WHEN THE DATA IS IN BULK WE USE DATA ANALYTICS TO MAKE DECISION / SMALL DATA IS THERE THEN IT IS DATA ANALYSIS

The three main of reasons for concern for DFG

The year 1997 The economic crisis that gripped Asian countries during the latter part of 1997 was one reason for the downturn. A second and more important reason, one that worried DFG significantly more than the Asian crisis, was the increasing competitive pressures that DFG faced from European and US retail chains preparing to gain a foothold in the growing Asian market. Another concern was its low profit margins compared to its competitors in Hong Kong and China and other retailers in Europe and the US

DFGs New Business Strategy

In order to retain its dominant position in the Asia-Pacific region, DFG had decided on a new Business strategy. Firstly, the strategy entailed defending its existing markets through a process Of rationalisation focused on the disposal of, or closure of, its non-core operations. The second component of the strategy was to respond to the increased competitive threat through changes to its organisational structure, and in this respect it had decided to de-federate its businesses and operate as a single entity wherever possible. The third dimension of the strategy was to improve on its market share and customer base through exploiting new markets and opportunities consistent with its core market capitalisation strategy. Existing Systems The existing systems within DFG were the Store Systems and the Operational Systems.
Store Systems

These systems were those deployed at the retail stores of various business units of DFG. The retail store applications were point-of-sale systems, procured from several vendors and customised for each stores requirements. Each store had its own local area networks (LAN) on which the store system was implemented.
Operational Systems

The operational systems that supported DFGs retail operations were the following: Central Merchandise Management, which included Item and Vendor Management, Pricing and Promotions, Stock Management, Trading terms/costs and Store Replenishment Financial and Accounting Management Inventory Management

Warehouse and Distribution Management Human Resource Management

Problems with Existing Systems

These systems were closed walls, with no provision for information exchange across business functions. . As a result, several different versions of the software existed, significantly increasing the maintenance overheads. Additionally, many business processes within DFG were manual and inefficient, thereby slowing information processing and decision-making. This lack of customer knowledge was seen as a formidable barrier to realising the quantum-level leap that DFG intended to achieve in sensing and responding to customer needs. There was also a dearth of information for management decisions. The relatively scant information that was available was fragmented, voluminous, spread across diverse formats and not current. salesmen and those in the warehouse and distribution functions had problems accessing corporate information from remote locations. Multiple locational acess is not allowed

Problems with Existing Processes

large number of small companies at geographically dispersed locations had been acquired over a period of time. Since there was no communications network, each of these companies operated independently. There was duplication of some assets and wastage of human resources. For example, although Wellcome operated in the daytime and 7- Eleven at night, each had its own fleet of trucks for stock movement, thereby increasing transportation costs. In terms of business processes, store replenishment was one process that required significant manual intervention. Each company had its own set of suppliers from whom goods were purchased. This resulted in different prices being paid for the same items because they came from different suppliers. Economies of scale were not possible. There was little power over vendors in terms of negotiating terms of trade, particularly in regard to discounts on bulk purchases. Monitoring of stock shrinkage was also a major problem. Sometimes excess goods were supplied and charged to the stores. A consequence of high inventory cost was that DFGs business units operated at margins that were much lower than those of other operators

FIRM A Firm A It found that significant improvements in DFGs operations and profitability could be achieved by building a corporate management information system, supported by the right technology and communications infrastructure. It would enable managers to access corporate information in various ways and across all functions, thereby facilitating the decision-making process. The major recommendations were as follows:
Store Operations

It was felt that DFG could significantly improve sales and customer satisfaction by adopting electronic retailing as a subset of its retailing function. In this respect it suggested that the store operate in two environments - the physical and the virtual (electronic). Features suggested for inclusion in the electronic store application were as follows: It would be a World Wide Web (the Web)-based retail system using client-server architecture, aimed at providing an Internet based home shopping system consisting of an Electronic Store and an Electronic Distribution Centre (E-DC). The E-DC was to provide the services of a fulfilment centre, including product availability, delivery status, physical delivery and product warehousing. The application would interface with other functional units linked to the retail operations, such as the head office, distribution centres, vendors, consumers, and the financial institutions for settlement of electronic transactions
Network Computing and Application Re-Design

It was recommended that applications, centrally deployed in the mainframe environment, be re-written and ported on the latest n-tier client server architecture, with the Internet browser (or other thin-client access device) providing the user interface and an application server or information broker as the middle tier. This design model would help in realising the benefits of information access and data sharing. Other benefits of adopting such a topology would be scalability, application maintenance and software component reuse.
Application Integration and Information Sharing

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Remote Access

DFG had three distinct classes of mobile users with three different requirements for mobile services. They were the telecommuters, travelling employees and the task-oriented mobile users working for the warehouse, distribution, inspection departments and the stores. It was recommended that these users be provided with secured, location-independent access to corporate information resources. .

Data Warehouse and Data Mart

The consulting team recommended that DFG should develop Data Warehouse and Data Marts to facilititate data analysis and decision-making.

Inventory Management

Firm A found that inventory was the largest single cost-factor in DFGs retail operations. DFG. It was recommended that access points on the proposed corporate intranet be provided to the vendors so that in cases where direct buying by the stores was involved, store orders could be sent to the vendors in EDI formats. Similarly, vendor invoices could also be sent to the Central Office in EDI formats.
Development of Core Competencies

To this end, it recommended that a systematic assessment of the required technical skills be made and necessary training plans and recruitment schemes be charted out so as to have core competence within the organisation.

FIRM B

Firm B believed that technology alone could not bring competitive advantage unless it was planned in the context of an organisations present and future business needs. In addition to technology, it placed emphasis on business processes, viewing them as major determinants of an organisations ability to develop and retain competitive advantage.
Technology Planning Process

The recommended technology planning process comprised of a business component and a related technical component. The business component consisted of the identification of business processes and the re-engineering of business processes considered critical to the successful pursuit of DFGs business strategy. The technical component pertained to the identification of technologies to support the business processes and an implementation plan.

Business Component Firm B viewed the entire set of operations within DFGs business units as a set of Business Process Domains (BPDs). Five such BPDs were identified: In-Store Systems, Business Unit Operational Systems, Business Unit Analytical Systems, Group Systems and Core Infrastructure Services

Specifically, the following characteristics were considered crucial for success of systems within each BPD. Availability, specifying recovery plans, tolerance for system outages etc. Assurance, specifying security, integrity and credibility requirements Usability, specifying user interface requirements Adaptability, specifying interoperability and porting requirements

The following systems and business processes were identified for re-engineering: Store Systems In respect of store applications, the recommendation was that common store applications be built around standardised technology. The store applications would be resident on a back-end server, which would also store transaction data so as to facilitate stock monitoring at the store level. Store LANs would be networked with the data centres and the central office at Hong Kong for data transmission. It was suggested that Store Systems have the following attributes: Share a common information base Be integrated Support co-ordinated actions. In-store systems needed to support distributed transactions Interface with systems external to the Store Systems Be flexible to accommodate changing business requirements and operation in multiple geographic territories Be scalable from a minimum of two to a maximum of fifty shopping lanes Be adaptable to operate across DFGs multiple retail formats Be extensible to accommodate new technologies and releases Be remotely maintainable Integrate with standard DFG management mechanisms Inventory Management A central merchandising system within each business unit would monitor the inventory levels at each store and generate individual store orders. The store orders would then be routed to the respective stores for their approval. Approved orders would be consolidated and purchase orders generated to suppliers. It would also provide DFG with additional power to negotiate terms . A future direction recommended in this regard was the integration of the supply chain across business units, and continual stock level monitoring at individual stores directly by the suppliers, who would then supply stocks as necessary Category Management While the suggested changes in the store operations would enable detailed data capturing on customer transactions, it was recommended that data warehousing technology be adopted to facilitate organisation and analysis of data for marketing to customer segments .

Electronic Commerce

Technical Component. A corporate-wide area network to provide group-wide information systems through interconnections across the various BPDs identified within DFG was recommended. Over time, the Core Infrastructure Services BPD was seen to develop as the foundation for distributed computing within DFG and hence provide group-wide information management capability. It was initially planned to extend only up to the boundary of each business unit so as to provide inter-business services. As the functions available within the BPD became more relevant to the information systems within business units, the domain was planned to be extended to provide intra-business unit services. To facilitate this progression, all internal services pertaining to a business unit were required to be provided in accordance with standards and technologies selected for the Core Infrastructure Services BPD. A key function of the Core Infrastructure Services was to provide enterprise-wide system security, integrity and credibility, particularly within the In-Store BPD. Some of these services were to be invoked explicitly by application programmes, while others were to be used implicitly through the use of operating systems, databases, communications, security or message-based components. In respect of each BPD, continuous or near continuous availability of systems, interoperability with other systems, usability in terms of user interfaces etc., were other functions provided by the Core Infrastructure Services.