Business of Data Warehousing Foundations Essay

administrator SummarymySupermarket is a grocery give awayping and comparison web order which aims to provide customers with the opera hat impairment for their shop. This accoun stop buoyg examines how selective info storehouse provided mySupermarket with the foundation in which to sort a successful enterprise, and allowed a subsequent expansion into the occupation comprehension sector. The re anticipate draws attention to the problems and limitations that mySupermarket encountered including coping with diverse sources of entropy menstruums, customer trueness issues, achieving real- snip selective selective information, entropy unity and generating a sustain competent revenue stream. These problems were tackled individually with public figureing their own info w behouse, adopting a CRM scheme underpinned by their w behouse, adopting Microsofts SQL softw ar, supermarket web place crawling, offering targeted advertising space and the realisation that the tweedi ness of detail they offered, would allow them to expand into the military control intelligence sector.The report appreciates the immenseness of storing entropy, but concludes that information itself is the prerequisite to success, and that wakeless management is needed to switch over this data into meaningful information. It is hence a combination of data wareho hold and good management that has en fittingd mySupermarket to become a successful venture.IntroductionOn the 31st August 2006, entrepreneur Johnny Stern received a seven-figure sum from investors to transform the way consumers shop for their groceries. From this, the damage comparison site mySupermarket.co.uk was born and the corporation has utilised data warehousing to give consumers get to to cheaper grocery shopping. The venture has non been without its problems, however quaternity-spot years on the company has withstood Adam Smiths Invisible Hand1 and big into a c.10m companymySupermarket is a grocery sho pping and comparison site that allows customers to compare and shop from four main UK supermarkets in angiotensin converting enzyme primeval place. Their mission statement is to get the scoop possible price for your supermarket trolley car while enjoying an easier and much consumer-friendly shopping experience. Through the use of SQL and data warehousing, mySupermarket is able to collect product pricing, promotion and availability data right away from retailers websites. It then uses its proprietary technology to match identical Stock retention Units (SKUs) across retailers. After initial investment from Greylock Partners and Pitango Venture Capital (investors in Facebook & ampere LinkedIn), mySupermarket have faced the same difficulties as a nonher(prenominal) price comparison sites in generating a sustainable revenue stream later on Stern declared that the portal would remain free in principle for shoppers.The customer proposition for mySupermarket is to number 1 log in to their account. Then choose which supermarket to shop at from Asda, Ocado/Waitrose, Sainsbury or Tesco. Tick their preferred supermarket and choose a deli very(prenominal) time/date, then start to shop. mySupermarket is updated on a daily hindquarters so that the prices shown are the most competitive. Once the customer has make their election of store, they start to shop by using the tabbed excerptions along the top of the page. These are divided up into virtual aisles so making a choice from Fruit and Veg, Meat, Fish & Poul look for, or Drinks etc. Once shopping has been completed, it then shows basket prices across the four supermarkets and allows the customer an opportunity to switch supermarkets.This report will critically discuss how data warehousing has enabled mySupermarket to build a successful business model including the benefits and problems that have arisen from the use of this technology. The report will finally analyse the extent to which data warehousing has contributed to mySupermarkets success.Technologies DiscussedAccording to Bill Inmon2 (1993) data warehousing crapper be delineate as, a subject-orientated, integrated, time variant and non-volatile, collection of data in run on of the management decision making process. It is, in essence, a plumping data storage facility which enables an enterprise to gain a competitive advantage by means of analytics and business intelligence. Providing integrated access to multiple, distributed, heterogeneous databases and other information sources has become one of the leading issues in database research and industry, IEEE computer (1991) which can be seen through with(predicate) the success of head start American potbelly (FAC), Cooper et al (2000) and Tesco/Dunnhumby, J. Perry (2009).Data mining is the process of digging-out patterns from data, usually through Clustering, Classification, Regression and Association rule learning. Data mining technology can generate parvenu business opportunities by providing alter prediction of trends and behaviours. Automated discovery of previously unknown or hidden patterns D. Champion and C. Coombs (2010)This process is carried out by sophisticated software packages such as Oracle, IBM and SQL. This alleviates the (potentially) very time consuming task of manually inputting and analysing the dataWithin data warehousing, there is a towering importance placed on the persona of data, as without it, meaningful analysis is impossible. Data collection should therefore be taken with a high level of detail, and have solid definitions, as to avoid subjectivity.The purpose of a data warehouse is to support productive strategic decision making through a greater grossness of information with a consistent view of whats happening.Customer kind Management (CRM) emerged in the 1990s at a time when customers were proper better informed and less brand loyal. CRM is an desegregation of technologies and business processes use to sa tisfy the needs of a customer during any interaction, Bose (2002, p. 89) and is underpinned by data warehousing. As with VISION in the FAC case (2000), the subsequent benefits of CRM, is that firms are able to exploit the 8020 principle which states that some customers are more important/profitable than others. These information sources can only come through data warehousing and data mining.mySupermarket The BeginningThe inspiration for mySupermarket came from Sterns bargain-obsessed elderly relative who would scour the aisles of Tescos to find his favourite tin of baked beans, jot down the price and travel to competitor stores to try and find a better deal. Stern identified the festering concern in online grocery shopping and felt that it was an area that could be use (Fig. 1). assure 1 Mintel Intelligence Online Grocery DataStern spend 18 months before the launch developing the software and tweaking the concept (Fig. 2).Figure 2 Adaption of Martin et al., 2005 193The dat a warehouse was developed through crawling3 the four supermarket websites and tot uping product pricing, promotion and availability data to the warehouse. Once this data was implement in the warehouse, proprietary technology and SQL software allowed mySupermarket to match identical SKUs across retailers. This data was also utilize in developing its CRM strategy through the use of cookies4 to store data in the customers computer using the functionality of their browser to find out whether the computer has visited the site before and what SKUs they purchased. This enables us to give way an efficient help and to track the patterns of behaviour of visitors to the website. mysupermarket.co.uk. The feature enables mySupermarket to utilize this information by creating functions such as a Regular take a crap button, saving customers time on their shopping.mySupermarket ProblemsMany problems can arise through the use of data warehousing, both technically and commercially. According t o Mintel Intelligence (2009), Consumer trueness is fairly low in the price comparison market with more than 14 one thousand thousand tidy sum (c.58% of market) having used three or more different price comparison sites. Underlying these efforts was the recognition that, to succeed with this strategy, it must know its customers exceptionally well and leverage that knowledge in website design, proceeds and interaction with their clients. mySupermarket would therefore have to find a strategy to retain a loyal customer base in a nonoriously disloyal sector.Kimball & Ross (2002) state that a common pitfall of data warehousing is to simulate that the business, its ingestments, analytics, underlying data and supporting technology are static an premature problem mySupermarket encountered was the variation in regional pricing and a growing demand for real-time data.A nonher problem with data warehousing is ensuring the integrity of data, this is typically a adult male procedure and so subject to human error. Even the most sophisticated data mining systems cannot produce good analysis from poor data. A good illustration of this is from Blastard and Dilnot The Tiger That Isnt where a hospital survey found that an alarming amount of perseverings were organism born on the 11th noneember 1911. Further investigation showed that nurses often would not fill in patient files properly and to save time, when asked to enter patient D.O.B. they would type 11/11/11 into the database. No matter how ingenious a computer system is, if you put garbage-in you will get garbage-out.Beynon-Davies (2004) states that data warehousing projects are large scale development projects typically pickings up to three years to complete. Some of the challenges of such problems may allow selecting, installing and integrating the different hardware and software and also, the diverse sources of data feeding a data warehouse introduces problems of design in damage of creating a homogenous data store.Finally, as with all comparison sites, the major(ip) obstacle facing mySupermarket was generating a sustainable revenue stream from the database they had accumulated. mySupermarket.co.uk did not generate any revenue 5 months after the website went live. Originally, mySupermarket didnt operate a search advertisement scheme (a central platform for companies such as Google eg, BP knuckle undering for advertising of their oil spill cleanup when people typed in BP Oil Spill G. Cheeseman, 2010) . There are also no revenue-sharing agreements in place with the four stores whose prices it monitors in effort to remain independent. This, in part, may stem from mySupermarkets limited market, consisting of a comparison of groceries. mySupermarket accepted that they would have to expand their focus if they were to generate a large decent turnover to operate a successful business.mySupermarket Technological concernThe offset printing problem mySupermarket addressed was the i ndustries poor customer loyalty. They decided to ravish this through the implementation of a CRM strategy. After the initial launch, mySupermarket was receiving feedback from customers regarding such things as healthy options, promotions on offer, printable shopping propensitys and regular shops. mySupermarket realised that the information stored in their data warehouse could be exploited to meet these demands and append customer utility. Subsequently, a Health Checker feature was launched establish on the Food Standard Authoritys approved traffic agility system. In November 2008, the mySupermarket Quick Shop function was added, allowing users to type their shopping list on a virtual notepad and find their required items in one go.As delivery slots started running out towards Christmas we also introduced a new print your shopping list feature, which was popular, said Stern. A lot of our shoppers are using the website as a quick way to find the best deals and are then going to th e supermarket to make their purchases. Recent analysis of visits shows mysupermarket.co.uk has a loyal repeat following, with Stern claiming visitors are spending an average of 20 minutes on the site.Until recently, there were few viable tools to provide real-time data warehousing nor an absolutely current picture of an organizations business and customer J. Vandermay (2001). To combat the problem of achieving real-time and regional data, mySupermarket used Microsofts SQL software5. Most data integration solutions focus on woful data only between homogeneous systems and database software. However, SQL integration is capable of touching data among a wide range of databases and systems. It also offers transformational data integration tools to consolidate and synchronize heterogeneous data into a warehouse. This allows consumers to view whether a certain item is in stock in their local store, or view delivery slots for their specific region. This real-time data saves the mySuper market team having to continually update the warehouse manually.Fortunately for mySupermarket, their website crawling technique allows them to take the SKU data directly from the supermarkets themselves. Therefore data will only be wrong, if the supermarket has made the mistake (so would have to sell the item at that price) and so mySupermarket would not be liable.Although Stern took half the time recommended by Beynon-Davies, the warehouse has had to be continuously tweaked since its launch. After its launch mySupermarket noticed a data stream that wasnt universe filtered into the data warehouse calories. After the realisation, mySupermarket were able to add a calorie counter function on to the website.For any business to survive, it needs to generate a revenue stream to achieve a sustainable cash flowmySupermarket were able to negotiate with supermarkets a guardianship of 5 for each first-time buyer that shops through their site and 1 every time thereafter. Other sources of re venue came from the use of advertising, which could be split into deuce different segments on-site and search-related advertising. Marks & Spencer (Fig. 3) are one company that has chosen to advertise with mySupermarket.co.uk as the content is relevant and it is independent from the four supermarkets creation compared. Advertisers will typically pay $1.00 $1.50 per 1,000 run-of-site impressions for the advertising placement. However, advertisers may pay even more for targeted sidebar advertisements. Search advertisements are targeted to match expose search terms entered on the search engine, these products (advertisements) will then appear first in the search. Danone (Fig. 3) has paid for advertisement when the search term yoghurt is entered, and so their umbrella brands (eg, Activia) show at the top of the list, increasing its probability of being bought.Figure 3 mySupermarket.co.uk advertising exampleDue to the amount of data mining available to mySupermarket, an opport unity was identified for expansion, called mySupermarket insights. It acts as real-time B2B data service for the Fast Moving Consumer Goods (FMCG) sector. As mySupermarket has access to SKU by SKU trends, it is able to offer extremely high level, intelligent data. The services it offers include upstart Product Development (NPD) alert reports, Online auditing reports, Price comparison reports, Product exchange report and Customer profiling reports (allowing for further use of CRM through crew analysis6). This sort of information is of high value to companies and a subscription to the service can range from 5,000 20,000p.a. (current clients include Kelloggs, Innocent Smoothies, Nielson and Ellas Kitchen).Finally, mySupermarket is often undertake by media companies, such as the Independent to analyse trends for news stories J. Burchill (2010).I feel that information is now widely recognised as being one of the key corporate resources, needing to be carefully managed so that it ca n be effectively utilised in the decision-making process. Timely, accurate and relevant information can only be generated, however, if corporate data is stored in a secure, accessible and flexible manner.The following table provides a summary of the trespass that data warehousing technology had for mySupermarketFigure 6 Technological Impact SummarymySupermarket ConclusionTo conclude, data warehousing has enabled mySupermarket to overcome issues such as customer retention, real-time data and generating revenue. It really does appear that information is key, whereby data is the prerequisite for information. J. Poole et al. (2003) state the underlying economic moreoverification is in conclusion based on the value a given technology provides to the customers of the cipher systems and software products and so the determinate of mySupermarkets success is essentially based on whether people use the technology and the value of the company. ground on an monthly unique user level o f 1 million, and 500k registered users turn of events over c.10m, we can assume that at this point in time mySupermarket is justified economically.On the other hand, you could argue that mySupermarket is a recession business and not a sustainable enterprise. In which case, the rapid growth in recent years could be due to the economic climate and not because there is a long term demand.Looking towards the future, Our investors have internationalist ambitions, Stern said. They see the potential of transporting the model to different markets. mySupermarket are feel to expand the companys development team to support its opening into Europe and the US. mySupermarket are currently looking for another round of accompaniment to bridge G. Murrays (1994) second equity gap. Technology firms often require follow on development funding, as cash is firmly plowed into Prototype testing and Research & Development. In terms of an exit, mySupermarket would be very attractive to major FMCG co mpanies such as P&G, Unilever and Krafts venture arms. I conceptualize that mySupermarket will achieve their second round funding as they are now profitable and have a proven concept that has high growth prospects for the future.Over the past few years there has been a huge growth in the use of numbers and analytics. Businesses are recognising that it is not enough to work harder than the competition they also have to work smarter. Davenport (2006) argues that it is about impossible to differentiate yourself from competitors based on products alone and so to retract ahead of the pack, businesses need to compete on analytics. In which case, mySupermarket insights is poised in a perfect position to capitalize on this new disposition for business intelligence, whereby companies feel that they will have to subscribe to the service to compete on an even playing field.However, it is not enough to just store data, it has to be managed, analyzed, implemented and utilised to conve rt raw data into real information. mySupermarket realised the benefits of data warehousing and were able to exploit this, expanding from a mere price-comparison site to a business intelligence provider to major FMCG companies. I believe that with the current shift towards analytics and business intelligence, mySupermarket has the potential to be a major force in the FMCG sector whilst offering a greater transparency for customers, all of which stems from good management and data warehousing.ReferencesBeyon-Davies, P (2004) Database Systems, 3rd edition, Palgrave, Basingstoke, pp. 527-538 and 547-553Bose, R (2002) Customer Relationship Management Key concepts for IT success, Vol. 102, No. 2, pp. 89-97Blastland, M & Dilnot, A (2007) The Tiger That Isnt Seeing a World Through NumbersBurchill, J (Aug 2010) The Independent So the Prince of immature Hypocrites is going on tour. Thank God Ill be abroadCooper et al. (2000) Data Warehousing Supports Corporate Strategy at First Amer ican Corporation Vol. 24, No. 4Champion, D & Coombs, C (2010) Handout BSC070 Enterprise Information SystemsCheeseman, G (June 2010) Triple Pundit Is It respectable For BP To Buy Oil-Spill-Related Google Search Terms?Davenport, T. 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