February 26, 2001, 12:39 PM — Shop At Home Inc. in Newport, Tenn., is deluged with customer information. Not only does it sell collectibles, gemstones and other items through its 24-hour television broadcast, but it also has a companion Web site -- Collectibles.com -- that lets customers order items or chat live with the show's hosts.
"We have so many channels that a person can come through that we have to understand the demographics and the program mix," says Lee Martin, vice president of systems development at the company. For example, he says, do customers order on the Web or on television, or is there a mix? Do more products sell on the Web vs. television?
Even more important to the broadcast and e-commerce company is balancing its average price point with its volume of combined phone and online orders. Right now, its price point is just less than $200 to attract higher-end jewelry buyers. But if it goes too high, call volume suffers.
"We have to look at our product mix from a strategic standpoint to best achieve profitability," Martin says. "And the only way we can find out that type of information as quickly as we need to is a business intelligence system."
What They Are
Simply put, business intelligence systems quickly and cost-effectively supply users with information to make strategic business decisions. Such systems encompass a range of software, starting with the extraction, transformation and loading tools that pull data from transaction systems and either prepare it for analysis or feed it into data marts or warehouses.
Data modeling is also involved, whether you plan to use a proprietary multidimensional database or a relational database. The business intelligence tools themselves range from complex query/analysis to simple reporting tools. They display information graphically so business users can quickly recognize key trends.
For an IT professional looking to get into the business intelligence field, many of the required skills are similar to those used in data warehousing.
"There are a lot of business intelligence tools out there," says Sharon Sibigtroth, managing director of strategic data management at New York-based AXA Financial Inc., a member of Paris-based AXA Group, one of the world's largest providers of insurance and financial services. "The issue becomes, 'Do you have the right data, and have you used good design principles behind the database that the tools are going against?'"
AXA is currently breaking up its large DB2-based data warehouse into data marts focused on functional areas so users can take advantage of business intelligence tools from the likes of Cognos Inc. in Ottawa. With as many as 4.5 million customers, AXA is trying to provide employees with an in-depth understanding of its customers from profitability, retention and cross-selling perspectives.