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Data warehousing: Knowledge that's bliss

Its getting to be more than one can handle. Thanks to ERP, SCM, CRM, data warehousing, there are huge amounts of information that most business organisations are generating today. A cellular service provider, for instance, has mounds of information on hundreds of thousands of customers. So what next?

“You need to change that data to actionable intelligence with analytical business intelligence software,” says Vivek Gokarn, CEO & MD for SAS India and SAS Global Services, a leader in the BI space.“ According to Amrish Rau, Country Head of Teradata Division, NCR Corporation, a company that’s into data warehousing and customer relationship management, of the four stages of BI — reporting, analysing, predicting and operationalising — many Indian businesses have the ability to “report”, but now need to get on to anyalysing. “Aren’t you surprised of reports that Mumbai’s a good market for cars — it’s time for the second state. You now need to know why it’s a good market,” Rau explains.

Rau has an example of how the credit card division of banks can make use of business intelligence. “The moment I use up 80 per cent of the credit limit of my credit card, I go for my second one. This is an event that is recognised by banks in many other Apac countries, and so the bank would then ask me if I wanted my credit limit extended,” Rau says.

So what’s business intelligence all about: It’s all about planning data modules and methodologies; ETL (extraction transaction loading); intelligence storage; business intelligence; analytical tools. Globally, most successful multinational companies are in quite an advanced stage of BI. Starting with a business intelligence system within the organisation, they have now extended it to outside the organisation as well. Sanjay Deshmukh, Director, Business Objects, explains how this is done. Corporate customers of Vodafone, for instance, can go to the website and use the analytical tools to check out their spending patterns. “That differenciates them from other service providers — an offering like this one has a direct impact on corporate revenues,” says Deshmukh. A credit card company, according to Deshmukh, helps stores check out the usage pattern of a customer. A store can then make the customer an offer it can’t refuse. “Business intelligence doesn’t have to be restricted to people inside your organisation — it can be extended to customers, suppliers, distributors,” says Deshmukh.

There are quite a few companies, some of them leading multinational, staking acclaim in the nascent BI market in India: They include SAS, Oracele, and NCR Teradata. Other vendors such as SAP, IBM, PeopleSoft, Business Objects, CA and Brio Software are also prominent ones. Many Indian companies and MNCs in banking and finance as well as the telecom sectors have gone in for some of the components of BI solutions. According to a CII report, there are quite a few challenges that BI players  face in India. “Business intelligence, as an application, is new to many businesses. Many enterprises in India are still unfamiliar with the product and its utility,” the report says.

There’s also a lack of historical customer track records since Indian businesses have “traditionally been low on customer focus, resulting in the least customer-tracking systems in place”, the CII report states. Another bottleneck has been because automation has been implemented by Indian businesses at various times based on the need of the hour. The businesses now grapple with disparate systems containing critical information in sectors such as banking, telecom and the consumer goods industry. A BI solution would help extract information from various sources and across different departments. But that may not solve the problem. According to CII: “Return on investments derived from information technology initiatives has always been a contentious issue in enterprises. This problem is aggravated if the solutions invested in gives results that are highly intangible — aspects such as impact of new strategies, tactics and enhanced customer knowledge.” BI solutions provide medium- to long-term solutions, though there are a few solutions such as churn management which yield short-term, tangible results.

And yet according to Frost and Sullivan, BI solutions are gaining momentum in India and the total BI application software market is expected to generate revenues of $10.7 million by end 2002. in 2005, revenues are estimated to touch $30.4 million. These revenues are expected to grow at a compound annual growth rate of 33.9 per cent over the forecast period, according to Frost and Sullivan. The market drivers, according to Frost and Sullivan, are the exploding information databases; increasing complexity in customer care processes; growing customer needs; increased level of automation across business processes and maturing services industry. The exploding databases has been caused by IT implementations which have generated a huge amount of information among customers, suppliers and partners in business.

According to Frost and Sullivan, the maturing services industry, which now accounts for almost a third of the Indian economy, had been an innovator in the way it does business. “The service industry thrives on subtle differentiation and better customer understanding. It tries to preempt the market with futuristic service offerings even before the customer need such solutions,” the CII report explains. BI solutions are therefore gaining momentum in service segments such as banking, telecom, insurance, call centre companies, etc. A positive sign reportedly is the installation of data warehousing, data mining, OLAP on transactional data, and some data mart suites to address specific business needs. Data warehousing solutions have been implemented in Citibank, Reserve Bank of India, State Bank of India, IDBI, ICICI, MaxTouch, ACC, National Stock Exchange and PepsiCo. And BI players hope many more will follow suit.