what is data warehousing all about? peter nolan
Post on 29-Dec-2015
218 Views
Preview:
TRANSCRIPT
What is What is
Data WarehousData Warehousinging
All About?All About?
Peter NolanPeter Nolanwww.peternolan.comwww.peternolan.com
Agenda
What do you want, really?What do you want, really? What is the Data Warehouse all about?What is the Data Warehouse all about? Management Decision Making ProcessManagement Decision Making Process Role of the Data WarehouseRole of the Data Warehouse Major issues of the Data WarehouseMajor issues of the Data Warehouse What are people saying about Data What are people saying about Data
Warehousing?Warehousing? Typical applications of Data WarehousingTypical applications of Data Warehousing Case studiesCase studies Business benefits of Data WarehousingBusiness benefits of Data Warehousing What works?What works?
What Do You Want, Really?
Improved profitImproved profitabilityability Attention Attention to both revenue and coststo both revenue and costs
Improved decision making capabilityImproved decision making capability Make more effective decisions more oftenMake more effective decisions more often Consistent measures of business performanceConsistent measures of business performance Others?Others?
What is Data What is Data Warehousing Warehousing
All About?All About?
What is the DW All About?
The Data Warehouse is all aboutThe Data Warehouse is all about
“Supporting the management decision making “Supporting the management decision making process”process”
It’s that simple, and that complicatedIt’s that simple, and that complicated
Management Decision Making Process
How’s Business?
Why?What if?
Invest $$$
What is the Data Warehouse?
Time VariantTime Variant Subject OrientedSubject Oriented IntegratedIntegrated Contains non volatile snapshotsContains non volatile snapshots
A Data Warehouse is a collection of data in support A Data Warehouse is a collection of data in support of the management decision making process.*of the management decision making process.*
*Source: Building the Data Warehouse by W.H. Inmon
What Does a DW Look Like?
HighlyHighlySummarisedSummarised
LightlyLightlySummarisedSummarised
CurrentCurrentDetailDetail
Older Older DetailDetail(Tape/cdrom)(Tape/cdrom)
MMeettaa
DDaattaa
Role of the Data Warehouse
How’s Business?
Why?What if?
Invest $$$
Major Issues of Major Issues of Data WarehousingData Warehousing
Islands of Information
Admin System 1
End User Query
Abacus (Non-SNA)
Admin System 2
Admin System 3
Hidden Cost of EIS/DSS
Executive
Custom Reports
Spreadsheets
Legacy Systems: $9/year
$1$1
What are People Saying What are People Saying About About
Data Warehousing?Data Warehousing?
What are People Saying?
““The business case for warehouses is simple: The business case for warehouses is simple: they help turn data into a competitive tool”they help turn data into a competitive tool”
COMPUTERWORLDCOMPUTERWORLD
What are People Saying?
Tom PetersTom Peters We are living through a shift from selling virtually We are living through a shift from selling virtually
everyone the same thing a generation ago to everyone the same thing a generation ago to fulfilling individual needs and tastes... by supplying... fulfilling individual needs and tastes... by supplying... customised products and services. The shift [is] from customised products and services. The shift [is] from “get the sale now at any cost” to building and “get the sale now at any cost” to building and managing ... databases that track the lifetime value managing ... databases that track the lifetime value of your relationship with each customer. of your relationship with each customer.
What are People Saying?
Rapp & Collins Rapp & Collins it may almost be time to replace it may almost be time to replace
“location, location, location” “location, location, location”
with with
“database, database, database”.“database, database, database”.
What are People Saying?
Stanley Davis - Future PerfectStanley Davis - Future Perfect Mass CustomisationMass Customisation Standardise the Commodity and Customise the Standardise the Commodity and Customise the
Service that Surrounds ItService that Surrounds It
Example: Telephone callsExample: Telephone calls
What are People Saying?
Philip Kotler - Marketing ManagementPhilip Kotler - Marketing Management Mass markets are fragmenting into micro-Mass markets are fragmenting into micro-
markets; multiple channels of distribution are markets; multiple channels of distribution are replacing single channels...replacing single channels...The winners are those who carefully analyse The winners are those who carefully analyse needs, identify opportunities and create value-needs, identify opportunities and create value-laden offers for target customer groups that laden offers for target customer groups that competitors can’t match.competitors can’t match.
IDC
Perhaps the single most important ongoing Perhaps the single most important ongoing occurrence to affect data warehousing has occurrence to affect data warehousing has been the information explosion. Organisations been the information explosion. Organisations realise that, given the fundamental relationship realise that, given the fundamental relationship between knowledge and power, utilisation of between knowledge and power, utilisation of this information is key to their competitive this information is key to their competitive positioning. positioning.
Meta Group
Bottom Line: Data warehouses are an Bottom Line: Data warehouses are an increasingly critical component of the systems increasingly critical component of the systems that support the ever-increasing tempo of that support the ever-increasing tempo of business competition. business competition.
Typical Applications of Typical Applications of Data WarehousingData Warehousing
A Way to Test New Ideas
How do you test new ideas for profitability?How do you test new ideas for profitability? Data Analysis/Mining “tests” ideasData Analysis/Mining “tests” ideas Data Mining to find “diamonds”Data Mining to find “diamonds” There are “diamonds” in your dataThere are “diamonds” in your data Marketing Data WarehouseMarketing Data Warehouse
Small investment, fast returnSmall investment, fast return Likely source of “diamonds”Likely source of “diamonds”
A Classic DW Application Targeted Marketing
CUSTOMERSERVICE
ADMIN
CONTACTMGT
DISTRIBUTION
CAMPAIGNMGT
ANALYSIS
Marketing Cycle
Case StudiesCase Studies
Case Studies
Many businesses have benefitedMany businesses have benefited The following case studies are some examplesThe following case studies are some examples
Product Rationalisation
SituationSituation Half the product line found to be unprofitable due Half the product line found to be unprofitable due
to low number of clients and low premium to low number of clients and low premium paymentspayments
SolutionSolution Launch “Product Rationalisation”. Cut the number Launch “Product Rationalisation”. Cut the number
of products by half. Leads to “Business of products by half. Leads to “Business Simplification”Simplification”
Value Value Largest business project ever undertaken by 100 Largest business project ever undertaken by 100
year old companyyear old company
Target Marketing
SituationSituation Legislation changes causes confusion for Legislation changes causes confusion for
thousands over whether to retire. June 94.thousands over whether to retire. June 94.
SolutionSolution Profile customer database, select all those people Profile customer database, select all those people
who would benefit from retiring before legislation who would benefit from retiring before legislation change and target them for rollover products.change and target them for rollover products.
Value Value $440M deposited into rollover fund. Some $300M $440M deposited into rollover fund. Some $300M
up on product managers forecast.up on product managers forecast.
Cross Selling
SituationSituation Customer wishes to cross-sell existing clients Customer wishes to cross-sell existing clients
SolutionSolution Provide analysis capability to profile existing clients Provide analysis capability to profile existing clients
to determine who owned the product. Use DW to to determine who owned the product. Use DW to select targets who did not own the product.select targets who did not own the product.
ValueValue Response rate for new product purchase direct Response rate for new product purchase direct
mail 18%. (As opposed to 2% for third party mailing mail 18%. (As opposed to 2% for third party mailing list)list)
Up Selling
SituationSituation Customer wishes to up-sell existing clients Customer wishes to up-sell existing clients
SolutionSolution Provide ability to select existing customers to Provide ability to select existing customers to
upgrade productsupgrade products
ValueValue Response rate for upgrade direct mail 33%Response rate for upgrade direct mail 33%
Variance Analysis
SituationSituation Senior management does not receive timely P&L Senior management does not receive timely P&L
reportreport
SolutionSolution Provide easy to use tools - access to Provide easy to use tools - access to
revenue/expense database. Management conducts revenue/expense database. Management conducts own variance analysis by dept, division, and bankown variance analysis by dept, division, and bank
ValueValue $2M increase in net income from more timely $2M increase in net income from more timely
management decisionsmanagement decisions
Cost Management
SituationSituation Cut corporate spending by 10%. Implement program Cut corporate spending by 10%. Implement program
within 3 monthswithin 3 months
SolutionSolution Use relational databases. Create flexible applications Use relational databases. Create flexible applications
for 285 departments to analyse expense data. for 285 departments to analyse expense data. Support senior management summary reports, Support senior management summary reports, consistent with department detailsconsistent with department details
ValueValue Cut expenses by 10% - or $100M - from prior yearCut expenses by 10% - or $100M - from prior year
Resource Allocation
SituationSituation Misallocation of departmental expenses increases Misallocation of departmental expenses increases
costscosts SolutionSolution
Combine revenue, expense, headcount and Combine revenue, expense, headcount and asset/liability information into one database. asset/liability information into one database. Provide easy to use tools for access by all levels of Provide easy to use tools for access by all levels of management.management.
ValueValue $7 Million increase in net income through better $7 Million increase in net income through better
resource allocationresource allocation
Profitability
SituationSituation Unprofitable retail customers are causing drain on Unprofitable retail customers are causing drain on
resourcesresources
SolutionSolution Use CIS and product profitability to build customer Use CIS and product profitability to build customer
profitability modelprofitability model
ValueValue Use model to reprice products and create Use model to reprice products and create
household pricing. Increase net income by $20Mhousehold pricing. Increase net income by $20M
Segmentation
SituationSituation Marketing did not know what kind of customers Marketing did not know what kind of customers
were using serviceswere using services
SolutionSolution Combine CIS with cluster-demographics to build Combine CIS with cluster-demographics to build
customer profiles by product and market areacustomer profiles by product and market area
ValueValue Developed products to meet needs of customers. Developed products to meet needs of customers.
Increase net income by $3 millionIncrease net income by $3 million
Target Marketing
SituationSituation Direct Marketing budget substantially reducedDirect Marketing budget substantially reduced
SolutionSolution Develop Direct Mail Model, combining segmentation Develop Direct Mail Model, combining segmentation
analysis and product usage researchanalysis and product usage research
ValueValue Target marketing reduced direct mail costs by $3MTarget marketing reduced direct mail costs by $3M
Business BenefitsBusiness Benefits
Business Benefits
More cost-effective decision makingMore cost-effective decision making Better business intelligenceBetter business intelligence Enhanced customer serviceEnhanced customer service Enhanced asset/liability managementEnhanced asset/liability management Aligned with corporate downsizingAligned with corporate downsizing Relationship to Business Process Relationship to Business Process
ReengineeringReengineering
What WorksWhat Works
Likely High Payback Projects
High Volume, Low Cost productsHigh Volume, Low Cost products Marketing CampaignsMarketing Campaigns Customer Value IndexCustomer Value Index
Customer profit contributionCustomer profit contribution Tiered servicing of customersTiered servicing of customers
Product launch, modify, termination, pricingProduct launch, modify, termination, pricing Customer/Product understandingCustomer/Product understanding
What Works
Senior Manager(s)Senior Manager(s) Making big decisions on scant dataMaking big decisions on scant data Demanding informationDemanding information
Marketing Manager(s)Marketing Manager(s) Demanding better sales targetingDemanding better sales targeting
Do something you can’t do nowDo something you can’t do now
What works is generally not easy to doWhat works is generally not easy to do
What Doesn’t Work
IT technology driven projectIT technology driven project Let’s try this new box, tool, toy ...Let’s try this new box, tool, toy ...
Pie in the sky wishful thinkingPie in the sky wishful thinking There seems to be a lot of this aboutThere seems to be a lot of this about
Trying wide range of source systems firstTrying wide range of source systems first DW as an extension of MIS/EISDW as an extension of MIS/EIS
Places to Start
75% of DWs start in:75% of DWs start in: Marketing/SalesMarketing/Sales Customer Information SystemsCustomer Information Systems
All benefit from integrating data from All benefit from integrating data from multiple source systemsmultiple source systems
All contribute to new revenue and profitAll contribute to new revenue and profit Most of the other 25% start in Most of the other 25% start in
Performance measurement projectsPerformance measurement projects Financial reporting and analysisFinancial reporting and analysis
Places not to Start
Financial SystemsFinancial Systems eg. Ledger, Accounts Receivable, Product eg. Ledger, Accounts Receivable, Product
CatalogueCatalogue
Not customer focusedNot customer focused These systems are already ‘good’These systems are already ‘good’ Provides ‘better’ numbers for accountantsProvides ‘better’ numbers for accountants Little opportunity for new revenueLittle opportunity for new revenue
Cost Justifications
These are hard to do in advanceThese are hard to do in advance Note that DW may be seen as “optional extra”Note that DW may be seen as “optional extra” Near impossible to justify $1M, 2 year projectNear impossible to justify $1M, 2 year project Much easier to justify Much easier to justify
$100-$200K 3-4 Month Project$100-$200K 3-4 Month Project Aimed at profit projectAimed at profit project Specific targeted audienceSpecific targeted audience Even then it’s hardEven then it’s hard
Summary
What do you want, really?What do you want, really? What is the Data Warehouse all about?What is the Data Warehouse all about? Management Decision Making ProcessManagement Decision Making Process Role of the Data WarehouseRole of the Data Warehouse Major issues of the Data WarehouseMajor issues of the Data Warehouse What are people saying about Data What are people saying about Data
Warehousing?Warehousing? Typical applications of Data WarehousingTypical applications of Data Warehousing Case studiesCase studies Business benefits of Data WarehousingBusiness benefits of Data Warehousing What works?What works?
Thank You for Your Thank You for Your Time!Time!
top related