1. Operational Business Intelligence
The Next Business Challenge. A business executive was telling me about the next problem she faces in operating her chain of specialty prepared food stores: it takes too long to service a customer, but she cannot afford to increase labor costs further. She knows the solution is to have store managers make more precise staffing decisions, reacting promptly to changes in customer traffic and purchase patterns.
But store managers lack the information they need to do this. They get weekly reports on sales by product. What they need is fully detailed purchase history by 10-minute periods – and they need it within a few minutes of real time. Only then can store managers relate their observations about how long customers are waiting to what they are buying and therefore to specific, timely actions with respect to staffing. The store manager needs to understand promptly what is causing the delay; what is required to correct matters as soon as possible; and how to take the best actions for the next shift, the next day and the next week.
A New Decision Frontier. What the store managers need is operational business intelligence (BI): day-by-day and hour-by-hour decisions made by hundreds of store managers to deal with the seemingly small matters. Each decision may, by itself, have a relatively small impact on a large enterprise. But, taken together, the thousands of decisions each day by store managers have a large impact. In many enterprises, operational BI is the next major frontier in business performance.
In general, operational BI is characterized by business needs to:
• react rapidly to events with actions by people who are part of the line business operation; and,
• make such actions more specific, accurate, appropriate and timely than in the past.
Such capabilities have been shown to make a significant cumulative difference in business performance in many industries. Examples range from better stocking of retail stores; to more efficient use of labor in shipping companies; to better treatment of the most profitable customers; to reducing manufacturing cost and delays via better management of the supply chain.
Formidable Requirements. While there is rising interest in the business community in operational BI, there is a rising concern among IT professionals: the requirements are formidable and many data warehouse infrastructures are already overloaded. An operational BI solution must:
• Scale. That is, it must handle increases in data volume and workload without disproportionate increases in cost or response time.
• Be economical. Total cost of ownership is what is important here. Users need good return on their investment to be able to implement operational BI.
• Deliver rapid response to queries. People on the front lines of any organization typically work at a fast pace. They need answers while the customer or supplier is on the phone; when the delivery is at the dock; or at the moment that something goes awry in the factory.
• Support many concurrent users. Operational BI is not about servicing 20 analysts in the back office; it is about servicing hundreds or thousands of people doing every day jobs throughout the enterprise.
• Keep data up to date, even if it is updated nearly continuously throughout the day. Operational BI is often about taking action right now – on the basis of what happened in the last few hours or last few minutes.
• Remain available even as components fail; disks and nodes may fail, but many elements of the modern enterprise must just keep going; and,
• Often, operate seven by twenty-four, so, you can’t have much in the way of scheduled downtime, either.
For many users who would like to implement operational BI, both the technical requirements and the cost are significant barriers. These users are searching for a solution that can do the job at a reasonable price.