Business of Data Warehousing Foundations Essay

Executive SummarymySupermarket is a grocery shopping and simile web come in which aims to deliver customers with the best price for their shopping. This report examines how entropy w beho utilize provided mySupermarket with the foundation in which to build a victorious enterprise, and departed a subsequent expansion into the contrast lore sector. The research draws attention to the problems and limitations that mySupermarket encountered including coping with divers(prenominal) sources of information streams, customer loyalty issues, achieving real- snip data, data integrity and generating a sustain fightnt tax stream. These problems were tackled respectively finished building their own data warehouse, adopting a CRM strategy underpinned by their warehouse, adopting Microsofts SQL software, supermarket website crawling, offering targeted publicize space and the realisation that the granularity of detail they offered, would allow them to expand into the personal line of credit intelligence sector.The report appreciates the importance of storing data, but concludes that data itself is the prerequisite to victory, and that good management is needed to substitute this data into meaningful education. It is thence a combination of data warehousing and good management that has enabled mySupermarket to become a successful venture.IntroductionOn the 31st August 2006, entrepreneur insurrectionist butt end received a s sluice-figure sum from investors to transform the way consumers shop for their groceries. From this, the price comparison site mySupermarket.co.uk was born and the bon ton has utilised data warehousing to give consumers access to cheaper grocery shopping. The venture has not been without its problems, however four years on the confederacy has withstood Adam Smiths Invisible strain1 and grown into a c.10m companymySupermarket is a grocery shopping and comparison site that allows customers to compare and shop from four main UK supe rmarkets in one exchange place. Their mission statement is to get the best possible price for your supermarket trolley while enjoying an easier and more consumer-friendly shopping experience. Through the use of SQL and data warehousing, mySupermarket is able to collect product pricing, promotion and availability data straightway from retailers websites. It then uses its proprietary technology to match uniform Stock Keeping Units (SKUs) across retailers. afterwards sign investment from Greylock Partners and Pitango Venture Capital (investors in Facebook & LinkedIn), mySupermarket have faced the same difficulties as other price comparison sites in generating a sustainable revenue stream after arsehole declared that the portal would remain free in principle for shoppers.The customer proposition for mySupermarket is to first log into their account. past choose which supermarket to shop at from Asda, Ocado/Waitrose, Sainsbury or Tesco. Tick their preferred supermarket and choose a delivery time/date, then start to shop. mySupermarket is updated on a unremarkable basis so that the prices shown are the most competitive. Once the customer has made their choice of store, they start to shop by using the tabbed choices along the top of the page. These are divided up into virtual aisles so making a choice from Fruit and Veg, Meat, Fish & Poultry, 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 lead 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 can be defined as, asubject-orientated, integrated, time variant and no n-volatile, collection of data in support of the management decision making process. It is, in essence, a large data storage facility which enables an enterprise to gain a competitive advantage through analytics and business intelligence. Providing integrated access to multiple, distributed, mingled databases and other information sources has become one of the leading issues in database research and industry, IEEE reckoner (1991) which can be seen through the success of First American great deal (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 take back new business opportunities by providing Automated 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 high-pitched importance placed on the quality of data, as without it, meaningful analysis is impossible. Data collection should therefore be taken with a high aim of detail, and have solid definitions, as to avoid subjectivity.The purpose of a data warehouse is to support creative strategic decision making through a greater granularity of information with a consistent view of whats happening.Customer Relationship Management (CRM) emerged in the 1990s at a time when customers were becoming damp informed and less brand loyal. CRM is an integrating of technologies and business processes used to satisfy 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 subsequentbenefits of CRM, is that firms are able to exploit the 8 020 principle which states that some customers are more Copernican/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 congress 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 growing interest in online grocery shopping and felt that it was an area that could be exploited (Fig. 1).Figure 1 Mintel Intelligence Online marketplace DataStern spent 18 months before the launch developing the software and tweaking the concept (Fig. 2).Figure 2 Adaption of Martin et al., 2005 193The data warehouse was developed through crawling3 the four supermarket websites and adding product pricing, promotion and availability data to the warehouse. Once this data was implemented in the warehouse, proprietary techno logy and SQL software allowed mySupermarket to match identical SKUs across retailers. This data was also used 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 operate an efficient service 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 Shop button, saving customers time on their shopping.mySupermarket ProblemsMany problems can arise through the use of data warehousing, both technically and commercially. According to Mintel Intelligence (2009), Consumer loyalty is fairly low in the price comparison market with more than 14 million people (c.58% of market) having used trio or more different price comparison sites. Underlying these efforts was t he recognition that, to succeed with this strategy, it must know its customers exceptionally well and leverage that knowledge in website design, service and interaction with their clients. mySupermarket would therefore have to find a strategy to retain a loyal customer base in a notoriously disloyal sector.Kimball & Ross (2002) state that a common pitfall of data warehousing is to presume that the business, its requirements, analytics, implicit in(p) data and supporting technology are static an early on problem mySupermarket encountered was the variation in regional pricing and a growing demand for real-time data.Another problem with data warehousing is ensuring the integrity of data, this is typically a human procedure and so subject to human error. Even the most sophisticated data mining systems cannot produce good analysis from short(p) 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 pa tients were being born on the eleventh November 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 intelligent 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 ontogenesis projects typically taking up to three years to complete. Some of the challenges of such problems may include 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 terms of creating a homogenous data store.Finally, as with all comparison sites, the major(ip) obstacle facingmySupermarket 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. Or iginally, mySupermarket didnt operate a search advertisement scheme (a central platform for companies such as Google eg, BP paying 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 recognised that they would have to expand their commission if they were to generate a large enough turnover to operate a successful business.mySupermarket Technological ImpactThe first problem mySupermarket addressed was the industries poor customer loyalty. They decided to attack 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 lists and regular shop s. mySupermarket realised that the information stored in their data warehouse could be exploited to acquire these demands and increase customer utility. Subsequently, a Health Checker feature was launched based on the Food Standard Authoritys approved traffic accrue 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 the 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 absolute ly flow rate picture of an organizations business and customer J. Vandermay (2001). To combat the problem of achievingreal-time and regional data, mySupermarket used Microsofts SQL software5. Most data integration solutions focus on moving data only between homogeneous systems and database software. However, SQL integration is capable of moving 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 mySupermarket 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 being 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 commission of 5 for every first-time buyer that shops through their site and 1 every time thereafter. Other sources of revenue came from the use of advertising, which could be split into two 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 being com pared. 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 key 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 opportunity 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 New Product Development (NPD) alert reports, Online auditing reports, Price comparison reports, Product substitution report and Customer profiling reports (allowing for further use of CRM through cluster 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 contracted 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 can 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 waxy manner.The following table provides a summary of the impact that data warehousing technology had for mySupermarketFigure 6 Technolog ical Impact SummarymySupermarket ConclusionTo conclude, data warehousing has enabled mySupermarket to overcome issuessuch 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 justification is ultimately based on the value a given technology provides to the customers of the computing 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. Based on an monthly unique user level of 1 million, and 500k registered users turning 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 harvest-tide in recent years could be due to the economic climate an d not because there is a long term demand.Looking towards the future, Our investors have international ambitions, Stern said. They see the potential of transporting the model to different markets. mySupermarket are looking to expand the companys development team to support its entry into Europe and the US. mySupermarket are currently looking for another round of funding to bridge G. Murrays (1994) heartbeat equity gap. Technology firms often require follow on development funding, as cash is heavily plowed into Prototype testing and look into & Development. In terms of an exit, mySupermarket would be very attractive to major FMCG companies such as P&G, Unilever and Krafts venture arms. I turn over 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 no t enough to train harder than the competition they also have to work smarter. Davenport (2006) argues that it is virtually impossible to differentiate yourself from competitors based on products alone and so to pull 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 thirst for business intelligence, whereby companies feel thatthey 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 convert 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 Green Hypocrites is going on tour. thank God Ill be abroadCooper et al. (2000) Data Warehousing Supports Corporate Strategy at First American Corporation Vol. 24, No. 4Champion, D & Coombs, C (2010) Handout BSC070 Enterprise Information SystemsCheeseman, G (June 2010) Triple Pundit Is It Ethical For BP To Buy Oil-Spill-Related Google Search Terms?Davenport, T. 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