Building a "sense and respond" company culture involves much more than strategy. Such a culture relies on operational intelligence—the ability to sift through enterprise data in an instant and make recommendations so front-line employees can respond to any situation in a customized way, consistent with corporate strategy and organizational goals.

Operational intelligence goes beyond strategic uses of information to look at what's happening now, enabling quick, appropriate responses to customers and logistics so opportunities aren't missed. Additionally, operational intelligence can be used in various industries and in diverse situations. The following examples demonstrate operational intelligence in action.

1. Fraud detection
The best time to stop fraud is in real time. Fraud can be detected by performing a pattern detection review of any given account at the time of the transaction. It can be simple yes-no table lookups or it can be real-time data mining scoring of five to 20 records.

Types of fraud that can be detected by operational intelligence include ticket and reservations fraud, point-of-sale (POS) returned goods, POS checkout cashier fraud, insurance claims, social welfare fraud, tax compliance, customs cargo fraud and fraud by employees.

2. ATM transactions
Banking leaders find that customers expect to be personally remembered during ATM transactions and offered relevant, timely and personalized services.

Operational intelligence lets the bank interact with customers at the ATM, building loyalty through birthday and seasonal greetings, reminders about expiring certificates of deposit and targeted product offerings based on the customer account history.

3. Out-of-stock situations
About 40% of the time, a customer in a shop finds that one or more items aren't on the store shelf. In many cases, the item is in the store—either in the back room or in the wrong location in the store.

Operational intelligence allows the retailer to determine the expected sales rate for top items by collecting data about sales in 15-minute intervals and comparing sales with historical sales. When the system identifies possible out-of-stock situations, a message can be sent to store managers or clerks to check the shelves.

4. Manufacturing application alerts
To predict or find defects in manufacturing, operational intelligence can monitor the quality levels of third-party suppliers' products or assembly lines in near real time, evaluating production costs and productivity.

It is possible to track whether delays or defects arise from a specific assembly station, machine, inventory item or supplier. The system will alert a manager when the source of the problem is identified. Supply chain problems can also be circumvented by alerting purchasing agents when an item is out of stock.

5. Worker productivity and management
Labor and resource scheduling needs to be done in real time to optimize employees, vehicles, machines or inventory. It may call for moving workers to different stores or reprioritizing job schedules.

Operational intelligence can help manage the work force, whether it be retail store associates, crew scheduling, install/repair service personnel or telecommunications provisioning workers. Further, operational intelligence can alert labor managers when parts need to be reordered, preventing work stoppages caused by parts being out of stock.

6. Dynamic Pricing
This is a process that adjusts prices at or near the point of sale, enabling pricing that appeals to customers yet maintains profit margins for the supplier.

Operational intelligence executes dynamic pricing by using offline models and analysis from the active data warehouse combined with current customer activity, prices and offers. Examples of dynamic pricing include ticket pricing, online retailing and travel bookings for hotels, rental cars and vacations.

Bringing it all together
Operational intelligence enables the small but essential decisions to be made faster and smarter. With an active data warehouse, myriad businesses—from banking to shipping to manufacturing—now serve customers better and improve their top and bottom lines.

Operational intelligence keeps your company running smoothly and enables alignment between the strategic goals and operational realities. With operational intelligence, building a sense-and-respond corporate culture will become a reality and set your company apart from the competition. T

Shirley S. Savage has published articles on technology, energy and science.

Photograph by Peter Griffith/Corbis

Teradata Magazine-June 2007