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Turning to BI analytics to turn a profit

Attendees at a business intelligence user conference share the ways BI analytics helped them steer clear of danger zones and increase profits.

The recession is possibly the best thing that has happened to business intelligence, allowing the power of BI analytics to finally come into focus.

Like many companies, Dealer Services Corp., a national inventory lender for independent used-car dealers, did not see the effects of the recession on its balance sheet until the third quarter of 2008.

Dealer Services' CIO Chris Brady started taking action in the first quarter, however, thanks to business analytics data she culled from Information Builders Inc.'s WebFocus RStat BI platform. Armed with that data, her team spotted dealers whose inventory was lagging. If she saw, for example, that a car that normally sold in 47 days was still sitting on the lot at day 62, she suggested that the dealer start trimming inventory and stop waiting for a lucky sale on day 63.

Imparting that information to its customers might seem counterintuitive in the short term, said Brady, on hand for this week's Information Builders Summit, the annual gathering of the company's WebFocus BI platform users. "The less business they do, the less we do, but it is better than doing bad business or letting these guys go out of business," she said. For Carmel, Ind.-based Dealer Services, it was a six months' heads-up that it needed to adjust its financial planning.

Utz Quality Foods Inc., the family-owned potato chip and snack food maker, also is gathering BI analytics on supermarket chain sales of its snack foods, and sharing this information with its customer base. The aim of the project is to reshape its product development strategy as customer demand shifts.

Getting BI analytics underway

BI analytics is about finding patterns in the avalanche of data generated by, and relevant to the business that allow it to anticipate future events and help drive business decisions.

"If you think about it, analytics is really the last frontier for competitive advantage," said Wayne Eckerson, director of TDWI Research in Hingham, Mass., a consulting firm and membership organization for BI and data warehousing professionals. "We've done just about everything else; we've streamlined processes, engineered processes, cut costs, looked at human capital."

The less business [dealers] do, the less we do, but it is better than doing bad business or letting these guys go out of business.

Chris Brady, CIO, Dealer Services Corp.

Organizations or departments with an "analytical pain," are good places to begin a new BI analytics project, Eckerson said, citing an example of a police department that was driven to use analytics to predict and prevent crime after winning the dubious distinction of being fifth on the list of the most dangerous cities in the country. The department now meshes historical and current crime data with geographical, weather and event data (including phases of the moon), as well as a plethora of other data to optimize its police coverage.

Phil Collard, head of business operational support, at U.K.-based Scottish and Southern Energy PLC (SSE), the country's largest energy supplier, said he can attest to the importance of picking the right project. He spearheaded a customer-driven overhaul of SSE's customer portal and Web services. The project got off the ground after data (including a massive customer survey) showed that customers wanted secure and reliable access to billing 24/7. SSE wanted to both reduce the cost of managing commercial customers and enhance service. With a new Web-based system, sales teams, armed with real-time data, now also can alert customers about spikes in consumption, giving them the option to modify their behavior.

Had it not gathered such BI analytics data, the company stood the chance of losing its largest revenue-generating power users. "If we didn't change, we would definitely lose market share," Collard said. About 40% of these big-business power consumers now are using the website, resulting in a revenue increase measured in the many millions of dollars, he said.

Let us know what you think about the story; email Linda Tucci, Senior News Writer.

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