IS 6800

5 NOVEMBER, 2004

Group 1:
Dave Ouellette
Paul
Hippenmayer
Rick Morgan1
 DAVE
OUELLETTE

2
 What is Business Intelligence?
• Systematic business information
acquisition and analysis*
– Also called Competitive Intelligence,
Corporate Intelligence, Market Intelligence,
Market Research, Data Warehousing,
Knowledge Management

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*Hannula et al., Journal of American Academy of Business 2(2): 593-599, 2003
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 Trade Secrets

The term trade secret means all forms and types of financial business,
scientific, technical, economic, or engineering information, including patterns,
plans, compilations, program devices, formulas, designs, prototypes, methods,
techniques, processes, procedures, programs, or codes, whether tangible or
intangible, and whether or how stored, compiled, or memorialized physically,
electronically, graphically, photographically, or in writing if
• the owner thereof has taken reasonable measures to keep such
information secret; and
• the information derives independent economic value, actual or potential,
from not being generally known to, and not being readily ascertainable
through proper means by, the public. *

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* Economic Espionage Act of 1996
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 Publications

Conferences
Knowledge
Internet

Business Info
CI
Internal Data & Trade Shows
Trade Secrets

Tangibles Intangibles

Competitive Advantage 9
 Paul
Hippenmeyer

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 CCF
AIM-9/AFMSS

Knowledge Management

Data Warehousing

Internal Data &

Avery Dennison Trade Secrets

Kodak

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 Is BI Important?
• # 1 or 2 Application and Technology
development issue as ranked by 301 IT
executives*
• Conventional Wisdom: Enabler of
competitive advantage via IT intensive
processes

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*Luftman and McLean, MIS Quarterly Executive, 3(2): 89-104, 2004
 Internal BI
• Market Intelligence, Market Research, Data
Warehousing, Knowledge Management
• Originally designated DSS (Decision Support
Systems) or EIS (Executive Information
Systems)*
• Software has been specialty product
– Seeing consolidation of smaller companies
• Internet has changed access to information.

* G. Philipson; www.theage.com.au/articles/2003/08/04/1059849328310.html?oneclick=true

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 Evolution

 1990s: IT developed ERP, CRM, SCM

 Late 1990s: IT enabled data warehousing
• Transaction intensive businesses (retail, telecom,
financial)
 2000s: Above is commonplace

Now: How to capture information for strategic

advantage?

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 BI Software*
• Major Software Companies
– Cognos
– SAS Institute
– Business Objects
– Hyperion
• Companies to Watch
– Microsoft, Oracle, SAP

* G. Philipson; www.theage.com.au/articles/2003/08/04/1059849328310.html?oneclick=true
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 Software Projections*
• 8.5% growth rate for the next 3 years
• Advancing on three fronts
– Mine data in real time
– Predictive analytics
– Unstructured data searches (text and internet)

* The Economist, June 10, 2004 (www.economist.com/science/tq/displayStory.cfm?story_id2724407)

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 MSI* Applications

• Focus
– Financial (locating fraud, bundling products)
– Catalog retail (bundle catalog mailing to save
costs)
– Athletics (past performance predicts future
success)

*MSI Systems Integrators, Omaha, NE. 17

 MSI Approach

• Collect Data
• Clean the Data (right data entry in right places)
• Transform (all codes compatible)
• Build Storage and Processors
• Statisticians
• Queries
– Data Mining/Discovery (open search)
– Decision Support (hypothesis testing)

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 Rick
Morgan

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Publications

Conferences

Internet

Business Info

Trade Shows

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 Sources of external BI:
PUBLICATIONS
(magazines, newspapers, trade pubs)
CONFERENCES/TRADE SHOWS
INTERNET
OUTSOURCING

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 OVER RELIANCE ON THE INTERNET
Good:
•SAFEST (FEW ETHICAL GRAY AREAS/PUBLIC DOMAIN)
•CHEAP
•ANONOMOUS
•APPEARS EFFICIENT

PITFALLS:
•Possible misinformation
•Some avenues limited to only what
competitor wants you to know
•Encourages “path of least resistance”
mentality
Fleisher, Blenkhorn; Controversies in Competitive Intelligence, the Enduring Issues;
Praeger Press, Westport CT 2003
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“Toooften, too much time is spent
on collection or research, leaving
inadequate time for analysis” Myburgh

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THAT ETHICAL THING

Legitimate
Misrepresentation
Improper Influence
Improper Means
Unsolicited
“Others”
(Comai)
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Federal Law
Uniform Trade Secrets Act of 1985 (UTSA)
Economic Espionage Act of 1996 (EEA)

Provide legal protections for corporate trade secrets

IF
•Company takes reasonable steps to protect them
•Information hasn’t been publicly released or
disseminated

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 Trade Secrets and the Federal Law

25 June 2003: “Two Former Boeing Managers

Charged in Plot to Steal Trade Secrets from
Lockheed-Martin” (US Dept of Justice)
•Boeing accused of unethical conduct during bidding
process following improper acquisition of proprietary
Lockheed documents

•RESULT: Boeing stripped of seven missile launches

in favor of Lockheed-Martin, losses approx $1B in
contracts and an indefinite suspension of future
contracts

US DOJ Press Release 25 June 2003

Washington Post 25 July, 2003

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AIR FRANCE

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AIM-9 SIDEWINDER AFMSS

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 Business Intelligence
Is It Worth It?
• Hypothesis: Ability to mine internal and
external data can lead to business
advantages
• Issue: How to measure value?
– Only 13% of respondents said they calculate
ROI*
• 37% planning to do so

* W. Eckerson, Journal of Data Warehousing 8 (4): p 64. 2003. TWDI Conference Survey, 2001 29
 Expectations from BI*

Survey of the top 50 Finnish

Companies

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*Hannula et al., Journal of American Academy of Business 2(2): 593-599, 2003
 Difficulty in Measuring ROI
• BI solutions deliver more intangible benefits
than tangible*

* W. Eckerson, Journal of Data Warehousing 8 (4): p 64. 2003 31

 Business Intelligence
ROI
• How to determine value?
– Start with a purpose
– Result must be measured as “net present value of the
after-cash flows associated with the investment”*
• Increase revenues or decrease costs
– Example:
• BI improves forecasting decreased inventory
• BI helps customer segmentation decreased
customer acquisition, increased revenues,
increased customer lifetime.

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* Williams, S. and Williams, N., J. Data Warehousing 8(4): 30-39, 2003
 Preconditions for ROI*
Business Preconditions

Strategic Alignment Process Engineering Change Management

Business Value of Business Intelligence

BI Technical Development BI Project Management

Technology Preconditions

* Williams, S. and Williams, N., J. Data Warehousing 8(4): 30-39, 2003 33

 Enhancing ROI
• Key: Finding the right BI resources at the
right price*
– Outsourcing and Off-shoring
• Worldwide skills
• Applications (OLAP, ETL, DBA) becoming common
• Size of project (transaction cost); Internal
competencies; move only non-critical aspects

* Dodds, J. Data Warehousing 8 (3); 32-37, 2003 34

 Best Practices

Eckerson, W. Best Practices in Business Performance Management: Business and Technical Strategies 35
(http://www.dw-institute.com/print.asp?id=7105)
It will not do for an army to act without
knowing the opponent’s condition, and to
know the opponent’s condition is
impossible without espionage
Sun Tzu

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QUESTIONS?

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BACKUPS

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 DEFINITIONS
Business Intelligence: Overarching term covering all facets of the data
gathering, acquisition and analysis in order to gain competitive
advantage.
Competitive Intelligence: Information external to the company that can
be used to gain a competitive advantage
Internal Intelligence: Information inside the company, including
corporate metrics (such as sales, financial & marketing information) and
trade secrets, that can used to gain a competitive advantage
Industrial Espionage: The actions of a foreign government to acquire
information on a company in order to gain advantage for its own
industry. (CIA)

Corporate Espionage: Legal corporate information gathering

Business Espionage: Illegal corporate information gathering (CIA)

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BOOKS SOURCES
Fink, Steven, Sticky Fingers, Managing the Global Risk of Economic Espionage, Dearborn, Chicago 2002.
Fleischer, Craig and Blenkhorn, David L., Controversies in Competitive Intelligence, the Enduring Issues, Praeger, Westport CT,
2003
McGonagle, John J., The Internet Age of Competitive Intelligence, Quorum, Westport CT, 1999

REFERRED JOURNALS
Attaway, ”A Review of Issues Related to Gathering and Assessing Competitive Intelligence”, American Business Review, 16 (1)
Jan 1998
Awazu, Yukika, ”Informal Roles and Intelligence Activities; Some Management Propositions”, Journal of Competitive Intelligence
and Management, Vol.2, No.1, Spring 2004.
Comai, “Global Code of Ethics and Competitive Intelligence Purposes: an Ethical Perspective on Competitors.“ Journal of
Competitive Intelligence and Management, 2(1), Spring 2004.
Dijcks, Jean-Pierre, “Integrating Data Warehouse Process into the Overall Management Infrastructure”, Business Intelligence
Journal, Summer 2003, pp56-63
Fitzpatrick, Uncovering Trade Secrets, “The Legal and Ethical Conundrum of Creative Competition”. S.A.M. Advanced
Management Journal, Sum 2003 68 (3).
Hammond, Mark, “Ford’s Business Assistance Center Hits the Fast Lane”, Business Intelligence Journal, Winter 2004, pp49-52
Hatcher, Don and Prentice, Bill: “The Evolution of Information Management” Business Intelligence Journal, Spring 2004, 9,2,
pp49-56.
Luftman and McLean, MIS Quarterly Executive, 3(2) 890-104, 2004
Luthra, Anika and Desouza, Kevin “Intelligence Sharing in Virtual Teams: Managing Organizational Effects of Technology”, Journal
of Competitive Intelligence and Management, Vol1 No.3, Winter 2003, pp1-9.
Nakra and College, “Info-Terrorism in the Age of the Internet: Challenges and Initiatives”. Journal of Competitive Intelligence and
Management, 1 (2) Sum 2003.
Cobb, Pamela; Competitive Intelligence Through Data Mining” Journal of Competitive Intelligence and Management, Vol.1 No.3,
Winter 2003, pp80-89.
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SOURCES (Continued)

OTHER JOURNALS & WHITEPAPERS

Cooper, et at. “Data Warehousing Supports Corporate Strategy at First American
Corporation”, MIS Quarter.y Vol 24 No4, pp547-567, Dec 2000
Erickson, W. Journal of Data Warehousing 8 (4): p64
Hannula et al., Journal of American Academy of Business, Vol2, 2, 2003, pp593-599,
Myburgh, Sue, Competitive Intelligence: Bridging Organizational Boundries. Information
Management Journal, Mar/Apr 2004, pp46-55
Williams, S and Williams N.J., Data Wearhousing, 8(4) 30-39, 2003
Wright, Phillip and Roy, Geraldine, Journal of Workplace Learning, 11 (2), p53
Wright, Phillip, “Industrial Espionage and Competitive Intelligence: One You Do, One You
Do Not”, Journal of Workplace Learning, Vol 11, Iss 2, 1999
(uncredited), Effective Business Intelligence Approaches for Today’s Business World, Gartner Group,
2004.

INTERNET
Eckerson, Wayne: “Best Practices in Business Performance Management: Business and
Technical Strategies” www.dw-institute.com. Viewed 24 Oct 04
Phillipson, G; www.theage.com.au/articles/2003/08/04105984328310.html viewed 25 Oct
04
www.theeconomist.com/science/tq/displaystory.cfm viewed 24 Oct 04 41