Converting Data in to Business Intelligence

1
Converting Data in to Business Intelligence

• Thursday, 22 August 2007 - 1045 to 1200 hrs.
• Dinesh Chauhan
• Regional Supply Market Manager Travel, Asia
  Pacific
• Philips General Purchasing

2
Todays Agenda

• Travel data versus travel intelligence the real
  difference
• Common and costly Business Intelligence mistakes
• Supplier differentiation is Business
  Intelligence a new edge?
• Integrating agency and credit card data why,
  when and how?
• How to make business intelligence pay off

3
What Is Business Intelligence?
4
What Is Business Intelligence?

• Datagtinformationgtknowledgegt BI (Power)
• Convert data into actionable information to
  facilitate business decisions
• Business Intelligence is the process of
  converting data into actionable knowledge for
  real-time management of business.

5
Business Intelligence Pyramid
6
The Travel Industry is Complicated

• Multiple commodities
• High personal impact on travelers - dealing not
  only with services and products but before all
  people
• Data aggregation is complex - Many sources of
  data but not aligned
• Perishable inventories, another dimension Low
  Cost
• Big spend item - 3rd largest controllable expense
• Large number of low value transactions
• Dynamic and complicated pricing
• Content and spend fragmentation
• Significant cost-reduction pressure direct
  impact on cost of sales
• Sophisticated and stressful negotiations
• changing landscape of the industry with
  bankruptcies, consolidation, "partnerships" etc.

Complexity creates problems, but it also provides
opportunities to create value, data consolidation
- management are key
7
From data to travel intelligence

• Add new variables
• Market
• Supplier capacity
• quality and contracted rates.
• Market Price index
• Force Majeure Events
• Fuel/ security/ airport surcharges
• Travel Program goals
• Bench marks
• Acquisitions/divestments that impact volume and
  routes
• Non-compliance to travel policy

• Traditional approach
• Total Booked Spend
• Average Ticket Price
• Average Room Rate
• Average Car Rental Rate
• Top 10 Suppliers
• YOY comparison

8
Travel Intelligence?

• Pre and post trip travel spend data consolidation
  
• Procurement tools benchmarking to make
  profitable supplier decisions VBM based saving
  measurements
• e.g. Air tickets Vs hotel nights
• Card spend Vs booked spend,
• PNRs with hotel booking Vs Total PNRs.
• Average day in advance purchase
• Advising consulting industry updates, future
  trends and process efficiencies
• Expense Management
• Moving from Hype to Reality

9
Class Benchmark by Division
10
Restricted class Air Tickets
11
Class of travel policy
Show the Pain vs. Gain Trade-off
12
Identify Saving Opportunity through External
Benchmarking
13
End result of Travel Intelligence

• Rational Discounts/ Pricing
• Price Variance Explanations
• Program Savings at Risk Opportunities
• Policy Implications
• CSR initiatives Environment, Carbon Emission
  Tradeoffs etc.
• Data privacy, security risk management
• Credibility Auditable results

14
Five common and costly Business Intelligence
mistakes

• Underestimating/ overestimating the importance of
  data.
• Pushing Too Many Reports
• Poor quality datagtreports
• Falling For Pretty Pictures
• Choosing Cost and Convenience Over Quality
• Shadow BI Pervasive Use of BI Can Have a
  Downside

15
Supplier differentiation is data a new edge?

• Increased use of Business Intelligence will
  cause an Industry Evolution a set of smarter
  buyers and suppliers
• Smart buyers will increasingly use Business
  Intelligence to make better decisions data is an
  important part of BI
• Suppliers will also gain by getting better
  quality of feedback from customers, thereby
  improving their ability to manage accounts

16
Supplier differentiation

• Focus not only on quality data standards, but
  travel intelligence more complexity requires
  better business intelligence tools
• Increase the speed of providing the data, e.g.
  pre trip reports
• Build competencies to manage complexity
• Premium will be on high-value quality analytics
  and consultative role
• This will lead to tougher negotiations, but
  result in
• better decisions at lower costs

17
Why Integrate The Data?

• Integration Improves Spend Visibility
• The Agency data has better analytical value
• The card data has better total coverage.

• Together they give us
• Incremental volume on suppliers can be leveraged
  for
• better discounts
• Comparison of booking activity by alternative
  channels,
• which offers a better price
• Booked Vs. Billed Rate Audits

18
When should you integrate the Data?

• Whenever the estimated savings on the invisible
  spend is more than the cost of an integration
  effort.

19
Key Integration Steps

• Push as much spend as is possible to the
  preferred suppliers including card(s)
• Build an integrated data model
• Build the pipes from the data sources into your
  integrated data model
• Build integration rules for matching and
  enhancing data
• Test and validate the results

20
Corporate Card Program, Regional footprint
21
How to make Business intelligence pay off

• Smarter managed travel programs
• Stronger management support
• Purchasing performance measures must be
  transparent and communicated throughout the
  organization
• BI measures must be aligned with all stake
  holders within and outside the company
• BI performances measures must be dynamic,
  aggressive and comprehensive
• These must be must be backed up with appropriate
  resources, tools and resources and systems
• Purchasing performance measure must be championed
  by strong leadership

22
QA