Information Technology Reference
In-Depth Information
Application
Description
Branding and positioning
of products and
services
Enable the strategist to visualize the different positions of competitors in a given market using
performance (or other) data on dozens of key features of the product and then to condense all that
data into a perceptual map of only two or three dimensions.
Customer churn
Predict current customers who are likely to switch to a competitor.
Direct marketing
Identify prospects most likely to respond to a direct marketing campaign (such as a direct mailing).
Fraud detection
Highlight transactions most likely to be deceptive or illegal.
Market basket analysis
Identify products and services that are most commonly purchased at the same time (e.g., nail polish
and lipstick).
Market segmentation
Group customers based on who they are or on what they prefer.
Trend analysis
Analyze how key variables (e.g., sales, spending, promotions) vary over time.
Table 5.8
Business Intelligence
The use of databases for business-intelligence purposes is closely linked to the concept of
data mining.
Business intelligence (BI)
involves gathering enough of the right information
in a timely manner and usable form and analyzing it so that it can have a positive effect on
business strategy, tactics, or operations. IMS Health, for example, provides a BI system de-
signed to assist businesses in the pharmaceutical industry with custom marketing to physi-
cians, pharmacists, nurses, consumers, government agencies, and nonprofit healthcare
tributed throughout an enterprise. It provides insight into the causes of problems, and when
implemented can improve business operations and sometimes even save lives. For example,
BI software at the Sahlgrenska University Hospital in Gothenburg, Sweden, has helped neu-
rosurgeons save lives by identifying complications in patient conditions after cranial
the utilities industry.
Competitive intelligence
is one aspect of business intelligence and is limited to infor-
mation about competitors and the ways that knowledge affects strategy, tactics, and opera-
tions. Competitive intelligence is a critical part of a company's ability to see and respond
quickly and appropriately to the changing marketplace. Competitive intelligence is not
espionage—the use of illegal means to gather information. In fact, almost all the information
a competitive-intelligence professional needs can be collected by examining published in-
formation sources, conducting interviews, and using other legal, ethical methods. Using a
variety of analytical tools, a skilled competitive-intelligence professional can by deduction fill
the gaps in information already gathered.
The term
counterintelligence
describes the steps an organization takes to protect infor-
mation sought by “hostile” intelligence gatherers. One of the most effective counterintelli-
gence measures is to define “trade secret” information relevant to the company and control
its dissemination.
Common Data-Mining
Applications
business intelligence
The process of gathering enough of
the right information in a timely
manner and usable form and ana-
lyzing it to have a positive impact
on business strategy, tactics, or
operations.
competitive intelligence
One aspect of business intelligence
limited to information about com-
petitors and the ways that knowl-
edge affects strategy, tactics, and
operations.
counterintelligence
The steps an organization takes to
protect information sought by “hos-
tile” intelligence gatherers.
