many organizations continue producing text-heavy.

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