Business IntelligenceMBA 664Team BI

Dave LooneyMatt Lauer

Shaun WestfallMike Laughman

Introduction

• What is Business Intelligence (BI) ?– Definition– History of BI– Systems, tools, and strategies– Business applications

• MeadWestvaco• Credit Card Fraud Prevention• International Truck Knowledge Management and

Benchmarking

Definition

• Business intelligence (BI) refers to those systems that support and improve the decision making process. It goes beyond just acquiring, processing, and manipulating mission critical data. BI utilizes different systems and tools so that users can read and interpret the data, and then make decisions based on their interpretations.

In other words…• Business intelligence (BI) is about having

the right information available to the right decision makers at the right time

• BI is an effective way to link systems that “do not talk to each other” from a reporting perspective

• It is the enterprise-wide environment that supports reporting, analysis, and decision making on a multi-dimensional basis

History• The term “Business Intelligence” is relatively new

• The concept of using technology to solve problems or make businesses more efficient is nothing new

• The advent of “end user computing” brought IT solutions from the backroom onto the manager’s desktop

• Enterprise wide technology shifted focus from individual silos to the business as a whole

• Emergence of global processes brought about the need for standardization of data resources and centralization of systems

• As technology evolves, the potential for business enhancement through the use of BI continues to grow

Systems, Tools, and Strategies • Customer Relationship Management

– Method to optimize relationships with customers using IT technologies or business models

• Data Mining– Extraction and analysis of data to establish

relationships and identify patterns• Data Warehousing

– Separate database dedicated to decision support• Knowledge Management

– Use of IT technology to organize, manage, and distribute information in order to meet the needs of users

Systems, Tools, and Strategies • Packaged BI Tools

– Software packages such as Crystal Reports, E-Analytics Portal, etc. in the business intelligence arena

• Reports/Queries– Programmers can not pre-design all reports and queries– Provide ways for users to more easily create these on the fly

• Text Mining– Making information more easily available and searchable in

order to take more advantage of information

• Web Mining– Integration of information gathered by traditional data mining

techniques with information gathered from the internet

Quick MWV Background

• Mead and Westvaco merged in 1/02• Legacy Help Desks eliminated, new one began

9/02 centered in Dayton, OH• 35,000 employees operating in 30 countries• One support number with new focus

Current Process

• Managers track analysts on the phone with application

• Analysts track incidents through different application called Powerhelp

• Reporting on both can prove to be difficult and also are not interrelated

• Example of Powerhelp

New Process

• Managers will be able to better compare the phone and Powerhelp activity of each analyst

• Analysts will have more efficient use of large amount of data for assistance

Credit Card Fraud Prevention

The use of Business Intelligence has been a positive force in preventing credit card fraud.

There are two types of fraud common to the credit card industry:

• Card Theft (Visa/Mastercard)

• Identity Theft (Private Label Credit)

**This example focuses primarily on Identity Theft**

Definiton

Identity Theft or True Name Fraud involves the illegal use of an actual person’s information to obtain credit.

• For Private Label accounts (ie Lowes Card, Exxon Card) this is seen almost exclusively on “instant credit” or point of sale applications

Instant Credit--Issue

Instant Credit leverages technology to automate the process of credit application input, credit review, and purchase authorization.

• Instant credit is the driving force behind private label credit

BUT• Ease of application creates exposure to

fraud

How does BI help? Early steps Data Warehousing:

Gather as much data on previous fraudulent activity and make it available for analysis

Data Mining:

Trends and patterns for fraudulent activity are identified (Geographic ‘footprint’, type of purchase, application data) and flagged in application system

PROBLEM: These are reactive solutions, Fraud perpetrators move too fast. DRIP factor (data rich, info poor)

Proactive Uses of BI:

Neural Nets (Packaged BI Tool)• Combination of multiple data sources by

3rd party vendors with real-time access allows instant flagging of ‘hot’ fraud info

• Allows for purchase trend analysis across multiple merchants/banks using the same data elements

*Credited for a 70% drop in all credit card fraud by US Bancorp from 1992 to 2003

Adjustable Scoring Thresholds :

• Integrated software allows for previously observed fraud patterns to be integrated into credit scoring

• Can be defined differently for each client, industry, or product based on contracts and loss sharing agreements

Proactive Uses of BI:

Different types of merchant and products see varying levels of fraud (Jewelry vs. Carpeting)

Conclusion

• Credit Card fraud became a problem as a result of criminals taking advantage of advancing technology

• Business intelligence provides solutions for these problems when it is integrated into a comprehensive, proactive package

BI Influencing Business

• The BI field of Knowledge Management is an excellent example of how the use of BI influences an organizations strategy.

BI = Knowledge Management

• Utilizing the results of data mining and BI research into organized reports and graphs and deploying the knowledge throughout the entire organization.

• Knowledge Center - Separate facility that provides data on all aspects of competitive vehicles.– Benchmarking – Purchase or lease competitive vehicles and

disassemble these into component parts to establish piece part costs and estimates for total process costs.

– Results “Best-in-Class” ranking given to the particular system being studied (Cab Interior, Axles/Frames, HVAC)

– Provides knowledge of our products & processes as compared to our competitors or the industry.

BI Influences Strategy

• Next Generation Vehicle (2001)– The drive to be “Best-In-Class”

• Truck Assembly (Partially Core Business)– Benchmarking comparisons yielded a more “automotive”

process for NGV. “Modularity” & “Option Packages”

• Cab Painting (Core Business)– BI/Benchmarking Cab paint resulted in a fully automated e-coat

and paint application system.

• Cab Manufacturing (Core Business)– BI/Benchmarking resulted in moving Cab/Truck manufacturing

toward an “automotive” type process.

– Benchmarking “Best-In-Class” included automotive companies.

BI and Cab Mfg Strategy

• Current Process– Poor quality of stampings

• Design requires multiple presses/dies.

• Long die change time.

– Poor cab dimensional quality (repeatability)

• Interior trim panels

• Windshield

– High Manufacturing Cost• Over 50 HPU

• Facility over 100 years old.

• Best-In-Class Vision– High Quality Stampings

• Minimum # hits to make parts.

• 10 Min die change time.

– Cab Quality (+/- 1mm)• Luxury car quality (Lexus)

• Slip joint design to maintain quality.

– Minimize cost to produce• New “lean” facility

• State-of-the-art automated process.

BI & Competitive Advantage

• Stamping Operations– Class A panels made in 4

hits or less. (BIC)– Small lot size runs with dies

change < 6 minutes (BIC)– Fully automated - only 6

people required to produce parts for 200 cabs. (BIC)

– Currently listed in top 10 most efficient stamping lines in the world.(#1 in Truck)

BI & Competitive Advantage Cont.

• Body Assembly– BI research resulted in

partnering w/ Nissan for Body Engineering.

– Dimensional Quality +/- 1mm – (BIC Quality)

– Full Cab Assembled for 5 basic models and more than 20 model variations.

– Cost / Hours Per Unit• From 50 HPU to 4 HPU

– Full complement of cabs for all Medium Duty products.

– Reduce Time-to-Market.

BI Today

• Stamping Operations continues to benchmark against other world-wide operations.

• Benchmarking for Operational Excellence.

• Planning for new model introductions with Heavy Duty and Medium Duty products.

Conclusion

• Business Intelligence– Definition– History– Systems, tools, and strategies– Business applications

• If used to influence strategy, can provide a competitive advantage.

Questions?