Business Intelligence in Retail Sector

Question: The purpose of this assessment is to enable students to demonstrate a critical awareness of previous research in an IT context within a chosen topic area through a basic understanding of research theory and techniques. It requires clear communication of ideas in a professional manner so that the reader can easily understand the purpose and results of your research. Overall goals of this assignment are to help you to: 1. Become more knowledgeable about finding and using varied research sources in your chosen area in IT. 2. Further develop your critical thinking skills and back up your points with evidence. 3. Become more adept at synthesizing information and developing informed views. 4. Discipline yourself to follow a scholarly research format to document in-text sources and a references page (bibliography). 5. Compose a well-organized, clear, concise, research paper to expand your knowledge on a research question in your chosen area. Answer: Introduction Since recent times, there has been an increase in the need for having and maintaining efficiency in the management of retail chains on regular basis. There has also been a growth in the pressure being imposed by efficiency of cost in the field of retail that has increased the need for using a number of different approaches, tools and methods for meeting these specific demands. One significant opportunity identified in this context is the utilization of a highly sophisticated analytics of business like business intelligence (Bresnahan, 1998). Business intelligence is an extremely broad term more often used for processes, tools, applications and technologies for gathering, storing, accessing and analysing data for being able to make better and improved decisions. Business Intelligence is referred to as the process to gather sufficient amount of appropriate information in an appropriate manner within an appropriate frame of time, and to deliver the outcomes to the respective people for the purposes of making decision. These decisions should be made in a manner such that there is continuous yielding of the real benefits in business, or having a positive influence on the strategies, operations and tactics of the business in the respective enterprise (Bruque, 2007). Business intelligence has been identified as a well- known category of software that provides a number of different benefits by its capabilities and functionalities. The systems of business intelligence are considered as being a step ahead of the systems responsible for the management of knowledge. Even though there may be variation in particular definitions being provided from one customer to the other, more often it is agrees by people that business intelligence has a typical meaning that provides it a better definition. As per this typical definition, business intelligence is referred to as the challenge to provide the users of business with important and sensible information from the data sources of the company for helping and aiding those users make improved and highly informed decisions in the business organization (Johansson and Sudzina, 2009). The applications of business intelligence involve activities related to online processing of analytics, systems for supporting decisions, warehousing of data and mining of data. As this system and its application has been showing huge prevalence in a number of industries, this research will be conducting a research on the involvement of business intelligence in the sector of retail. For the completion of this research, a review of literature will be presented. The methodology of this research will be case study analysis as it will help in providing a better insight regarding the concept and its implications in the industry of retail. Problem Statement Management of information is an extremely crucial part of each and every business, but majority of the business have been facing a number of needs in comparison with the others. Organization in the industry of retail, particularly, present highly complicated challenges and issues to the one providing the applications for the software of business intelligence. In this research, focus will be created on the need for having business intelligence in the sector of retail and what challenges and issues are faced in successfully adopting these systems and techniques of business intelligence. Research Questions The main question of this research is: What are the key advantages of Business Intelligence in the Retail Industry? The research will also be focusing on some sub- questions that are as follows: Is there an urgent need for business intelligence in the industry of retail? How well are the organizations in retail industry aware about the implications of business intelligence? What factors of success are involved in the initiative of business intelligence? What future is held by Business Intelligence in the retail industry? Purpose of the Research In the current era of globalization, where a number of changes keep taking place, there has been an increase in need for having effective and sensible information of business. This information has been considered extremely critical for the companies, not only in context with their survival, but their success as well. The tools of business intelligence are utilized for helping the organization in the management and purification of information needed and for making appropriate decisions in the business. Literature Review In the initial and primary context, business intelligence had been established as a system for solving tasks of analytics, generally considered as a significant way to make improved and better decision, costs being reduced and enabling an improvement in the quality of performance and processes (Britton, 2006). These decisions should be made in a manner such that there is continuous yielding of the real benefits in business, or having a positive influence on the strategies, operations and tactics of the business in the respective enterprise. However, there are a number of different definitions provided for business intelligence. Definitions of Business Intelligence Business Intelligence is referred to as the process to gather sufficient amount of appropriate information in an appropriate manner within an appropriate frame of time, and to deliver the outcomes to the respective people for the purposes of making decision. For the very first time, the term business intelligence had been used by Hans Peter Luhn, a researcher in IBM. According to his definition, business intelligence is referred to as the ability of apprehending the interrelationships and interconnections of the facts being presented in such a manner that it helped in providing guidance in the actions being taken for achieving the desirable goals and objectives (Beal, 2014). However, this term had been popularized in a significant manner by Howard Dresner, an analyst of Gartner Group. According to his definition, business intelligence is referred to as the set of methods and concepts for the improvement of decision making at business organizations by utilizing systems of support based on factual description (Gartner press release, 2009). The concept presented by this definition contributes in highlighting the relevance of analysing data, tools of query and different reports that are important sources of data. These sources assist them for synthesising useful as well as valuable information. What Does Business Intelligence Do? As per the typical definition, business intelligence is referred to as the challenge to provide the users of business with important and sensible information from the data sources of the company for helping and aiding those users make improved and highly informed decisions in the business organization. Business intelligence helps in making decisions based on operations and strategies. The strategic utilization of business intelligence can be set in a specific order stated below (Bruque, 2007): Management of corporate performance Optimization of relations with the customers, monitoring activities of the business, and monitoring the tradition system for supporting decisions Application of packaged standalone for particular strategies or operations Managing the reports being presented for business intelligence The first implication for setting this order is that solely making reports of the performance of an organization and the related competitors is not sufficient and enough, even if it is the strength of a number of existing packages of software. The second implication for setting this order is that a large number of organization, particularly from the sector of retail, have still been viewing and considering business intelligence as a software providing function of inward looking (Chuah, 2011). Business intelligence has been identified as the natural growth of a number of earlier systems established for supporting the process of decision making. With an emergence in the warehouse of data in the form of a repository, there have been a number of advancements in the cleansing of data that result in a single truth regarding the huge capabilities of software and hardware. The boom in the technologies of internet have contributed in providing the prevalent interface for user, all in combinat ion for the creation of a richer environment with business intelligence, in comparison with what was available in the previous context. Business intelligence helps in pulling information from a number of different systems (Doherty, 2010). The figure below helps in depicting the different information systems that are utilized by business intelligence in extraction of data. In the figure below, OLAP stands for online data process, DSS stands for Decision Support Systems, CRM stands for Customer Relationship Management, and GIS stands for Geographic Information Systems. The Retail Sector: The Search for New Products and New Channels The organizations in retail sector need to cope up with the constant trends in the industry for staying competitive and viable as well. The highly diversified channels of sales help in offering the retailers a number of opportunities for expansion and growth, but also seem to be presenting them with a number of different and new challenges. Ahead of the actual amount of purchases, retailing through multiple channels involve each and every interaction amongst the customers and the retailers that include research on products, holding enquiries and comparing them with other related products (Fuld and Sawka, 2000). Customers might be conducting research on products by the utilization of a single channel, and then the purchases are made by the other channel. This contributes in the creation of a number of new opportunities for the retail companies for reaching their customers, but it also contributes in adding huge complexities to the efforts being put in by retailers for understanding the behaviour of customer and effectively targeting the strategies of marketing. For yielding the profits from the opportunities provided by the multiple channels of retailing, retailers must be having the tools for turning a large amount of information being acquired by them into important, actionable and useful knowledge (Foley and Guillemette, 2010). In addition to this, for effectively diversifying their channels of sales, retailers must be focused on integrating a number of systems at internal level and an operation infrastructure with unification must be developed. This increases the need for having systems of information that are worthy of operating across the entire enterprise of retail. Factors Driving Solutions of Business Intelligence at Retail Organizations Considering the challenges mentioned above, there is a need for having retailers that show proactive behaviour in the management and utilization of corporate data if there is willingness towards being competitive in the industry. This is where there is a need for introducing business intelligence in the businesses (Gartner press release, 2012). The software of business intelligence provides the retailers the capability of analysing a lot of information in bulk that the companies already have for making the best decisions of business. The software of business intelligence contributes in allowing these organizations for tapping into the large bases of data and delivering insight that can be easily comprehended for the improvement of business performance (Hart, 2014). The companies in retail sectors now have the ability of using the software of business intelligence for being more effective in reaching the customers, reducing the amount of cost and time of operations, and allocating their resources in an effective and efficient manner. MicroStrategy can contribute in outfitting the retailers with this software for maximizing the information being gathered and making the best utilization of the data for gaining knowledge and improving the strategies of business (Johansson and Sudzina, 2009). MicroStrategy helps the retailers for reaching diverse and wide populations of user and for reporting large amount of data related to transaction across a number of different dimensions in the business organization of the retail sector. Application of Business Intelligence The applications of business intelligence has been reaching a distant scope in the sector of retail. Firstly, there is an increased need for the management of large volumes related to data from a number of different sources, everywhere from branch stores to corporate headquarters to online based stores (McGeever, 2000). With the application of business intelligence, data of retail can be easily reached into a multiple range of terabyte, and the software of business intelligence has the suitability of handling the depth of this data and information. Further ahead, the software of business intelligence helps in the retail organization in easy cross- referencing and integration of large amounts of information from a number of different source, identifying relationships amongst the data and information, and learning how varying factors impact each other and the bottom line of the company (Pirttimki, 2003). This software also helps the companies from retail sector for analysing these large number of layers of data in a simultaneous manner for creating a better understanding of the behaviours and needs of customers. Hence, this software helps in providing an unrivalled breadth and depth of analysis down to the level of individual record at the point- of- sale as well. In the current era of globalization, where a number of changes keep taking place, there has been an increase in need for having effective and sensible information of business (Stackowiak et al., 2007). This information has been considered extremely critical for the companies, not only in context with their survival, but their success as well. The tools of business intelligence are utilized for helping the organization in the management and purification of information needed and for making appropriate decisions in the business. The applications of business intelligence involve activities related to online processing of analytics, systems for supporting decisions, warehousing of data and mining of data. Research Methodology and Data Collection For the purpose of this research, the method of case study analysis has been chosen for the collection and analysis of data. The key subject related to this case study is a retail store of huge size having a chain of multiple brands for sports and fashion. This retail store is known for its operations in Slovakia since the year 2003. Due to reasons of ethical consideration, the name of the retail store has been kept confidential. In the year 2010, managers at the top- most level of the retail store made a decision of purchasing and implementing the software system of SAP and for tailoring it to the needs of the organization. As stated by the press release of an organization, SAP has maintained its position as number one vendor in combination with the Business Intelligence all across the globe, software revenue of PM and the related analytics. The study being presented had been on the basis of an analysis conducted for a duration of five months in the duration and later on the business intelligence had been implemented by the retail store. The study was conducted on the basis of analysis of document and interviews in- depth. Important documents like delivery of varying stages within the life cycle that includes schedule and project tasks, reports from the engineering of requirements, procedures and strategies of the business, materials for providing training, documents for the management of retail, along with the analysis reports of the software developers, reports and budgets from the previous system had been obtained for understanding and analysing the processes involved in the adoption of business intelligence. After the system of business intelligence had been adopted, there had been conduction of two interviews that were semi- structured. In the overall context, nine number of interviews had been conducted with the top- most manager of the retail store. The interviews had been conducted from five categories of senior manager, manager of supply chain, manager of marketing, manager of e-commerce and the chief commercial officer. The duration of the interviews were around 30 to 60 minutes. The questions of the interviews were asked in an open ended way. The key structure on the basis of which the interviews had been conducted were as follows: 1. Different stages for the life cycle of the system: Defining the problem, study of feasibility, engineering of requirements, design, maintenance and implementation 2. Issues and other relevant facts regarding the experience with the adoption of business intelligence 3. Advantages of Business Intelligence: Probing over specific benefits had been done by the interviewees for the achievement of unambiguous ways to interpret the answers they provided. There had also been an increased possibility to mention other advantages and benefits, as the interviews had been conducted personally. As per the expectation, as interviewees would be considering each and every benefit for being extremely important, the managers were asked for naming a particular factor as the most significant advantage in the activities related to business intelligence 4. Factors that had a major influence on the speed at which adoption of business intelligence was done in the organization had been structured in accordance with the theory of Moore and Benbasat Results and Findings The study being presented had been on the basis of an analysis conducted for a duration of five months in the duration and later on the business intelligence had been implemented by the retail store. The study was conducted on the basis of analysis of document and interviews in- depth. Firstly, there is an increased need for the management of large volumes related to data from a number of different sources, everywhere from branch stores to corporate headquarters to online based stores. With the application of business intelligence, data of retail can be easily reached into a multiple range of terabyte, and the software of business intelligence has the suitability of handling the depth of this data and information (Rogers, 2009). Further ahead, the software of business intelligence helps in the retail organization in easy cross- referencing and integration of large amounts of information from a number of different source, identifying relationships amongst the data and information, and learning how varying factors impact each other and the bottom line of the company. The Life Cycle of Business Intelligence in the Retail Chain Analysis of the way in which business intelligence had been adopted was on the basis of an order of stages. Each stage can be clearly defined and described further ahead in this section. Defining the Problem Analysing the problem before the decision for the adoption of business intelligence in the retail chain had been conducted by the key managers responsible in this chain of retail. In the most typical sense, managers had been looking for opportunities and a spark for improving the ways in which the processes of business were being manages in context with the pressure being imposed on the efficiency of business processes (Stackowiak et al., 2007). Majority of this was because of the increase in the relevance of e- commerce comparing it with the business of B and M. In addition to this, huge importance was being given to the permanent requirement of innovation. Majority of the managers from the department of commerce had been facing a number of problems that needed appropriate solution for the achievement of improved and better efficiency. These problems will be discussed further ahead. 1. Sharing information and Analysing this information: The information system utilized within the organization did not provide high degree of efficiency, the specific system did not have an interconnection. Thus, problems were being faced in order to share the information of one system and merging it with the information other system amongst the departments. In the analysis of data, a number of aspects were being missed such as the criteria of stock, logistics, finance, marketing, sales, and production. Managers, more often had been utilizing extensive form of excel sheets for acquiring indicators and information within the needed format for the definition of the purposes of business. This had been the process involving majority of the inefficiency and consumed a lot of time as well (Stackowiak et al., 2007). The boom in the technologies of internet have contributed in providing the prevalent interface for user, all in combination for the creation of a richer environment with business intelligence, in comparison with what was available in the previous context. Business intelligence helps in pulling information from a number of different systems 1. Process of decision- making: The decisions of the managers, at times had been changed or delayed because of the absence of important information and data or any other related detail 2. Pricing and Planning: The process of pricing and planning did not involve appropriate efficiency because of the imperfections with the changing forecasts of the market 3. Optimization of stock: There had been an increased need for decreasing the cost involved in the management of stock The main objective behind the introduction of this new system of business intelligence in the chain of retail had been focused on ensuring that information and data had been on time, with high degree of accuracy and appeared in the needed format. The organizations in retail sector need to cope up with the constant trends in the industry for staying competitive and viable as well. The highly diversified channels of sales help in offering the retailers a number of opportunities for expansion and growth, but also seem to be presenting them with a number of different and new challenges. Study of Feasibility On examining the feasibility study, there was an increased need for considering the organizational, economic, and technical feasibility related to the project for the adoption of business intelligent. This lead towards the decision that the organization will be adopting a new system, and after the analysis of cost, decisions had been made with respect to the budget of the project (Rogers, 2009). The study on feasibility had been prepared in accordance with the plan of time that was the duration of 1 month. The business objects of SAP had been chosen which had been expected and considered to be appropriate for fitting within the current procedures of the business. Ethical Consideration Before conducting the interviews and drafting the observations and results, it had been ensured that the managers were briefed about the research and the main aim of the research had been expressed in front of them. This was done in order to ensure ethics in the research and had also been helpful in successfully obtaining the views and the answers from the managers of the business. On expressing the aim of the research, it had been ensured that the name of the organization will be kept confidential for ensuring that ethics is maintained. Conclusion Analysing the problem before the decision for the adoption of business intelligence in the retail chain had been conducted by the key managers responsible in this chain of retail. In the most typical sense, managers had been looking for opportunities and a spark for improving the ways in which the processes of business were being manages in context with the pressure being imposed on the efficiency of business processes (Zeng et al., 2007). The first implication for setting this order is that solely making reports of the performance of an organization and the related competitors is not sufficient and enough, even if it is the strength of a number of existing packages of software. The second implication for setting this order is that a large number of organization, particularly from the sector of retail, have still been viewing and considering business intelligence as a software providing function of inward looking. Considering the challenges mentioned above, there is a need for having retailers that show proactive behaviour in the management and utilization of corporate data if there is willingness towards being competitive in the industry. This is where there is a need for introducing business intelligence in the businesses. The software of business intelligence provides the retailers the capability of analysing a lot of information in bulk that the companies already have for making the best decisions of business (Rogers, 2009). Business intelligence is an extremely broad term more often used for processes, tools, applications and technologies for gathering, storing, accessing and analysing data for being able to make better and improved decisions. After the system of business intelligence had been adopted, there had been conduction of two interviews that were semi- structured. In the overall context, nine number of interviews had been conducted with the top- most manager of the retail store. The systems of business intelligence are considered as being a step ahead of the systems responsible for the management of knowledge. Even though there may be variation in particular definitions being provided from one customer to the other, more often it is agrees by people that business intelligence has a typical meaning that provides it a better definition (Stackowiak et al., 2007). The concept presented by this definition contributes in highlighting the relevance of analysing data, tools of query and different reports that are important sources of data. These sources assist them for synthesising useful as well as valuable information. On examining the feasibility study, there was an increased need for considering the organizational, economic, and technical feasibility related to the project for the adoption of business intelligent. References Bresnahan, J. (1998). Legal Espionage CIO Magazine (July 15) Britton, C. (2006). Life cycles and development methods: The system life cycle: Development methods, Software system development: A gentle introduction, 4 ed., McGraw Hill, pp. 820. Beal, V. (2014). BI - business intelligence, Retrieved January 16, 2015. Bruque, S. (2007). Organisational determinants of information technology adoption and implementation in SMEs: the case of family and cooperative firms. Technovation, 27(5), pp. 241253. Chuah, M. H. (2011). A review of business intelligence and its maturity models, African Journal of Business and Management, 5(9), pp. 3424-3428. Doherty, N. F. (2010). The impact of inadequancies in the treatment of organizational issues on information systems development projects, Information Management, Vol. 41(1), pp. 4962. Fuld, L.M. and Sawka, K. (2000). Money Cant Buy You Smarts CIO Magazine Foley, E. and Guillemette, M. G. (2010). What is Business Intelligence? International Journal of Business Intelligence Research, 1(4), pp. 128. Gartner research, (2009). Gartner EXP Worldwide Survey of More than 1,500 CIOs Shows IT Spending to Be Flat in 2009, Retrieved 03/06/2012. Gartner press release, (2012). Performance Management Software Market Surpassed the $12 Billion Mark in 2011, Retrieved 06/05/2012. Hart, J. (2014). A SMALL BUSINESS IS NEVER TOO SMALL FOR BUSINESS INTELLIGENCE, Retrieved January 17, 2015. Johansson, B. and Sudzina, F. (2009). Actual vs. Planned ERP System Implementation Costs in European SMEs, European Conference on Information Management and Evaluation, Gothenburg, Sweden : University of Gothenburg, pp. 232238. McGeever, C. (2000). Business Intelligence, Computerworld. Pirttimki, V. (2003). Business intelligence empirical study on the top 50 Finnish companies, Journal of American Academy of Business, 2(2), pp. 593599. Rogers, E. M. (2009). Diffusion of Innovations, 4th ed. New York: Free Press. Stackowiak, R., Rayman, J. and Greenwald, R. (2007). Oracle Data Warehousing and Business Intelligence Solutions, Wiley Publishing, Inc., Indianapolis. Zeng, L., Xu, L., Shi, Z., Wang, M. and Wu, W. (2007). Techniques, process, and Enterprise solutions of business intelligence, 2006 IEEE Conference on Systems, Man, and Cybernetics October 8-11, 2006, Taipei, Taiwan, 6, pp. 4722.