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Business Analytics & Optimization: BI på superoktan
Ivar JuulPartner, IBM GBS, Nordic BAO Leader
© 2010 IBM Corporation
Agenda
� What is BAO
� Having data simply is not enough
� Advanced Analytics have many forms– Checkout Analytics Surveillance Engine– Fraud and Abuse Management System
� Develop a business case for Advanced Analytics
� What problems are our customers facing
� Consolidation of the data warehousing platform
© 2010 IBM Corporation
How IBM’s Business Analytics & Optimization practice helps clients
BAO Strategy
Business Intelligence & Performance Management
Advanced Analytics and Optimization
Enterprise Information
Management
Enterprise Content
Management
• Identify and prioritize opportunities for improvement
• Change business processes and operations to exploit analytics
• Implement management systems to maintain control and achieve goals
• Report outcomes of business processes and programs
• Automate management dashboards and scorecards
• Create planning, budgeting, & forecasting tools
• Apply advanced statistical and regression analysis upon historical data for predictive decision-making
• Integrate optimization algorithms and technology into operations
• Ensure robust and trusted data is available when needed and is easy to consume
• Provide a consolidated and efficient information platform to support optimization initiatives
• Manage document & records, including archives
• Manage structured and unstructured content
• Manage digital assets & rights
• Provide efficiency and transparency to complicated workflows
© 2010 IBM Corporation
When having data simply is not enough:A Post September 11th
Relationship Analysis of the Hijackers
© 2010 IBM CorporationTransforming the Business of Government9
2 Known Terrorists in US
WATCH LIST: CIA/INS/FBI POSSIBLE TERRORISTS IN THE US:
� On or before August 23rd, 2001, Nawaq Alhamzi and Khalid Al-Midhar added to INS watch list
MAKE PLANE RESERVATIONS USING SAME NAMES:
� On or about August 25, 2001, Khalid Al-Midhar purchases cash ticket for American Airlines flight #77 scheduled for September 11, 2001
� On or about August 27, 2001, Nawaq Alhamzi books a flight on American Airlines flight #77 scheduled for September 11, 2001
© 2010 IBM CorporationTransforming the Business of Government10
Two of the Nineteen Terrorists Known
United Airlines Flight 175
Target: World Trade CenterSouth Tower
Marwan Al-ShehhiAhmed Alghamdi Fayez Ahmed Mohand Alshehri Hamza Alghamdi
Hani HanjourSalem Al-HazmiNawaq Alhamzi Majed MoqedKhalid Al-Midhar
American Airlines Flight 77
Target:
Pentagon
Mohamed Atta Satam Al SuqamiAbdulaziz Alomari Waleed AlshehriWail Alshehri
American Airlines Flight 11
Target: World Trade CenterNorth Tower
United Airlines Flight 93
Target: Unknown
Saeed Alghamdi Ahmed AlnamiAhmed Al Haznawi Ziad Jarrah
© 2010 IBM CorporationTransforming the Business of Government11
Address Connections
RESERVATIONS MADE WITH ADDRESS #1 AND ADDRESS #2
� On or about August 25, 2001, Khalid Al-Midhar makes a reservation on American Airlines flight #77 scheduled for September 11, 2001 using Common Address #1
� On or about August 27, 2001, Nawaq Alhamzi books flight on American Airlines flight #77 scheduled for September 11, 2001 using Common Address #2
� ADDRESSES ARE USED BY THREE (3) ADDITIONAL PASSENGERS
� Mohamed Atta has reservation on American Airlines flight #11 scheduled for September 11, 2001 using Common Address #1 as a contact address
� Marwan al-Shehhi has reservation on United Airlines flight #175 scheduled for September 11, 2001 using Common Address #1 as a contact address
� Salem Alhamzi has reservation on American Airlines flight #77 scheduled for September 11, 2001 using Common Address #2 as a contact address
© 2010 IBM CorporationTransforming the Business of Government12
Five of the Nineteen Terrorists Linked
United Airlines Flight 175
Target: World Trade CenterSouth Tower
Marwan Al-ShehhiAhmed Alghamdi Fayez Ahmed Mohand Alshehri Hamza Alghamdi
Hani HanjourSalem Al-HazmiNawaq Alhamzi Majed MoqedKhalid Al-Midhar
American Airlines Flight 77
Target:
Pentagon
Mohamed Atta Satam Al SuqamiAbdulaziz Alomari Waleed AlshehriWail Alshehri
American Airlines Flight 11
Target: World Trade CenterNorth Tower
United Airlines Flight 93
Target: Unknown
Saeed Alghamdi Ahmed AlnamiAhmed Al Haznawi Ziad Jarrah
© 2010 IBM CorporationTransforming the Business of Government13
Phone Number Connections
ONE (1) ALERTED PASSENGER MAKES RESERVATION USING COMMON
TELEPHONE NUMBER
� On or about August 28, 2001, Mohamed Atta uses Florida Telephone #1 as a contact number when making reservations on American Airlines flight #11 scheduled for September 11, 2001
NUMBER IS USED BY FIVE (5) ADDITIONAL PASSENGERS
� On or about August 26, 2001, Waleed Alshehri and Wail Alshehri make reservations on American Airlines flight #77 scheduled for September 11, 2001 using Florida Telephone #1 as a contact number
� On or about August 27, 2001, reservations for electronic, one-way tickets were made for Fayez Ahmedand Mohand Alshehri for United Airlines flight #175 using Florida Telephone #1 as a contact number
� On or about August 28, 2001, Abdulaziz Alomari reserves a seat on American Airlines flight #11 using Florida Telephone #1 as a contact number
© 2010 IBM CorporationTransforming the Business of Government14
Ten of the Nineteen Terrorists Linked
United Airlines Flight 175
Target: World Trade CenterSouth Tower
Marwan Al-ShehhiAhmed Alghamdi Fayez Ahmed Mohand Alshehri Hamza Alghamdi
Hani HanjourSalem Al-HazmiNawaq Alhamzi Majed MoqedKhalid Al-Midhar
American Airlines Flight 77
Target:
Pentagon
Mohamed Atta Satam Al SuqamiAbdulaziz Alomari Waleed AlshehriWail Alshehri
American Airlines Flight 11
Target: World Trade CenterNorth Tower
United Airlines Flight 93
Target: Unknown
Saeed Alghamdi Ahmed AlnamiAhmed Al Haznawi Ziad Jarrah
© 2010 IBM CorporationTransforming the Business of Government15
Frequent Flyer Connections
ONE (1) ALERTED PASSENGER MAKES RESERVATION USING A
FREQUENT FLYER NUMBER
� On or about August 25, 2001, Khalid Al-Midhar makes a reservation on American Airlines flight #77 scheduled for September 11, 2001 using Frequent Flyer #1
FREQUENT FLYER NUMBER IS USED BY ONE (1) ADDITIONAL
PASSENGER
� On or about August 25, 2001, Majed Moqed makes a reservation on American Airlines flight #77 scheduled for September 11, 2001 using Frequent Flyer #1
© 2010 IBM CorporationTransforming the Business of Government16
Eleven of the Nineteen Terrorists Linked
United Airlines Flight 175
Target: World Trade CenterSouth Tower
Marwan Al-ShehhiAhmed Alghamdi Fayez Ahmed Mohand Alshehri Hamza Alghamdi
Hani HanjourSalem Al-HazmiNawaq Alhamzi Majed MoqedKhalid Al-Midhar
American Airlines Flight 77
Target:
Pentagon
Mohamed Atta Satam Al SuqamiAbdulaziz Alomari Waleed AlshehriWail Alshehri
American Airlines Flight 11
Target: World Trade CenterNorth Tower
United Airlines Flight 93
Target: Unknown
Saeed Alghamdi Ahmed AlnamiAhmed Al Haznawi Ziad Jarrah
© 2010 IBM CorporationTransforming the Business of Government17
Remaining ConnectionsPUBLIC RECORDS
� Alerted subjects Nawaq Alhamzi and Khalid Al-Midhar lived with Hani Hanjour
� Alerted subject Wail Ashehri was roommates and shares PO Box with Satan Al Suqami
WATCH LIST: INS ILLEGAL/EXPIRED VISAS
� On or about August 29, 2001, Ahmed Alghamdi reserves an electronic one-way ticket on United Airlines flight #175 scheduled for September 11, 2001
FIVE (5) ADDITIONAL PASSENGERS
� Alerted subject Ahmed Alghamdi and Hamza Alghamdi both use same address on their airline reservations
� Alerted subject Hamza Alghamdi has/does live with Saeed Alghamdi, Ahmed Alhaznawi, and Ahmed Alnami
� Alerted subject Ahmed Alhaznawi has/does live with Ziad Jarrah
© 2010 IBM CorporationTransforming the Business of Government18
All Nineteen Terrorists Linked
United Airlines Flight 175
Target: World Trade CenterSouth Tower
Marwan Al-ShehhiAhmed Alghamdi Fayez Ahmed Mohand Alshehri Hamza Alghamdi
Hani HanjourSalem Al-HazmiNawaq Alhamzi Majed MoqedKhalid Al-Midhar
American Airlines Flight 77
Target:
Pentagon
Mohamed Atta Satam Al SuqamiAbdulaziz Alomari Waleed AlshehriWail Alshehri
American Airlines Flight 11
Target: World Trade CenterNorth Tower
United Airlines Flight 93
Target: Unknown
Saeed Alghamdi Ahmed AlnamiAhmed Al Haznawi Ziad Jarrah
© 2010 IBM CorporationTransforming the Business of Government19
Nawaq AlhamziKhalid Al-Midhar Ahmed Alghamdi
Marwan Al-Shehhi Hani HanjourSalem Al-HazmiMajed Moqed Mohamed Atta Hamza Alghamdi
Fayez Ahmed Mohand Alshehri Abdulaziz AlomariWaleed Alshehri Wail Alshehri Saeed Alghamdi Ahmed AlnamiAhmed Alhaznawi
Satam Al Suqami Ziad Jarrah
Only Three Degrees of Separation Links All Nineteen 9/11 Hijackers
© 2010 IBM Corporation
The world is becoming smaller and flatter,but also needs to be smarter.
© 2010 IBM Corporation
Agenda
� What is BAO
� Having data simply is not enough
� Advanced Analytics have many forms– Checkout Analytics Surveillance Engine– Fraud and Abuse Management System
� Develop a business case for Advanced Analytics
� What problems are our customers facing
� Consolidation of the data warehousing platform
© 2010 IBM Corporation
All Scan Avoidance Transactions Displayed
Video Frame linked to each item
© 2010 IBM Corporation
Checkout Analytics Surveillance Engine
� POS Data, Video, Analytics – Bringing it all together
– Detect scan actions visually
– Match up visuals scans with barcode reads
– Identify visual scans which have no barcode read = “Noscan”
– Insert Noscans into data mining database
� Trial results
– 15 cases of passing
– 10 cases of Void or Over charging error
– 2 operational issues (1 potential staff
discount fraud)
– 3 cashiers with more than 1 type of error
� Simple ROI
– £75 in 3 hours across 10 lanes– £75 * 3 hour loss total store = £225 – Assume 12 hours of operation = £900 per
store per day– 364 day year = £327,600
© 2010 IBM Corporation
Agenda
� What is BAO
� Having data simply is not enough
� Advanced Analytics have many forms– Checkout Analytics Surveillance Engine– Fraud and Abuse Management System
� Develop a business case for Advanced Analytics
� What problems are our customers facing
� Consolidation of the data warehousing platform
© 2010 IBM Corporation
ProviderProvider
ProfilesProfiles
DownstreamDownstream
BusinessBusiness
ProcessesProcesses
Profile Analysis
•Provider Rosters•Profile Values & Scores•Profile & Claims Reports
InvestigatorsInvestigators
FAMS SystemFAMS System
Analysis Results
FAMS Solution
FAMSFAMSProfile ScoringProfile Scoring
Profile AnalystsProfile Analysts
FAMS SystemFAMS System
TransactionTransactionHistoryHistory
Fraud and Abuse Management System
Why Base FAMS?Why Base FAMS?
� Detection of anomalous behavior
� Developed with innovative industry leaders
� Proven technology
� Significant levels of success achieved by clients
� Designed for ease of use for broad range of users
� Powerful Spectrum of Integrated Analytical and Reporting Components
FAMS is a full function retrospective analysis solution
© 2010 IBM Corporation
Agenda
� What is BAO
� Having data simply is not enough
� Advanced Analytics have many forms– Checkout Analytics Surveillance Engine– Fraud and Abuse Management System
� Develop a business case for Advanced Analytics
� What problems are our customers facing
� Consolidation of the data warehousing platform
© 2010 IBM Corporation
Predict Behavior & PreferencesIBM SPSS Modeler for Modeling Future Behavior
� Maximize Analyst Output– Easy to learn, no programming approach to data
mining
� Create Practical Solutions Faster– Automatically create accurate, deployable predictive
models– Choose the best solution with multi- model evaluation
� Open & Efficient Architecture– Data mining within standard databases– Multithreading, clustering and use of embedded
algorithms
Building a business case:• Is there a pattern in the data and is it usable ?
• Before investing in SPSS we can analyse the data for patterns• Develop a business case
• Fast way of getting business insight
© 2010 IBM Corporation
Agenda
� What is BAO
� Having data simply is not enough
� Advanced Analytics have many forms– Checkout Analytics Surveillance Engine– Fraud and Abuse Management System
� Develop a business case for Advanced Analytics
� What problems are our customers facing
� Consolidation of the data warehousing platform
© 2010 IBM Corporation
What pain points do our customers have
� Missing loading predictability� Long response times� Too many errors promoted to production� Funding only for per project, not for architecture� Lack of confidence in realizing benefits from BI
investments� Inconsistent measurement/data definition� No mechanism to correct errors in source
systems� Too many “standard” BI tools � Many uncoordinated and redundant data
mart/data warehouse efforts� Data strategy and data management initiatives
not linked to business priorities and needs� No common framework to address
integration/communication needs across organization boundaries
� No roadmap to identify integration points across organizations, project types, or logically sequence re-engineering and/or transformation initiatives in the company
� No center of competency to execute/support BI initiatives
� Confusion over lack of common language around needs, solutions, and approaches
� No BI technology standards� Inability to recognize and manage cross initiative
dependencies� Inability to leverage past investments � Inability to anticipate BI needs� Multiple versions of the truth� Lack of improvement in cycle time to meet new
BI needs� Not effective leverage skills and resources
across BI initiatives
© 2010 IBM Corporation
Loading issues
� Many data warehouse installations have problems with
– Loading predictability– Keeping the batch window open
� No procedures for follow up on errors in the source systems effecting the confidence
� Loading is a project related issue
Records per Day
0
100.000.000
200.000.000
300.000.000
400.000.000
500.000.000
600.000.000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Date
No o
f R
eco
rds
2005-01
2006-01
2007-01
Number of loaded COPA records (2006)
0
100000
200000
300000
400000
500000
600000
700000
800000
1 2 3 4 5 6 7 8 9 10 11 12
Month
Reco
rds High
Low
Average
High in month 6 & 11 has been removed
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1 2 3 4 5 6 7 8 9 10
Month
Red
Amber
Green
Records loaded by day in January (3 years)
Variations in number of loaded records Loading predictability per month
© 2010 IBM Corporation
Agenda
� What is BAO
� Having data simply is not enough
� Advanced Analytics have many forms– Checkout Analytics Surveillance Engine– Fraud and Abuse Management System
� Develop a business case for Advanced Analytics
� What problems are our customers facing
� Consolidation of the data warehousing platform
© 2010 IBM Corporation
Annual cost saving of around $100 million in an American Bank
BI AnalyticsSources
Supply side Consumption side
Data Repository
Reference Data Views
CUSTOMER
PRODUCT
INDUSTRY
ASSOCIATE
ORGANIZATION
Reference Data Views
CUSTOMER
PRODUCT
INDUSTRY
ASSOCIATE
ORGANIZATION
Semantic Layer
Data Governance / Data Quality
Metadata
Security and Data Privacy
Systems Management & Administration
Hardware & Software Platforms
$70MM - $85MM $45MM - $55MM$30MM -$35MM
Landing Zone
DLZ
Hard Exceptions
ProcessMonitor & Control
Logging
Private Staging Area
Translated / Re-formatted Data
Original Data
Soft Exceptions
Certified Business
Data
Data Integration
$12MM - $25MM9
11
45
10
7
6
6
8
3
1
24
1
Supply:1. Data integration hub2. Consolidate warehouse model3. Consolidate external data4. Sunset existing IM environment5. Design new IM data integration COE
Consumption:6. Design semantic layer7. Migrate SAS functions to the
database8. Rationalize BI software9. Design new IM org model –
reporting tools (BI COE)
Cross:10. Design
governance Frameworks
11. Metadata layer
Tra
ns
form
ati
on
In
itia
tive
s
Estimated Direct Annual Cost SavingsLegend:
© 2010 IBM Corporation
Cost Take Out
� Tangible cost reductions– Disk requirements– MIPS consumption and CPUs requirements– License cost– Operations cost
• Reduction of operations cost in monitoring and managing loading
• Reduction of hardware requirements
� Intangible cost reductions– Development time and resource requirements
• Easier access to data via the semantic layer• Documented meta data• Increased reuse
– Maintenance costs– Higher loading predictability– Fewer errors due to better governance
The projects had a positive cash flow after 9 and 12 months and IBM worked
on a risk sharing contract with IBM Global finance involved
Core
InitiativesDescription
ETL Consolidate the ETL and batch
processes via a methodical
engineering approach
6% $7.750.000 22% $15.575.000
Data Quality Formalize a data quality effort to
minimize the risk of errors9% $11.900.000 4% $2.775.000
Master and
reference data
Enable a metadata strategy that
includes a repository, user
interface and creation of
metadata artefacts
9% $11.700.000 5% $3.760.000
Data model Rationalize the current data
objects to a single logical
conformed data model
3% $3.300.000 12% $8.775.000
Data marts Sunset data marts in the analytic
layer36% $46.400.000 22% $15.225.000
Reporting/anal
ytics tools
Consolidate analytics tools and
rationalize external data8% $10.800.000 5% $3.775.000
SAS Re-platform, consolidate and
governor the SAS environment6% $7.600.000 0% $0
Analytics Deploy a consolidated analytics
layer to remove the complexity
and reduce redundancies15% $18.900.000 20% $14.445.000
Governance Initiate a governance program to
manage changes, data
definitions and processes
associated with the analytics
solution
9% $11.700.000 9% $6.375.000
100% $130.050.000 100% $70.705.000
American Bank 1 American Bank 2
Total
© 2010 IBM Corporation
Example: Business case for re-implementation of DW
� The client is running 6 data warehouses across the Scandinavian countries
� Business case for data warehouse transformation project
– One unified data warehouse based on IIW– Migration of all historical data
� Business case– Cost is implementation cost excl. internal
hours– Benefits does only include tangible benefits
like• Reduction of MIPS and CPU capacity• Disk capacity• Reduction of license cost• Reduction of operation costs• Easy of solvency II implementation• Reduction of man power due to easier
access to data and economy of scale benefits
– The business case does not include• Better reporting• Single point of truth
-60
-40
-20
0
20
40
60
80
100
120
140
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
© 2010 IBM Corporation35
© Copyright IBM Corporation 2010 All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warrantyof any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, these materials. Nothing contained in these materials is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software. References in these materials to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in these materials may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way. IBM, the IBM logo, Cognos, the Cognos logo, and other IBM products and services are trademarks of the International Business Machines Corporation, in the United States, other countries or both. Other company, product, or service names may be trademarks or service marks of others.