15.1 One Last Visit with Billy Boy

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Internet-Enabled Business Intelligence
By William A. Giovinazzo
Table of Contents
Chapter 15.  The Road Goes Ever Onward

15.1 One Last Visit with Billy Boy

In Chapter 2, we painted a grandiose picture of a completely integrated value chain. In this picture, the Internet acted as the medium through which we were able to tie the information systems of these different organizations together, forming a single virtual organization. Spanning this virtual organization is the IEBI system. Just as traditional BI permeates the entire organization, IEBI permeates the virtual organization created by the Internet. While we have discussed this idea in brief throughout this text, let us now take a moment to examine it in detail.

Figure 15.1 presents the value chain for Billy Boy Bowling Balls. This is a rather simplified chain. We can see how raw materials flow from the suppliers, are transformed into products by the internal processes of the organization, and in turn are sold to customers. This diagram, however, presents another flow, a flow of information. In a customer-driven organization, the information flows in the opposite direction of the material. The source of the information is the customer, and it flows back through the organization to the supplier. To understand how IEBI acts as the nervous system of the virtual organization formed by the Internet, we need to understand the flow of this information.

Figure 15.1. Simplified value chain.

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Billy Boy interacts with his market through three primary channels. The first is composed of distributors. These organizations are the infamous middlemen that folks are always trying to cut out when buying wholesale or direct from the factory. We discussed Billy Boy's visit with one of these middlemen in Chapter 9, demonstrating the use of IEBI in the negotiating process. The second channel consists of the customers themselves . These folks buy from Billy Boy Bowling Balls directly over the Web. Finally, Billy Boy distributes slow-moving items and out-of-date products to a secondary market using a B2B exchange. Distributors who do not necessarily have distribution agreements with Billy Boy can purchase these products at reduced prices through the exchange. Since they are slow-moving items or last season 's products, there is little if any channel conflict with Billy's other distribution channels.

As products flow from Bill Boy Bowling Balls to customers through these channels, information flows from the customers to Billy Boy. The information the sales department receives from the first channel, the distributors, are sales forecasts. The distributors realize that providing this information to Billy Boy helps him plan production and meet their needs more efficiently . The forecast data from the different distributors is aggregated along with data from the Web site and secondary markets such as B2B exchanges. Once consolidated, it provides critical information to production and finance.

Production uses the information to plan the product mix. How much of which products should they produce to meet demand? They also use this information for budgeting. Once they understand production demand, they are better able to anticipate their resource needs. Production gives this information to the purchasing department so that they can plan the purchasing of both direct and indirect materials.

In addition to the forecasts, the finance department receives the resource requirements from the different departments. Finance uses the forecasts to predict revenue. They are able to predict spending from the resource requirements. With these two sources of information, they are able to compile a budget. This is all pretty much prima facie. Businesses have been running this way for hundreds of years . How does IEBI change this process?

In fact, IEBI doesn't change this process; IEBI strengthens it. Tighter integration with our distributors provides more timely information. Organizations can also apply data mining techniques to improve the accuracy of the forecast. Perhaps a distributor under- or over-forecasts demand at irregular intervals. Data mining can determine the conditions that cause these errors and adjust the projected demand accordingly .

Another important piece of information is data concerning the customers themselves. The sales department receives this information from their Web site, where they have direct access to their customers. This data is analyzed by marketing along with the all-important demographic data. The results of this analysis, customer intelligence, are sent to production for input into product design. Customer intelligence is also provided to the sales department to assist them in being more effective in reaching their customers.

The ultimate destination of the information, although they may never see it as such, is the suppliers. These are the companies that provide Billy Boy with both direct and indirect materials for production. We can see that Billy Boy is to these suppliers what the distributors and customers are to Billy. As Billy Boy is more able to see into the future, to forecast, to understand customer needs and wants, the better he is able to plan the strategy of his organization. By the same token, Billy Boy's suppliers will also benefit from understanding Billy Boy's needs and wants. The further out and the greater the reliability of this understanding, the greater the benefit of the insight. As the quality and timeliness of the data to Billy improves , we continue the process by improving the quality and timeliness of the data to Billy's suppliers.

Our description of Billy Boy's virtual organization has been limited to the data flow. Figure 15.2 presents an information infrastructure that enables this data flow. If we compare this structure with what we had when we first met Billy Boy way back in Chapter 4, we will see a much cleaner structure. It is an environment providing complete integration both within the organization itself as well as with suppliers and distributors.

Figure 15.2. Billy Boy Bowling Balls information infrastructure.

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The first thing we notice is that all of the systems have been consolidated. Rather than maintaining a separate environment for each application, we have moved everything to an application cluster. In moving the operation to this one centralized environment, we have moved the data and metadata, including the business rules, to one place within the organization. We have quite literally created one instance of the truth.

We have continually described the information infrastructure as the organization's nervous system, with the IEBI system being the cerebral cortex in which the intelligence resides. The purpose of the organism's intelligence is to coordinate the activities of its various parts . This of course mandates that the intelligence of the organism be centralized. Proof of this is that there are no organisms with two brains . The same is true of the organization. To effectively coordinate the activities of the different parts of the organization, there must be a central system.

Examining this figure, many may be concerned with performance. Is it truly possible to support the processing demands of anything but a moderately sized organization? To solve this problem, we distribute the processing vertically and horizontally. We distribute the application vertically across tiers of our Internet-enabled information infrastructure. Within each tier , we distribute the application horizontally across application clusters and server farms.

In an application cluster, we create a single virtual server from multiple systems. There are several benefits to this strategy. First, this reduces cost. Rather than purchasing one large, expensive system, we can deliver the same processing power with several lower cost systems. A second important benefit is redundancy. In a single system environment, when that one server goes down, the entire business is brought to a screeching halt. In a clustered environment, when an individual system in the cluster fails, the other systems take on the additional load. While this may result in reduced performance, the business can still operate .

We should be careful not to underestimate the value of high availability in an Internet-enabled world. When we attempt to reach our customers over the Internet, we are establishing a 24/7 environment. When our system is down, so too is our communication with our customers and suppliers. Clustering provides a means to meet these demands. Consider situations in which we need to upgrade software or perform preventive maintenance on the system. In a clustered environment, we remove that system from the cluster, perform the maintenance, then reintegrate that system into the cluster. There is never an interruption of service.

Another concern with moving to a single instance is supporting both our data warehouse and our Enterprise Resource Planning (ERP) applications in a single operational environment. Traditionally, data warehouses have been kept separate from the ERP systems so as to not impact the operation of the business. To quote Emerson, "a foolish consistency is the hobgoblin of little minds, adored by little statesmen, and philosophers and divines." In considering whether we can practically run our ERP system and our data warehouse on one system, we should consider the ability to partition the cluster. It is possible to partition our systems in such a way that one set of servers in the application cluster give priority to the ERP system and another set give priority to the IEBI system. While at first this may not seem significantly different than running the systems in two different clusters, there is a significant difference, as shown in Figure 15.3.

Figure 15.3. Application cluster partitioning.

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Under normal operations, we can balance the load of the system based on our processing requirements. As shown in Figure 15.3 (a), during the day, when there is a heavy demand on the ERP systems, we give a higher priority to the ERP applications. In the evenings and off-peak hours, we shift the priority to the IEBI applications. This shift in priority is shown in Figure 15.3 (b). If an ERP system should fail during peak hours, as we see in Figure 15.3 (c), we shift the responsibility of an IEBI server to the ERP system until the failed system can be replaced .

Similar to application clusters, Billy Boy has clustered his Web servers into Web server farms. As you will recall from Chapter 6, resources are located on the Web by way of a domain name. The DNS server links that name with an IP address of a server that in turn is used to identify the machine address burnt into the server's network card. In a server farm, a single DNS name and IP address is used to identify the routing server. This server can take the form of a specialized device designed for this purpose. When a request is sent to server farm's IP address, the routing server redirects the request to another server within the farm. Each server within the farm has a unique IP address.

Another important change in the information infrastructure that makes the centralization of applications possible is the horizontal partitioning of the applications. While the architecture shown in Figure 15.2 may be reminiscent of a mainframe environment, there is an important distinction: the application server. In Chapter 5, we discussed in detail the evolution of the Internet. We saw the movement of the application from mainframe (or the client in two-tiered architectures) to the middle tier. In this way, we further distribute the processing, reducing the overall load on the central application cluster. From our previous discussions, we should have an appreciation for how the application server farm can improve overall performance.

It is important to note that by front-ending the central system, the application cluster, with an application server farm, we provide global access to the single source of information. As we can see in Figure 15.2, all decision makers and all line-of-business managers are given access to the one authoritative source of the truth through their information portals. This by itself is significant. More importantly, however, we can tightly integrate our information systems through this multitier architecture with those of our distributors and suppliers. We can do this through Web services.


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Internet-Enabled Business Intelligence
Internet-Enabled Business Intelligence
ISBN: 0130409510
EAN: 2147483647
Year: 2002
Pages: 113

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