Transcript Document

Slide 08.1
Chapter 08 Change Management
Chaffey and Wood Business Information Management © Pearson Education Limited 2005
Slide 08.2
Management issues
Typical questions facing managers related to
this topic:
• Are there typical responses of individuals to
organizational change which can be
anticipated and controlled?
• What are the success factors for managing
change associated with major information
management implementations?
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Slide 08.3
Learning outcomes
After reading this chapter, you will be able to:
• Identify models of response to change
associated with information management
initiatives.
• Assess the suitability of responses to
organizational change associated with the
introduction of new information management
approaches.
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Slide 08.4
Change management
• Approaches to managing changes to organizational processes,
structures and their impact on organizational staff and culture is
known as change management. Approaches to managing
change associated with information management initiatives is the
subject of this chapter.
• The high failure rates for information systems projects are often a
consequence of managers’ neglect of how users will react to new
ways of working.
• The need to manage change applies not only to new information
systems, but is critically important to all business information
management initiatives, whether it is the introduction of a new
enterprise resource planning system, an intranet facility for
knowledge management, conducting an information audit or
implementation of a policy to improve data quality.
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Slide 08.5
Types of change
Incremental change
Relatively small adjustments required by an organization in
response to their business environment
Discontinuous change
Change involving a major transformation in an industry
organizational change
Includes both incremental and discontinuous change to
organizations
Anticipatory change
An organization initiates change without an immediate need to
respond
Reactive change
A direct response by an organization to a change in an
organization’s environment
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Characterisation of organizational change
Figure 8.1 Characterization of organizational change
Source: Nadler et al. (1995)
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Four key types of organizational change
1. Tuning. This is an incremental form of change when
there is no immediate need for change. It can be
categorised as ‘doing things better’. New
procedures or policies may be used to improve
process efficiency i.e. to reduce time to market or
reduce costs of doing business.
2. Adaptation. Also an incremental form of change, but
in this case it is in response to an external threat or
opportunity. It can also be categorised as ‘doing
things better’. For example, a competitor may
introduce a new product or they may be a merger
between two rivals. A response is required, but it
does not involve a significant change in the basis for
competition.
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Slide 08.8
Four key types of organizational change
3. Re-orientation. A significant change or
transformation to the organization is initiated
due to discontinuous change. There is not an
immediate need for change, but the change is
in anticipation to change.
4. Re-creation. In re-creation, the senior
management team of an organization decides
that a fundamental change to the way it
operates is required to compete effectively.
Both re-orientation and re-creation can be
categorised as ‘doing things differently’.
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Slide 08.9
Business Process Management (BPM)
Business Process Management
An approach supported by software tools intended to increase process
efficiency by improving information flows between people as they perform
business tasks.
•
•
The BPM concept has been defined by Gartner (2003) as follows:
‘BPM is a methodology, as well a collection of tools that enables
enterprises to specify step-by-step business processes. Proper analysis
and design of BPM flows require a strong understanding of the atomic
business steps that must be performed to complete a business process.
As BPM executes a business process, these atomic steps will often
correspond to well-known business activities, such as checking credit
ratings, updating customer accounts and checking inventory status. In
effect, the BPM process flow is often just a sequence of well-known
services, executed in a coordinated fashion.’
‘Classic document workflow, which was BPM's predecessor, focused on
humans performing the services. Fuelled by the power of application
integration, BPM focuses on human and automated agents doing the
work to deliver the services.’
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Slide 08.10
Business Process Re-engineering (BPR)
Hammer and Champy (1993) defined BPR as:
‘the fundamental rethinking and radical
redesign of business processes to achieve
dramatic improvements in critical,
contemporary measures of performance, such
as cost, quality, service, and speed.’
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Slide 08.11
Impact of process innovation
• Willcocks and Smith (1995) characterise the typical
changes that arise in an organization with process
innovation as:
1. work units changing from functional departments to
process teams;
2. jobs changing from simple tasks to multi-dimensional
work;
3. people’s roles changing from controlled to
empowered;
4. focus of performance changing from activities to
results;
5. values changing from protective to productive.
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Slide 08.12
Different scales of change
Term
Involves
Intention
Risk of failure
Business process reengineering
Fundamental redesign of all Large gains in
main company processes
performance
through organization-wide
(>100%?)
initiatives.
Highest
Business process
improvement
Targets key processes in
sequence for redesign
(<50%)
Medium
Business process
automation
Automating existing
process
Often uses workflow
software (Chapter 2)
(<20%)
Lowest
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Slide 08.13
Kurt Lewin’s change model
1. Unfreeze or unlock from the present position
or behaviour by creating a climate of change
through education, training and motivation of
future participants.
2. Move quickly from the present state to the
new state by developing and implementing the
new way of working.
3. Refreeze by making the system an accepted
part of the way the organization works.
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Slide 08.14
Transition curve indicating the reaction of
staff through time
Figure 8.2 Transition curve indicating the reaction of staff through time
Source: BIM
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Slide 08.15
Common responses to change
• Aggression – in which there may be physical
sabotage of the system, deliberate entry of erroneous
data or abuse of systems staff.
• Projection – where the system is wrongly blamed for
difficulties encountered while using it.
• Avoidance – withdrawal from or avoidance of
interaction with the system; non-input of data; reports
and enquiries ignored or use of manual substitutes
for the system.
• Criticism – Concerns about the system are actively
voiced, although they may not be justified.
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Slide 08.16
Culture – Schein’s view
• Assumptions are the invisible core elements of an
organization’s culture such as a shared collective
vision within an organization.
• Values are preferences that guide behaviour such as
attitudes towards dress codes and punctuality within
an organization or ethics within a society.
• Artefacts are tangible material elements of cultural
elements. These will be identifiable from the
language used in the policies, procedures and
acronyms of the organization, and the spoken word
and dialects of the society.
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Four types of cultural orientation
1.
2.
3.
4.
Survival (outward-looking, flexible) – the external environment
plays a significant role (an open system) in determining
company strategy. The company will likely be driven by
customer demands and will be an innovator. It may have a
relatively flat structure.
Productivity (outward-looking, ordered) – interfaces with the
external environment are well structured and the company is
typically sales-driven and is likely to have a hierarchical
structure.
Human relations (inward-looking, flexible) – this is the
organization as family, with interpersonal relations more
important than reporting channels, a flatter structure and staff
development and empowerment being thought of important by
managers.
Stability (inward-looking, ordered) – the environment is
essentially ignored with managers concentrating on internal
efficiency and again managed through a hierarchical structure.
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Slide 08.18
Hayes 4 phase change model
1. Initial orientation.
2. Preparation.
3. Change implementation.
4. A supportive phase.
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Slide 08.19
Change strategies 1
Transition phase
Typical actions by
change managers
Implications for information management
applications
1. Shock/awareness
Create a climate of receptivity to
change. Announcement sufficiently in
advance in involving senior
managers.
Pre-announcement and involvement are readily
practicable for information management.
Announcement and ownership by a senior
manager is still important, even if project is not of
strategic importance.
2. Denial
Diagnosis of the reason for denial is
important. Gently support the staff
through denial. Repeat message of
reason for change and justify. Find
ways to get staff involved in change
early.
Involvement is typically a requirement of
information management projects, so this is
usually practical for some staff, for others
communication of the benefits and progress of
the project and the implications for them should
be considered.
3. Depression
Providing support and listening are
required at this stage rather than
ignoring complaints.
This stage tends not to be marked for information
management-related change projects.
4. Letting go
Continued explanation of the benefits
of the new system without
denigrating the past approach. Setting
targets associated with the new
system.
Around this stage prototypes of the new system
will be available which will help with the process
of letting go since tangible evidence of the new
system and hopefully, its benefits will be
available.
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Slide 08.20
Change strategies 2
Transition phase
Typical actions by
change managers
Implications for information management
applications
5. Testing
Testing is encouraged by
encouraging experimentation
without blame where problems
occur.
Testing corresponds to the testing phase of the
system or adoption of the new system dependent
on involvement. Positive or negative feedback
on the new system should be encouraged,
discussed and acted upon where appropriate.
6. Consolidation
This is facilitated by reviewing
performance and learning and
recognizing, rewarding and
communicating benefits.
Improvements achieved through the system
should be assessed and communicated.
7. Reflection and
learning
This is achieved through structured
learning about the change through
reviews and encouraging
unstructured learning such as
feedback about the system.
Post-implementation reviews can occur at this
stage. The use of a structured system to log
problems with the system or process can also
help.
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Slide 08.21
3 key stakeholder types
• System sponsors are the backers of the system or change in
approach. They tend to be senior managers whose role is to be
budget holders for the change initiative or responsible for a
successful outcome or both. They are committed to the change
and want to achieve success. The sponsors will try to fire up staff
with their enthusiasm and stress why introducing the approach is
important to the business and its workers.
• System owners are departmental or process managers in the
organization who will use the system to support their areas of the
business. For an enterprise system there could be several system
owners, for example a marketing director could be responsible for
the CRM component of an E-business system while the
operations director is responsible for the supply chain
management part of the system.
• System users. These are staff in the different areas of the
business who are actively involved in using the system to support
their day-to-day work. This could be a buyer in procurement, a
production line manager in a factory or an accountant in the
finance department.
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Slide 08.22
Types of system users
• Legitimizers who support the need for the system and
are respected since they are experienced in their job,
regarded as the experts by fellow workers or simply
popular.
• Opinion leaders whom others watch to see whether
they accept new ideas and changes. They usually
have little formal power, but are often (but not always)
regarded as good ideas people who are receptive to
change. If such people are critical of the system then
this can spread resistance to change.
• Followers.
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Slide 08.23
Leadership qualities
The need for senior management involvement is a
common theme in discussion of success factors for
change management. For example, Schein (1992)
concluded that three variables are critical to the
success of any large-scale organizational change:
1. The degree to which the leaders can break from
previous ways of working.
2. The significance and comprehensiveness of the
change.
3. The extent to which the head of the organization is
actively involved in the change process.
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Slide 08.24
Kotter on leadership
• Articulating the vision in ways that are
understandable by the people affected by change (he
says this is often ‘undercommunicated by a factor of
10 (or 100 or even 1,000)’);
• Involving people in deciding how to achieve the
management vision, thereby giving them some sense
of control;
• Supporting people to achieve the vision by being a
role model and providing coaching and feedback;
• Providing focus by identifying short-term wins;
• Recognising and rewarding success.
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Slide 08.25
E-commerce change approaches
•
•
•
•
Cope and Waddell (2001) have assessed the role of
leadership style in e-commerce implementations. They
assessed the most common approaches to e-commerce
implementation, distinguishing between these
approaches:
Collaborative – widespread participation of employees
occurs to define the changes required and techniques to
achieve them.
Consultative – management takes the final decision, after
calling on some employees for input.
Directive – The management team takes the decisions
with the employees generally trusting them to do so and
generally informed.
Coercive – the management team takes the decision with
very limited recourse to employees.
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Slide 08.26
Kotter’s 8 success factors for change
1. Establish a sense of urgency.
2. Form a powerful coalition (a change team).
3. Create a vision which is imaginable, desirable,
feasible, focused, flexible, communicable.
4. Communicate the vision.
5. Empower others to act on the vision.
6. Plan for and create short term wins.
7. Consolidate the change and produce more change.
8. Institutionalize new approaches by demonstrating the
benefits.
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Slide 08.27
Leadership in action – Jack Welch of GE, c2001
• ‘Last year I told you I believed e-Business was
neither "old economy" nor "new economy," but simply
new technology. I’m more sure of that today. If we
needed confirmation that this technology was made
for us, we got it. GE was named last year "eBusiness of the Year" by InternetWeek magazine and
awarded the same title last week by WORTH
magazine.’
• ‘Digitization is, in fact, a game changer for GE. And,
with competition cutting back because of the
economy, this is the time for GE to widen the digital
gap, to further improve our competitive position. We
will do that by increasing our spending on information
technology by 10% to 15% this year despite the weak
economy.’ Chaffey and Wood Business Information Management © Pearson Education Limited 2005
Slide 08.28
Kotter and Schlesinger 6 methods of
participation and involvement
The six methods are:
1. Education and persuasion.
2. Participation and involvement.
3. Facilitation and support.
4. Negotiation and agreement.
5. Manipulation and co-option.
6. Direction and a reliance on explicit and
implicit coercion.
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Slide 08.29
Characteristics of communications
for managing change
Hayes recommends that four characteristics of communication
should be reviewed as part of employee motivation:
1. Directionality. We have already suggested that it is important that
communication is a two-way process. Furthermore, there is a danger in
large organizations, where information is filtered when it is passed from
top to bottom, or bottom to top that the final recipients may not receive all
the information they need.
2. Role. We saw in a previous section that some types of employee such as
legitimisers and opinion leaders have a great capacity to influence. It is
important that they are identified and involved actively at all stages of the
change process.
3. Content. The information itself transmitted in communication, is of course,
key to effective communication. Sufficient detail must be contained with
communications to justify change, but at the same time, the message
should be kept straightforward and clear.
4. Channel. Information on change can be delivered verbally, via paper
memos, e-mail, phone or even mobile text messages. Choosing the
appropriate range of channels is key here.
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Slide 08.30
Summary of employee motivation techniques
• A range of techniques can be deployed and these must
carefully balance the need for the ‘carrot and the stick’.
• The literature stresses the need for two-way
communication and dialogue using a range of different
communication channels.
• Staff motivation is dependent on organization culture
and existing job characteristics. It may be difficult to
modify these underlying drivers of employee
satisfaction during an individual change project.
• For information management projects it is important
that education is not limited to training how to use the
new systems, but also explaining the reasons for their
introduction and the implications for the individual and
their teams. Chaffey and Wood Business Information Management © Pearson Education Limited 2005
Slide 08.31
Corporate information portals – what are they?
Corporate information portal
organizational information resources are made accessible via an
intranet using structured and non-structured approaches
Benefits:
1. Improved information sharing
2. Enhanced communications and information sharing
(communications)
3. Increased consistency of information
4. Increased accuracy of information
5. Reduced or eliminated processing
6. Easier organizational publishing
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Slide 08.32
Approaches to managing change
1. ‘Cover all your bases’. This refers to using a cross-discipline
project team
2. Avoid generalisation. Content should be themed for particular
types of employees, not an average employee. It is recommended
that the system has a phased implementation for one ‘community’
at a time such as finance, sales or HR.
3. Keep current. McFarland (2001) says: ‘Intranets buckle under the
burden of useless, outdated information’. She recommends using
software that uses automatic content expiration dates that
automatically remove content when it is no longer applicable.
Another approach is to make individuals responsible for particular
types of content.
4. Measurement. Review web analytics and conduct surveys with
employees.
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Slide 08.33
A corporate portal used in the Nasa
Jet Propulsion Laboratory
Figure 8.3 A corporate portal used in the Nasa Jet Propulsion Laboratory
Source: Nasa Jet Propulsion Laboratory Management Team (http://km.nasa.gov)
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Slide 08.34
Sell-side e-commerce – what is it?
• We saw in Chapter 2, that sell-side e-commerce
refers to e-commerce transactions between a
supplier organization and its customers who may be
other businesses (B2B) or consumers (B2C). We saw
that these transactions may be financial i.e. when a
sale occurs, but they may also be informational such
as information requests or support enquiries.
Sell-side e-commerce
E-commerce transactions between a supplier
organization and its customers possibly through
intermediaries
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Slide 08.35
Sell-side e-commerce benefits
Tangible benefits
Intangible benefits
 Increased sales from new sales
leads giving rise to increased
revenue from:
– new customers, new markets
– existing customers (repeatselling)
– existing customers (crossselling)
 Marketing cost reductions from:
– reduced time in customer
service
– online sales
– reduced printing and
distribution costs of marketing
communications
 Adding value to products through supporting
information, applications and customer service
 Corporate image communication
 Enhance brand
 More rapid, more responsive marketing
communications including PR
 Faster product development lifecycle enabling
faster response to market needs
 Learning for the future
 Meeting customer expectations to have a web site
 Identify new channel partners, support existing
partners better
 Better management of marketing information and
customer information
 Feedback from customers on products
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Slide 08.36
Sell-side e-commerce change issues
• The problems of change management for sell-side e-commerce
are similar to those of corporate portals and intranets, but this
time, it is an external audience that must be influenced to
encourage a change in behaviour from previous ways of working
to new ways of working. There is a similar problem of encouraging
continued usage and participation in the use of online information
resources and applications.
• When sell-side e-commerce systems are introduced into a
company there are also problems of conflict with other parties who
also communicate with customers. For instance, sales
representatives and distributors may feel their role is being
usurped. Customer-service staff in contact centres also have to be
trained to manage enquiries from customers from a range of
channels. However, in this coverage we concentrate on influencing
the customers, which is a different type of change management to
the employee related change management issues covered by
other examples in this chapter.
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Slide 08.37
Approaches to managing change
• Research barriers to change and facilitators of
change
• Define effective online value proposition
• Communicate proposition
• Accommodate channel resistance
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Slide 08.38
Survey results for browsing and purchasing from
the Internet in Europe
Figure 8.4 Survey results for browsing and purchasing from the Internet in Europe
Source: European Interactive Advertising Association (2004)
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Slide 08.39
Barriers to development of online technologies
Figure 8.5 Barriers to development of online technologies
Source: DTI (2002)
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Slide 08.40
RS Components transactional web site
Figure 8.6 RS Components transactional web site
Source: www.rswww.com
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Slide 08.41
CRM – What is it?
• Customer relationship management (CRM)
systems were introduced in Chapter 2. Customer
relationship management systems are used to
support the marketing and delivery of services to
customers.
• In the context of The Lo-cost Airline Company, a
CRM system would include tools for helping
customers select the best flight, purchasing tickets,
answering pre-flight queries and support in any postflight queries such as problems with baggage. A CRM
system may also be used for marketing relevant,
personalised offers direct to customers through direct
mail (post) or e-mail.
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Slide 08.42
Main components of a typical CRM System
Figure 8.7 Main components of a typical CRM System
Source: Siebel (2002)
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Slide 08.43
CRM capabilities and benefits
•
•
•
•
Effective customer segmentation – organizations can market to, sell-to
and serve customers more effectively by targeting their unique needs
and preferences and understanding their relative value. Customers are
grouped according to their needs and value and different offerings
delivered to each. CRM also enables marketing communications to be
tailored on an individual level according to past products purchased, for
examples.
Integrated multi-channel strategy – Customers require services to be
delivered over a range of channels such as phone, web, e-mail, face-toface or by mail. These channels all need to deliver the same experience
to the customer and from the company’s perspective support each other
in achieving sales and customer satisfaction.
Well-defined integrated customer-focused business processes.
The right technology and in particular a consistent, up-to-date picture of
all information and contacts related to a customer (characteristics and
sales, service, campaign contacts) sometimes referred to as a single
view of the customer.
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Slide 08.44
Typical CRM benefits
• 8% increase in revenue (through better targeting of customers in
marketing campaigns giving a greater response, selling more
products to existing customers (up-selling and cross-selling) and
reducing customer attrition).
• 18% increase in employee productivity (customer contacts can
be handled more rapidly since information is rapidly provided and
processes partly automated).
• 18% increase in customer satisfaction (this again arises since
information is more readily to hand and fulfillment should be
improved i.e. the customer is more likely to receive the product or
service they ordered on-time). Increasing customer satisfaction
has been shown to reduce attrition/increase customer retention.
• 13% increase in customer retention (arising from increased
satisfaction and better targeted communications).
• 13% decrease in operating costs (resulting from fewer staff
needed to serve customers/manage processes and better
targeted communications with less wastage).
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Slide 08.45
CRM change management issues
Butler Group found 70 percent of CRM implementations fail.
A Gartner study found that 55 percent of all CRM projects failed to
meet customers' expectations.
A 2001 Bain & Company survey of 451 senior executives, found
that CRM ranked in the bottom three categories among 25 popular
software tools evaluated for customer satisfaction.
However, ZDNet (2002) reports on another survey (not by a wellknown IT analyst) that showed that ‘only 35 percent of CRM
implementations, when considered over their entire life, can be
considered failures’. It reported that in contrast, 45 percent of
CRM implementations were producing a payback.
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Slide 08.46
CRM - 6 levers of change
1. Compensation and rewards.
2. Boss’s behaviour.
3. Policies and processes.
4. Training.
5. Communication.
6. Organizational structure.
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Slide 08.47
BI – What is it?
• Business intelligence (BI) refers to a category of software or
approach to information management used by managers to
understand and improve the performance of their processes.
• At its simplest, Business Intelligence software is a modern term for
business reporting software. This software counters information
overload to deliver relevant, timely information to managers’
desktops and into their hands.
• At its most complex, it offers sophisticated analysis tools for
identifying patterns and relationships within data – an approach
known as data mining. Such information tools have been
previously known as decision support systems (DSS).
Business intelligence
Software used to analyse and improve business processes
through the provision of analysis and reporting capabilities
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Slide 08.48
Data mining – what is it?
Data mining
Software is used to identify relationships within data items in a database
Data mining is commonly used within marketing applications, marketingrelated examples of data mining techniques include:
•
•
•
•
•
Identifying associations – a shopping basket analysis by a chemist
revealed an association of shoppers who purchase condoms and foot
powder. It is not clear how this information can be used!
Identifying sequences – shows the sequence in which actions taken by
customers occur e.g. path or clickstream analysis of a web site.
Classifications – patterns e.g. identifying groups of web site users who
display similar visitor patterns.
Clustering – finding groups of facts that were previously unknown.
Customers who purchase a particular product can be grouped according
to their characteristics. Potential customers who share these
characteristics can then be identified.
Forecasting – using sales histories to forecast future sales.
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Slide 08.49
Data warehouses – what are they
William Inmon is often known as the father of the data warehouse, he defines a data
warehouse as:
A subject oriented, integrated, time variant, and non-volatile collection of data in
support of management’s decision making process.
It is worth considering each of the characteristics of the definition in more detail:
• ‘subject oriented’. Examples of subjects that are commonly held in data
warehouses for analysis are customer and product.
• ‘integrated’. An important principle of data warehouses is that information is
collected from diverse sources within an organization and brought together to
enable integrated analysis.
• ‘non-volatile’. Data is transferred from operational information systems such as
sales order processing systems into a data warehouse where the information is
static – it is not updated. This is to prevent degradation of the performance of the
operational systems.
• ‘in support of management’s decision making process’. This final point
emphasises the purpose of the data warehouse.
•
Data warehouses
Large database systems containing detailed company data on sales transactions
which are analysed to assist in improving the marketing and financial performance
of companies.
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Slide 08.50
Architecture of a data warehouse
Figure 8.8 Architecture of a data warehouse
Source: Bocij et al. (2003)
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Slide 08.51
Business Objects Performance dashboard
Figure 8.9 Business Objects Performance dashboard
Source: Business Objects
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Slide 08.52
Problems of change management
• Case study 8.3 ‘Fighting the flood of data’ gives an
indication of the benefits and problems of introducing
business intelligence systems.
• Some of the problems referred to in the case include
using different BI tools in different areas of the
business; using tools for data mining in ways that
don’t support the business; lack of focused objectives
and insufficient data cleansing (Chapter 10). These
data warehouse projects which were common in the
mid 1990s reported similar failure rates to CRM
projects.
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Slide 08.53
Problems in managing data warehouses
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A 1998 report, by the Meta group identified these (still
common) failings :
35–40%: Data quality;
30–35%: Transforming/scrubbing legacy data,
managing end-user expectations;
20–25%: Managing management expectations,
business rule analysis, managing meta-data (data
about data);
15–20%: Database performance tuning/scaling, ROI
justification;
10–15%: Time to load/refresh data;
5–10%: Security, maintenance.
Chaffey and Wood Business Information Management © Pearson Education Limited 2005
Slide 08.54
10 success factors
1. Information relevance.
2. Ease of access.
3. Data standards.
4. Dedicated resource.
5. Adequate performance.
6. Corporate sponsorship.
7. Operationally stable.
8. Agreed infrastructure.
9. New user culture.
10. Source data.
Chaffey and Wood Business Information Management © Pearson Education Limited 2005