How Fast Can You Respond?
How Fast Can You Respond?
The Return on Investment from
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Management Summary"Enterprises with fast reaction times have a competitive advantage. They sell more product, deliver better customer service, and capitalize on new business opportunities sooner than their competitors."
- Gartner Group
It's every business manager's dream to be in control at all times. Knowing what's going on and being informed of exceptions is fundamental to anyone who is in charge of a process whether commercial, operational, financial, or administrative. The sooner a company knows about something, the earlier they can act to either rectify a problem or prevent problems in the first place.
New technology is pushing the boundaries of data usage, system interaction, and event notification, eliminating the delay between when events happen and when the right people find out about them. Company managers today face the challenge of information overload and need quick, concise, and timely delivery of information in a form they can understand and act upon immediately. To achieve competitive edge, organizations are moving beyond traditional passive reporting and analysis to realize the power and potential return on investment (ROI) of proactive business event notification. Automatic detection and communication of business events creates the power to manage by exception, based on deviations from defined business rules.
Business Alert Systems transform businesses into fast-reacting enterprises where managers are always up-to-date, receiving alerts on actionable events in all areas from customer problems, service execution, supply chain collaboration, efficiency, financial returns, and risk exposure. Enterprises using alerts have experienced more than 600% ROI, increased revenue through higher customer retention, and reduced costs by proactively preventing problems and saving managerial time.
Steering Through the Rear View Mirror
Traditional reporting mechanisms provide valuable historical data and will always serve a vital business function. However, reports are not the optimal medium for all information distribution. Relying solely on reporting tools and/or data warehouses equates to trying to navigate a business through economic challenges or competitive threats by looking backwardslike trying to drive a car forward by looking in the rearview mirror.
In an attempt to get more value from the raw data they possess, corporations have turned to data marts or business intelligence solutions that are fed from databases of operational information collected from internal systems, as well as customers, suppliers, and partners. These systems contain a wealth of information but often require complex and time-consuming analytical effort in order to deliver benefits. Because data warehouses represent a static copy of a corporation's database of record, they cannot be the source for real-time business event detection. Depending on the rate at which a corporation chooses to refresh its data, opportunities can be days or even weeks old before they are discovered and communicated. With the business world moving at Internet speed, latency of just hours to days can mean opportunities or customers that are lost forever.
Database vendors and application solution providers have attempted to solve the latency problem by applying low-level technology such as triggers and stored procedures that alert management when items reach a critical state, low stocks for example. But the point that matters is: How many solution vendors can scan disparate databases to monitor single business rules and then dynamically inform the relevant manager, customer, or supplier via e-mail, pager, cell phone, Web site, fax or other methods? Moreover, how many companies store the cost of a product, the demand situation, the competitor's prices and policies, the profit contribution, the supply chain situation possibly including weather forecast information all in one database, instantly accessible? Within most organizations, this information is lost across multiple databases, causing the organization to be "data rich but information poor."Business Alert Systems: The Fastest Way to Find Out How to Take Action
Now technology is evolving to meet managers changing needs, allowing companies to extend their capabilities beyond the realm of basic reports and latent data analysis tools. Business Alert Systems provide advanced notification that connects actionable information from any corporate data source to the people who need it, using their preferred communication mode. Business Alerts Systems unlock the value buried in corporate information systems, eliminate slack, and optimize company resources. Business Alert Systems allow companies to manage and leverage mission-critical dataregardless of the data sourceinto business benefits on a virtual real-time basis.
Though reports will continue to play a key role in business managementeven in the most progressive fast-reacting enterprisesBusiness Alert Systems provide distinct services:
With business alerts, the right people get the right information when they need it wherever they are. Not only do alerts make the organization and its staff more agile, they also uncover a tremendous opportunity for connecting customers and suppliers into a collaborative digital nervous system. With business partners acting in concert, the promise of instant event notification through alerts can transform organizations into fast-reacting enterprises.
Benefits of Business Alert Systems
Just imagine the potential savings resulting from early detection of customer service problems. The discovery of just one VIP customers complaint in time to proactively offer a solutionand before the competition wins the accountmay well return the investment in an event notification system. Alerts transform customer claims into positive experiences, using existing IT applications and common communication devices to the companys competitive advantage.
Alerts improve the overall business in other meaningful ways:
Calculating the Direct Savings of Business Alert Systems
Alerts provide benefits in two main areas: cost savings and revenue enhancement. First, cost savings is associated often with time savings. Consider the time a manager spends looking through reports to find critical pieces of information. With business alert systems, the critical pieces of information can be pre-established as alerts, so they are delivered automatically to the targeted manager ("set it and forget it").
According to an InfoCorp research report (June 1998), executives estimate that proactive event notification would save them between two hours and one full day per week. With eleven working months, a potential savings of two weeks to two months per year results. Multiply this figure with the number of senior managers in a typical enterprise and the potential efficiency improvement is daunting.
Another area of cost savings is in identifying problems before or as they happen, so fast action can be taken to avoid or mitigate the problem. Consider the use of alerts in a just-in-time manufacturing environment for the purpose of tracking deliveries from suppliers. By identifying and communicating late deliveries from suppliers at the moment deliveries are supposed to occur, materials buyers can take action quickly to avoid disruption to a production line.
Estimating the ROI of identifying and communicating late deliveries quickly requires identifying the cost of lost production time and the amount of production time saved with alerts. Assuming an hour of lost production time is $50,000, and alerts can reduce the number of hours down from 48 to 24 per year, the savings based on alerts is $1,200,000 per year.
Finally, cost savings can be realized in handling customer problems with alerts. One Categoric customer calculates that solving a problem within one hour of its occurring costs $57; any time beyond one hour and problem resolution costs grow to an average of $467. For this reason, the company uses Business Alert Systems to communicate customer problems to all personnel handling the particular customers arrangements.
Alerts provide a second type of return on investment: revenue enhancement. A transport company, for example, can use alerts to identify underutilized containers within a specified number of days before the container ships out. In so doing, a price reduction can be communicated to agents and customers thus generating demand to fill the space. The return in this example would be the amount of revenue generated with the communication of the price reduction.
Another example is inventory control. Similar to the forward load balancing example above, a distributor can automatically detect when inventory is either perilously low or, alternatively, on the shelves too long, and communicate that to warehouse managers and suppliers. In the former case, suppliers can replenish more quickly, and in the latter case, a promotion to reduce on-hand inventory can be implemented quickly. In both cases, revenue is generated, and generated more quickly, than it would have been without alerts.
Finally, managerial alerts that identify when established thresholds are breached can help control and produce revenue. For example, an alert that tracks margins at a retail outlet can automatically detect when margins fall below acceptable levels, and communicate this information quickly to the regional manager. This example is highlighted in the case study of this white paper.
In order to provide the optimal business alerts solution, the selected system must be very robust and provide the most flexibility in connecting to the various databases. It must be able to deliver critical pieces of information to targeted individuals as key business events occur, or not occur. There are several solutions in the market that provide some degree of alerting capabilities. Many of these solutions have limitations that made the implementations relatively difficult and the extensive use of alerts impossible.
The following criteria should be considered when evaluating a business alerts system:
Categoric Alerts: The Industry Leading Solution for Business Alerting
Categoric Alerts enables organizations such as Carpetland to manage their businesses proactively as events happen. No matter who receives the alert staff, supplier, or customer organizations benefit as users are enabled to make operating decisions based on real-time information from the universe of existing data sources within a company or across a value chain network.
The key differentiation of Categoric Alerts is that it is a separate, comprehensive architecture for alert functionality. As such, advanced alert functionality is built into the product which enables rapid construction and maintenance of alerts. Enterprise considerations such as scalability, reliability, and security are addressed with a distributed architecture that scales to handle enterprise requirements both in terms of processing and manageability. Finally, by supporting industry standards and protocols, a variety of inputs and output devices are supported, enabling deployment in any corporate environment.
The following graph summarizes how the various technologies stack up against Categoric alerts in meeting the requirements for a comprehensive alerting solution.
Figure 3: Categoric Alerts meet all requirements for a comprehensive business alert system.
None of the solutions available on the market provide the necessary components and characteristics for delivering the right information to the right people at the right time. For these reasons, Categoric has developed its comprehensive alerting system, Categoric Alerts.
Giving Companies Time to Know
Categoric Alerts is the first business event notification system that provides a powerful, integrated solution for creating and delivering alerts within an existing system environment. The Categoric Alerts solution is comprised of four components:
Figure 4: The Categoric Alerts Architecture
ROI to Take The Enterprise into the Next Century
Categoric Alerts brings business unprecedented ROI by extending the functionality of the current IT investment. By working on top of existing systems, more return can be realized from those systems by raising the visibility of critical data more quickly to more people.
Categoric Alerts is based on a standalone architecture, so the system installs very quickly¾ IT can set up and initiate the first Alert in just one day. Equally important, no alterations are required on the source databases and systems, minimizing system impact and speeding the implementation.
With Categoric Alerts, training costs are very low¾ recipients receive alerts on communication devices already familiar to them.
Most importantly, Categoric Alerts help align IT more closely with business objectives. By implementing a system for identifying and tracking critical business events, IT adds value to existing systems with great benefit to the business. And business can focus on moving the business forward, rather than combing through stacks of static, historical reports. Operations become much more responsive and customer satisfaction and loyalty improve.Call Categoric Today
To learn more about how Categoric Alerts can help your company become an alert e-Business, or to request a information package, please contact:
2445 Faber Place
Palo Alto CA 94303
Tel: (650) 858-8182
Fax: (650) 858-8183
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