Operational Intelligence Allows Real-Time Reaction To Biz Exceptions

Majority of business decision makers today are pressured to make critical business decisions without timely access to high-quality, reliable, personalised information on operational and financial performance.

Operational managers and executives demand visibility into the status of their business process as they relate to the business key performance indicators (KPIs) in real time. To stay competitive and provide better service operations, managers need ways to analyse emanating application events so they can compute thresholds that affect the business KPIs and act within context.

Take for instance organisations that run distributed global supply chains with Just-in-Time inventory practices. They must constantly monitor their inventory levels and correlate them to the bill of materials and replenishment requests they sent to their suppliers and logistics partners. They must do this so they have a balanced flow of parts and inventory throughout their entire supply chain.

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Similarly, telecommunications companies that provision new services and new customers must continually monitor their processes that touch hundreds of operational systems to make sure they have an up-to-the minute view of the status of outstanding customer service requests.

Business Intelligence (BI) tools can help solve these operational analytics and real-time visibility challenges that organisations face.

Intelligent Business in Real-Time

BI refers to how IT technologies can leverage data into meaningful information that provides richer insights into how a business is doing today, as well as a sense of where it may be going tomorrow. BI solutions help analyse large amounts of historical data, identify patterns, and understand trends that might affect the business.

Analysing sales and operations, understanding customer behaviour, and identifying opportunities for revenue increases and cost savings are some of the areas where BI solutions can give business users interesting insights. In the past, BI could only be done after enormous amount of data had been collected, but today’s much improved IT infrastructure allows Business Activity Monitoring (BAM) to be done on-the-fly.

BAM is a real-time, event-driven extension of BI. The extension is subtle but powerful. BI solutions have the reputation of working only with historical data gathered from data warehouses, and being inflexible to change. BAM technologies, on the other hand, can provide real-time business analytics on information emanating from transactional data sources including Web services, message queues etc.

For example, BAM lets users correlate heterogeneous events and patterns for causalities, aggregates, and thresholds based on end-user-defined preferences and models. It can deliver the analysed information and alerts in real-time to business users when and where the information matters. It also provides a platform that enables a structured and collaborative problem-resolution process that ultimately helps optimise business processes.

Staying ahead of the competition requires the ability to predict and respond to trends in real time, rather than react to isolated events that have already happened. The fusion of the expertise offered by both BAM and BI technologies enables operational intelligence — in short, the ability of a business to react to an event or process exception in real-time.

The ideal use cases for operations intelligence — those that are interested in proactively catching business exceptions before or right after they occur — can’t rely solely on traditional BI systems that run only on a scheduled basis and not when exceptions occur. In some cases, it’s important to capture non-events and their impact on businesses.

For example, in a call centre business, if a valued customer’s call with an operator exceeds a threshold resolution time, a floor manager might be advised via a proactive alert to intervene and resolve the situation. Here, the call-ending event has not occurred and timely knowledge of this fact can be valuable to the business.

BAM can also use historic analysed facts from a BI system as its measuring instruments to derive the described thresholds to the data it analyses. BAM systems can integrate with data mining and Online Analytical Processing (OLAP) tools to provide monitoring capabilities on top of the analysed information to facilitate closed-loop analytics.

Consider a supply-chain visibility and logistics example: A retail clothing business wants to enhance its operations intelligence infrastructure. Information analysed by BI creates data for year-over-year consumer salary comparisons, market-basket analysis, and forecasts. This information can be passed as measuring facts to a BAM system.

If the analysed facts suggest that over the last six quarters, the average buying capacity of an area has dropped, BAM could trigger an action that intercepts a new order for purchasing certain luxury items in the order fulfillment system if the quantity is the same as previously purchased. Or, if BI-analysed facts show that a particular item has disproportionate sales in two outlets over a period of time, BAM could issue a request to transfer more of those goods to one of the outlets.

In summary, BAM and BI together provide operational managers a versatile real-time monitoring and analytics toolset that can help them better analyse emanating operational information. These tools let an operational user work through large volumes of historic data to find the hidden truths through visualisations such as dashboards, and provide structured information patterns for KPIs, threshold violations, and event correlations with an emphasis on real-time alerting.

_Varghese is general manager, Enterprise Performance Management and Business Intelligence, Oracle India.
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