Business Intelligence

1
Business Intelligence

• 119B
• Spring 2008
• Roldan

2
Announcements

• Next week Test virtual class with elluminate
• Final Presentations -- 5/16/08 1215 to 1430 in
  BBC 120
• 10 minute pitch to upper management -- emphasize
  costs and benefits to the company
• 1 slide each on technology, technology impact on
  industry, and recommended implementation in the
  company
• Final Exams due on 5/19/08 -- upload to
  turnitin.com by 1159pm
• Extra Credit Blog due by 1159pm 5/20/08 -- use
  personal accounts
• Answer the question How does the combination of
  BI and DP impact an industry of your choice
• 20 pts for blogs that are well written, show
  strong understanding of the technologies and
  industry, and logically tie together research on
  both. Make sure you properly cite sources.

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What is BI?

• . . .the systematic use of information about
  your business to understand, report on and
  predict different aspects of performance Tom
  Davenport

Lawton, C. (2007, October 23). Business
Technology Understanding What You Know -- How
Business Intelligence Has Come of Age. Wall
Street Journal, p. B2
4
CIOs give BI the top priority

• Huge amounts of data gathered by organizations
  over the past 20-30 years (and a continuing
  explosion in data gathering and generation)
• Improvements in technology
• Despite economic slowdown, Gartner expects BI
  spending to rise by 11 in 2008 to 5.8 billion
• Expected to reach 7.7 billion by 2012

Thomson Reuters (2008, April 1) Gartner sees
business intelligence spending rising available
at http//www.reuters.com/article/marketsNews/id
USL013768320080401?rpc28
Lawton, C. (2007, October 23). Business
Technology Understanding What You Know -- How
Business Intelligence Has Come of Age. Wall
Street Journal, p. B2
5
Harrahs Case

• What are core differences between Harrahs and
  other Casinos in the industry?
• How did Harrahs use Business Intelligence to
  achieve competitive advantage?
• Efficient Relationship Marketing?
• Improved Customer Service?
• Improved operations?
• Centralized Decision Making

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Harrahs Results

• Gary Loveman, President, Chairman and CEO of
  Harrahs (now Caesars Entertainment Company)
• Worlds largest provider of branded Casino
  entertainment
• 1/08 acquired by affiliates of Apollo Global
  Management, LLC and TPG Capital, LP in a
  transaction valued at 29.7 billion

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Adoption requires Incentives

• Davenport on Harrahs I remember some people at
  Harrah's saying they did a hotel-room
  price-optimization system where the
  business-intelligence system was recommending
  prices that would be charged for hotel rooms when
  customers would call and make reservations.
  Initially, the hotel property managers would
  override the system, because they didn't
  understand it and they thought their expertise
  and their experience was a better guide to what
  prices should be. . . After some analysis they
  found out the system was doing a better job, so
  they had to get a little heavy handing and say if
  you keep overriding these things you don't have a
  future at this company.

Lawton, C. (2007, October 23). Business
Technology Understanding What You Know -- How
Business Intelligence Has Come of Age. Wall
Street Journal, p. B2
8
Bricks and Clicks Value Chain

• Harrahs Bricks
• Harrahs Clicks
• Technology Impact through
• Reduced Costs
• Differentiation

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The Value Chain for Harrah's Entertainment
Inbound Logistics obtaining raw materials and
labor
Operations transforming raw materials into
products and services
Outbound Logistics delivering the products and
services to customers
Marketing Sales promoting the products and
services
After-Sales Service service after the sale of
products and services
Gaming machines Casino personnel
Machine placement, Maintenance Customer Service
Total Rewards
Total Rewards
Casinos
Card levels determine service levels Create/feed
customer aspiration for higher card levels
Track Customer behavior in response
to experiments with casino layout Track
customer service quality provided by employees
Track customer loyalty, visits, activity
across all properties Track same-store revenue
growth
Test Customer price sensitivity to achieve price
differentiation Differentiate offerings based on
customer behavior/ preferences
Track gaming equipment as they arrive
for placement
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Leading BI Vendors

• Demos from leader vendors accessible via the
  class del.icio.us site athttp//del.icio.us/mayl
  oo/119b

From Gartner Group (2008). Magic Quadrant for
Business Intelligence Platforms, 2008 available
at http//mediaproducts.gartner.com/reprints/mic
rosoft/vol7/article3/article3.html