August 2005 - Association of Dutch Businessmen

POP AND DROP A QUESTION
Bring intelligence into the
Business
Intelligence is all
about converting
the endless
stream of data
produced by doing
business into
information that
can be used to
make better
business
decisions.
This conversion
process consists of
gathering,
transforming,
storing and
analysing that
data and last but
not least
providing access
to the outcome
allowing factbased
decision
making.
Question to Jeroen
Dijkxhoorn, Manager
Technology strategy
group Asia Pacific at
SAS institute.
What is Business Intelligence?
And what is the status of BI in
Asia Pacific?
Answer
There is a deceptive nature
to the definition of Business
Intelligence, especially for the
Dutch. This is caused by the
word ‘Intelligence’. Intelligence
in this case is not referring to human cognitive
capabilities, as the Dutch word ‘Intelligentie’ is,
but to information and the process of gathering
information.
Therefore Business Intelligence is all about
converting the endless stream of data produced
by doing business into information that can be used
to make better business decisions. This conversion
process consists of gathering, transforming, storing
and analysing that data and last but not least
providing access to the outcome allowing factbased
decision making.
Nevertheless, the ambiguity in the term
‘Intelligence’ is always nice to use, when talking
to executives, claiming that ‘It is time to bring
intelligence into the boardroom!’
Over the years BI has also
become synonym for the
information technology systems
and applications providing
these capabilities. And as for
all definitions in the Information
Technology space is prone
to slight changes depending
on whoever (or better: what
company) is using the term.
Typical applications of BI
deal with three main categories
of Business: Suppliers, Internal
Organisation and Customers. The
customer intelligence category
is the biggest as the information
derived is directly influencing
the competitiveness, ability to increase revenue
and improve profitability of an organisation.
Understanding the customer demographics,
analysing customer behaviour, predicting customer
demand and segmenting customers based on
profitability, likelihood to accept offers and
likelihood to move to the competition are some
examples of BI objectives in this area.
The supplier side, although small in market
size, is able to generate huge cost savings for
companies. Imagine the number of suppliers
of a globally operating company and the total
spend across all those suppliers. Having a
clear understanding of the total spend and the
inter-relationships of those suppliers, allows
for consolidation of purchasing contracts and
negotiating better rates. On the qualitative side
and the strive for business continuity it also
allows better management of supplier efficiency
and assessing credit worthiness.
The internal organisation category is the
most diverse of all. Applications range from
consolidation, budgeting and planning in the
financial area to resource optimization in the
internal IT organisation. Besides generic across
industry applications, this category contains a
lot of industry specific applications as well.
In the Banking industry, for instance, Risk
Management is a very important area due to direct
relationship to the cost structure of the bank,
competitiveness in credit markets and the evergrowing
regulatory pressures. Revenue assurance
is another example, in this case specific for
the Telecommunications industry. The average
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Vol.15 • No. 6 • July/August 2005