The competitiveness of a business in the changing business environment is dependent on the quality of decisions that its managers make.
When making business decisions, there is need to use past and the present to make futurist decisions. This calls for a pool of information to be available for interpolation and analysis. Use of information technology can keep such important information; Business intelligence tools are the tools that a business can use to keep such information to be used in decision making. It is thus important for the company to adopt business intelligence tools.
Chrysler Group LLC is an automobile company that was incorporated in 1925. It has its headquarters in Detroit, Michigan in United States of America. It is ranked the thirteenth successful motor company in the world. Seven years in the last ten, the company’s sales have been decreasing (see appendix 1).
The trend of sales is a reflection of how competitive the motor industry has become (Chrysler official website, 2010). The competitiveness of a business is vested on the quality of its management decisions. A number of systems that aim at meeting a certain objective in the business arena have been developed. They are either home-made or all user systems (commercial systems). Business intelligence is the name used to refer to the total collection of such system; it was first coined in September 1996, in Gartner Group report.
To make informed decision there is need to have reliable information (Olszak & Ziemba, 2004). This report focuses on how information technology (Business Intelligence tools) can be used to support decision-making in Chrysler Group LLC; it will look into how Toyota motor company has benefited from use of information technology.
Business intelligence is a term used to refer to a collection of applications that aim at keeping and making available a data bank in a certain industry or organization; the bank is referred to when decisions are made. When developing the database, the initial stage is information gathering, then sorting the information, analyzing it, and finally making it accessible for use. Business intelligence can be used in the general strategy of a business or a certain area/department in an organization. The major benefit that a company derives from using business intelligence tools in the right way is competitive advantage. This is because a firm has access to information that assist in making informed, current, and futuristic decisions (Kimball & Margy, 2002).
Business intelligence tools take two angles; custom-built tools and commercial reporting tools. Whichever the category they are meant to keep custody and give access to certain information from data warehouse maintained in a company for better decision making. Custom-built soft wares are developed in a company and aims to keep and avail certain information, to limited people working in a certain area or organization; commercial reporting tools are developed for sale to help in a specific line of business; they are made in such a way that they can be integrated in the system operating in a business. An example of a commercial reporting tool is Oracle, Reporting and querying software, and ORAP. Word access (spreadsheets) fall in the category of business tool; it has the widest use.
Different industries require different information, thus different system with varying levels of data rights are used (Ganczarski, 2009). Despite the numerous advantages that come along with an effective business intelligence tools, making a decision to implement one is a complex decision. It requires information technology experts as well as huge capital investments.
If the process is not well implemented, it can have a negative effect to a business. The initial stage when implementing one is recognition of a need situation in a business. After the problem has been analyzed, a computer expert is involved for advice/to develop a suitable package. When making decisions, managers need to be informed and have reliable past, current and futurist data. With futuristic decisions, a company is likely to satisfy its current and future customers. When making strategy for a company, there are generally three approaches; cost strategy, differential strategy, and flow strategy. In a cost strategy a company aims at improving its efficiency to a level that it becomes the least cost producer. In a differential strategy, the business aim at getting unique products that will attract the greatest number of customers and meet their need.
A BI system offers a chance to analyze the trends of customers and thus a business will always be ahead of its customers and competitors in their products. This will eventually give the business an upper hand. Flow strategy is all about establishing a certain area that has un-tapped market then entering the market. When there is data, a business will always be aware of emerging opportunities in the business world, venture into them after analyzing them using the available data (Suttons Group of Companies, 2010). Other than data on the trends of business, BI system assists a company to gauge its level of relationships with suppliers and customers. The enhanced relationship assists in making decisions that aim at strengthening the relationship and eventually gain customer loyalty (Davenport & Jeanne, 2009). There are some usability issues with business intelligence systems; when a company decides to adopt a certain Business intelligence tool, it has to incur huge capital investments in-terms of buying computer hard-wares, buying/developing the soft-wares and training of staff. This is incurred with the hope that the benefits to be derived from the system will be higher than costs.
However, this is not always the case. There are certain issues that are associated with the system. When developing a database, data is gotten from different institutions and companies that have different reporting styles and standards. This influences the reliability of the data stored. If the data had been skewed in a certain direction, then it is more likely to influence decision making toward/outwards that direction that may not be necessarily the right direction. Biasness from a certain area can be transferred from a company of inefficiency to other companies in the same industry. For example in a credit business intelligent system whereby banks shares borrowers information, if a certain bank had a bad experience with a certain group in the economy say teachers, the information will affect others banks decision when lending teachers.
The reason for the above bad experience may be a certain internal issue with the bank. The solution for this is vetting the vendor of the software to ensure that only reliable vendors are used. A reliable data warehouse is the most important part business intelligence. It is dependent on the quality and relevance of data that is stored. If the data is not right, then decisions will be based on flawed data.
The Case of Suttons
Suttons is the number one Holden producer in Australia; it was incorporated over 60 years ago and now with 17 dealerships covering 13 different new marquees, notably Holden. Across its 21 divisions the company employs over 1200 staffs. To remain the leader the company has invested in technology, and aims at improving its staff to make them better employees. Management encourages multitasking among employees. The company has a well cut career path as a measure to motivate its employees (Suttons Group of Companies, 2010). Let’s look at the process that is undertaken when it has sold a car; The car is strategically placed in the show room to ensure that target customers can see it, every details of the car are recorded at the vicinity of passersby. When a customer avails himself to buy the car it is recorded as a sales in the book (quick book). The company has to pay a portion of the amount gotten to advertisers who are centralized.
Car is bought from the manufacturer. This may be a car on order or for show room. When the car reaches the show room it is recorder as a purchase (they use Quick books)
Analysis of These Findings
When a company decides to develop an organizational BI strategy, it should ensure that there is a real issue that the system aims at addressing. There is need to think broader and appreciates that an effective system will affect areas linked to revenue generation and those that are not. When a system is developed, it points on areas that a company is doing well and areas that require improvements. If this is done, then the quality of decision made will be improved. On the other hand, there is an effect on customers and creditors.
All this must be looked into when developing this system. Information in an organization has different uses; there is information that is confidential to high level managers and other that is freely available to all staffs, the use of password and rights of access has been used for long to limit access. Though they are good strategies, in the era of computer hacking, there is need for more security to be deployed. Regulating access assists in maintaining data integrity and boosts its reliability. The data is also protected from leaking to competitors. Despite many advantages of developing a good data warehouse, maintaining the integrity of the data is an important part of the process. When a system is developed whether it is custom-built or is a commercial product, it has to be user friendly.
The people who will be using the system should be well trained to ensure that they understand the system. If a system is developed well, then it will enhance making more informed decision (Srivastava & Cooley, 2003). For example Toyota has adopted BI in its processes; Toyota was incorporated in 1937 in Japan by Kiichiro Toyoda; it has grown to be the world number one automobile provider.
It assumed the number one automobile producer in 2008 after it surpassed general motors. The company operates on a five principal policy; Kaizen (continuo’s improvement), teamwork, Challenges, Respect and Genchi Genbutsu (go and see). As long as computerization was developed, the company has continuously adopted technology. Up-to 1999, the company’s IT employees and research analysts used to run reports that took days even weeks to make.
In 2000, cooper, the company’s data manager, accepted a proposal from a staff to acquire Oracle database and Essbase software. They were both developed by Hyperion business-intelligence Company. The same year of implementation, the systems bore fruits; an analysis discovered what can be referred to as an “honest” mistake whereby railcars were scanned twice resulting to billing twice. The tread had continued for a while, but the company had not realized what was going on. On the other part the billing company had no ill motive but it had not realized what was going on. Immediately the company saved $800,000.
With this breakthrough in shipment management a decision to embrace BI tools. In 2001, the company decided to deploy a technology expert Mike Burkes; in his word he said that the difference between the old system and the new one is that the new one was able to pinpoint hot spots in the system and give managers room to look for solutions in those areas. He equated the system to traffic lights, where green represents a good practice; yellow an acceptable one and red, danger.
Advancement in technology has enabled more users’ friendly and result-oriented soft-wares. Companies are increasingly adopting the systems. Most big companies have gone a step ahead whereby they have an officer, in the management level who is the custodian of data and information. He is mandated with not only with the electronic data but also human data.
As employees interact with customers they are supposed to record and forward more data to the officer. The department works hand-in-hand with research and development department to ensure that the data in the system is updated. Other than relying on the database alone, a tread is taking course whereby after a certain issue has been raised by employees or the research team, data is looked for.
Experiences are mostly mounted together and develop a pool of wisdom that helps in decision making. In future business intelligence will take a different approach but the baseline remains the same, providing data to be utilized when making decisions. Their continued use will lead to better ways of doing business, efficiency and customer satisfaction.
Decisions are the driving force in an organization. The quality of decision that managers make give their organization direction and focus. The growth and competitiveness of an organization is influenced by the quality as well as acceptability of decisions made by managers at all levels. To come up with a good decision there are three main stages that a manager should follow they are; defining the problem, data collection and choosing the best alternative.
To make the decision there is need to have a pool of information required for the decision. Business intelligence tools are the tools that a business can use to keep such information to be used in decision making. It is thus important for the company to adopt business intelligence tools. Toyota Company has implemented the system and it has transformed made the company competitive in the world market.
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Sales for the last ten years
YearsSales in $ (000)Change20002001200220032004200520062007200820092010 2,522,6952,273,2082,205,4462,127,4512,206,0242,304,8332,142,5052,076,6501,453,122931,402720,140 ¡4.4%¡9.9%¡3%¡3.5%^3.7%^4.5%¡7%¡3.1%¡30%¡36%–