store, extract, manipulate,
analyze and communicate data and information of all forms by firms across
industry sectors. As a result, organizations around the globe have greater
accessibility to increased amounts of information than any time in the
past. Because of the complementary nature of the IT spectrum mentioned
above, firms can better transform vast amounts of data into a more vital
asset, information, that ultimately enhances the knowledge level of
individuals across functional areas of an organization. As the information
economy has evolved, the noteworthy progression of which began in the mid
1990s', economists, analysts and business leaders have devoted time and
effort to identifying how the implementation of IT can increase the
efficiency or productivity of a given enterprise. Many have referred to
such innovations that have replaced factors of production in a direct
sense, (e.g. labor displacing technology such as ATM's) as a primary
driver of productivity growth. However, another source of corporate
productivity comes in the form of "reducing the uncertainty of the
business process". This idea refers to the process of accessing value
added, firm-relevant information in a timely manner. The availability of
accurate information enables decision makers across functional areas to
better understand the important factors that impact the bottom line of
their activities. A clearer picture of those factors enhances their
ability to devise and implement policies that more accurately address the
problems of a given process or augment successful processes to new levels.
The proper utilization of Information Technology therefore increases the
overall "Business Intelligence" of a given organization.
Enhanced business intelligence helps reduce the uncertainty of those
issues that really affect day to day operations at the firm level. Keep in
mind however, that one of the pitfalls of the evolution of the information
economy has been the proliferation of a variety of buzzwords and phrases
that depict nothing more than a rehashing of commonly accepted practices.
Does Business Intelligence fall into this category? The answer is no, for
all one needs to do is analyze the growth, innovation and implementation
of the spectrum of technologies that comprise this space to see the
dynamic and tangible value added it provides to corresponding
organizations. Firms of all sizes and industry types are utilizing these
technologies to help augment their operations to compete, survive and
thrive in this new dynamic economy.
"Data mining and Business
Intelligence: A Guide to Productivity" helps describe the process by
which firms can increase their efficiency by implementing "state of
the art" IT. More specifically, it focuses on the high-end analytical
software technologies, referred to as data mining, and how it, along with
other applications such as On Line Analytical Processing (OLAP), can help
decision makers extract information and knowledge from the vast amounts of
data they collect on a day by day and minute by minute basis. This work is
not written in a technical style but rather addresses the applied
methodology behind properly implementing data mining techniques in the
corporate environment. It provides an introduction from where the
technology evolved (it's theoretical base), an overview of the dominant
methodologies that comprise the data mining spectrum and every day
business applications where it can produce a value added. By doing so it
bridges the gap between the important theoretical academic world and that
of the applied side of the business environment. As was mentioned
previously, we are undergoing a transformation in the world of commerce,
which involves the evolution of e-commerce. This work has not ignored this
growing phenomenon and addresses the issue of data mining in an e-commerce
environment as well, connecting the more traditional "Brick and
Mortar" firm structure to the growing "Click and Mortar"
enterprise. "Data mining and Business Intelligence: A Guide to
Productivity", seeks to provide a greater understanding of what
various forms of information technology offer to the world of business in
the evolving information economy. By connecting the technological
functionality to prevailing underlying business applications, which
incorporate traditional business and economic theory, we hope to
illustrate the full potential of data mining and Business Intelligence in
achieving increased efficiency for the firm.
CHAPTER
6 Turning Your 'Brick-and-Mortar' Into a 'Click-and-Mortar'
Contributed by Engage, Inc.
“As
Web ventures begin to view personalization as ongoing processes rather
than discrete technologies,
investments
should be made for building a flexible data management infrastructure that
can accommodate a
variety
of consumer data and analytical techniques.”
Jupiter Communications
June,
2000 Report
The
Establishment Goes Wired
I
recently read an article about words and terms that evolved exclusively
from the American culture. This
piece traced the history of American-born verbiage throughout the 1900s
and into the year 2000. Not
surprisingly, many of the words that appeared in later years were some of
the most pervasive “buzz” words and terms of our Web-wild culture:
e-business, e-commerce, click-and-mortar, among others.
It’s daunting, really; no wonder some retailers are confounded by
what faces them as they ponder the move from offline to online.
But
you’ve spent millions of dollars implementing a customer relationship
management system to better understand your customers; their wants, their
desires, their buying habits. You’ve
used it to great success to build excellent offline customer relations.
You’re now looking for the next big opportunity, the jump into
something beyond what you’re currently doing.
The
previous chapter introduced the evolution of the information economy as it
addressed the progress of commerce from “brick and mortar” to “click
and mortar” corporate initiatives.
The key to the success of this process lies in the management of
data by transforming it into usable information and applying appropriate
business strategy. This
chapter provides a natural extension as it describes the process by which
organizations can achieve success on the internet through the use of data,
technology and sound management tactics.
E-commerce
vendors face two important challenges: driving up purchases and
maintaining customer loyalty. However, only 2.7 percent of browsers buy
from any given Web site and only 15 percent of those buyers return to buy
again (Forrester Research, Inc.). To succeed, e-marketers must find ways
to keep visitors on their sites. They must make the visitors’ experience
convenient, satisfying and personally relevant. Above all, they must
entice Web visitors to come back for more.
