Paper360 - March/April 2018 - 15

What's Included in
Business Intelligence?
There are two types of business information: internal and external. The phrase "internal
data" covers payroll, production, raw material purchases, and other activities the company can measure directly about itself. Most companies have conquered the challenge of
gathering and reporting internal information with ERP, MES, and other similar systems.
"External data" describes the more chaotic outside world of markets, customers, competitors, suppliers, and regulators-a world that is complex and constantly changing. Yet it is
this external world that determines most of the success or failure of the company's activities. This kind of business intelligence can, and should be, a strategic competitive weapon.
to support data-driven decision making in the
pulp and paper industry, and coaching in their
use, has taught us the principles that make
business intelligence work.
One of the most important is that senior
management must instill an expectation of
driving decision making with data and analytics. Data-driven decision making is an organizational skill that differentiates a company
from its peers. Skills and habits develop only
with practice, so senior management's insistence is a key success factor. This is Principle
#1: Getting full value from business intelligence requires a corporate culture of datadriven decision making.
Decisions people make in the paper industry
are expensive because of the industry's scale
and capital intensity. So, business intelligence
and data-driven decision making deliver a lot
of leverage-which can be positive or negative.
This means that BI support must be highly
reliable. Just as someone would not build a
critical product like an airplane without rigorously testing the materials, one should not
base a company's strategy on business intelligence without assurance of its reliability. Thus,
Principle #2: A business intelligence system
must be quantifiably reliable; this can happen only by meeting certain requirements,
one of which is near-perfect data quality.
Another important factor is that each business decision is unique. Every company's
situation is at least a little different from its
competitors', and those circumstances are
constantly changing with time. Business
intelligence support must be both flexible and
precise-it must answer any question business
people can express and it must answer that
question exactly, at that precise moment, for
that particular need. Traditional sources like
look-up directories, canned reports, newsletters, multi-client studies, and other commodity sources of news and information don't do

that. This is Principle # 3: A business intelligence system must have the power and
flexibility to address any differentiated, precise question its user asks. This can happen
only with enough data detail, foundational
database structure, and tool design.
While the cumulative impact of companies' business decisions is huge, the cost
of business intelligence that informs those
decisions is actually extremely small. Its low
cost gives business intelligence users incredible leverage, making investment in business
intelligence one of best returns available in
today's environment. The critical impact of
data-driven decision making also means that
one would always prefer to have more reliable,
more capable business intelligence support if
it were available. Principle # 4: It is almost
always worth investing in more capable and
reliable business intelligence.
AREN'T WE ALREADY USING
BUSINESS INTELLIGENCE?
Almost everyone uses business intelligence
to some extent. Over the years, Fisher has
observed pulp and paper professionals' use
of information and decision making processes
and we've identified the key functions business
intelligence should provide. We've segmented
those best practices for each type of company
in the pulp and paper industry (producers,
suppliers, investors, etc.).
Fisher's GapAnalysis service shows the differences between a client's current behavior
and best practices in data-driven decision
making. There are some patterns:
* The most common uses of business intelligence are "lookup" functions. Most companies (just over 80 percent) use business
intelligence for this.
* About 40 percent of clients we've worked
with initially used business intelligence also
for estimating market size.

* The third most common use (just under 25
percent) is identifying potential customers
for specific products (among suppliers) and
evaluating competitors (among producers).
That said, some of the lesser-used functions of business intelligence are arguably the
more valuable ones. For instance, fewer than
10 percent of companies initially use business
intelligence for one of these purposes:
* Micro-segmentation: how much potential
each customer and sub-segment has, and
the customer's potential ROI from buying.
* Optimization: which capital or R&D projects to invest in based on market size, value
proposition, and expected ROI.
* Forecasting: how customers' business cycles
will affect demand and buying behavior.
We have observed that, while companies in
the industry may access business intelligence
fairly frequently, they often put it to lower-value
uses. One explanation for this is that companies
have trained themselves out of data-driven
thinking for lack of reliable resources that
support and reward such endeavors. The fact
is, there are many more uses of data-driven
decision making that most companies fail
to exploit, yet which can significantly bring
forward opportunities and drive profitability.
REAL-WORLD EXAMPLES
The following examples illustrate three
important factors: the impact that business
intelligence can have; how inexpensive business intelligence is compared to its impact; and
that business intelligence works only when it
meets certain strict requirements.
Case Study 1: Defending an M&A deal
to anti-trust regulators
A large paper producer made a successful offer to acquire another company. The
Department of Justice (DOJ) challenged the
deal for having the potential to over-concentrate the market's capacity. DOJ staff produced
data showing a post-acquisition level of concentration in the grade that had typically
caused courts to prohibit mergers.
The acquirer, however, showed with credible
technical detail that many machines serving
an adjacent grade had available, but hidden
capacity because they could "swing" into producing the grade in question. It was argued
that this expanded the definition of the grade
segment (Figure 1). DOJ staff conceded the
point and dropped the challenge to the merger.
The cost of the business intelligence support
was about five hundredths of a percent (0.05
percent) of the cost of the acquisition.
Paper360º MARCH/APRIL 2018

15



Table of Contents for the Digital Edition of Paper360 - March/April 2018

Setpoint
Over the Wire
The Importance of Safety Training
Data & Decision Making
RISI European CEO of the Year: DS Smith’s Miles Roberts
Buckman’s Junai Maharaj on ‘The Art of the Possible’
Fapajal Tissue: Old, New & Customer-Centric
Progroup Turns 25
PIMA, Paper360° Co-Host Executive Panel
Creating a Lignin Culture
Benefits of Drive-Through Design
Sustainability as Business Leverage
CIPTE Show Highlights Innovation and Sustainability
TAPPI Journal Summaries
Leadership in Maintenance: Where Do We Start?
As a New Reliability Engineer, Are you Confused About Your Role?
R&M Tips
Paper and Board Have Key Roles in the Future of Packaging
Global Paper and Paperboard Demand Growing Despite Declines in Graphic Paper
PPI Awards Showcase Industry Excellence
TAPPI News
ASPI News
Index of Advertisers
Paper360 - March/April 2018 - intro
Paper360 - March/April 2018 - ebelly1
Paper360 - March/April 2018 - ebelly2
Paper360 - March/April 2018 - cover1
Paper360 - March/April 2018 - cover2
Paper360 - March/April 2018 - 3
Paper360 - March/April 2018 - 4
Paper360 - March/April 2018 - 5
Paper360 - March/April 2018 - Setpoint
Paper360 - March/April 2018 - 7
Paper360 - March/April 2018 - 8
Paper360 - March/April 2018 - Over the Wire
Paper360 - March/April 2018 - 10
Paper360 - March/April 2018 - 11
Paper360 - March/April 2018 - The Importance of Safety Training
Paper360 - March/April 2018 - 13
Paper360 - March/April 2018 - Data & Decision Making
Paper360 - March/April 2018 - 15
Paper360 - March/April 2018 - 16
Paper360 - March/April 2018 - 17
Paper360 - March/April 2018 - 18
Paper360 - March/April 2018 - 19
Paper360 - March/April 2018 - 20
Paper360 - March/April 2018 - 21
Paper360 - March/April 2018 - 22
Paper360 - March/April 2018 - 23
Paper360 - March/April 2018 - 24
Paper360 - March/April 2018 - 25
Paper360 - March/April 2018 - 26
Paper360 - March/April 2018 - 27
Paper360 - March/April 2018 - 28
Paper360 - March/April 2018 - 29
Paper360 - March/April 2018 - 30
Paper360 - March/April 2018 - 31
Paper360 - March/April 2018 - RISI European CEO of the Year: DS Smith’s Miles Roberts
Paper360 - March/April 2018 - 33
Paper360 - March/April 2018 - 34
Paper360 - March/April 2018 - 35
Paper360 - March/April 2018 - Buckman’s Junai Maharaj on ‘The Art of the Possible’
Paper360 - March/April 2018 - 37
Paper360 - March/April 2018 - 38
Paper360 - March/April 2018 - 39
Paper360 - March/April 2018 - Fapajal Tissue: Old, New & Customer-Centric
Paper360 - March/April 2018 - 41
Paper360 - March/April 2018 - 42
Paper360 - March/April 2018 - 43
Paper360 - March/April 2018 - Progroup Turns 25
Paper360 - March/April 2018 - 45
Paper360 - March/April 2018 - 46
Paper360 - March/April 2018 - 47
Paper360 - March/April 2018 - PIMA, Paper360° Co-Host Executive Panel
Paper360 - March/April 2018 - 49
Paper360 - March/April 2018 - Creating a Lignin Culture
Paper360 - March/April 2018 - 51
Paper360 - March/April 2018 - 52
Paper360 - March/April 2018 - 53
Paper360 - March/April 2018 - Benefits of Drive-Through Design
Paper360 - March/April 2018 - 55
Paper360 - March/April 2018 - Sustainability as Business Leverage
Paper360 - March/April 2018 - 57
Paper360 - March/April 2018 - CIPTE Show Highlights Innovation and Sustainability
Paper360 - March/April 2018 - 59
Paper360 - March/April 2018 - TAPPI Journal Summaries
Paper360 - March/April 2018 - 61
Paper360 - March/April 2018 - 62
Paper360 - March/April 2018 - 63
Paper360 - March/April 2018 - 64
Paper360 - March/April 2018 - Leadership in Maintenance: Where Do We Start?
Paper360 - March/April 2018 - As a New Reliability Engineer, Are you Confused About Your Role?
Paper360 - March/April 2018 - R&M Tips
Paper360 - March/April 2018 - Paper and Board Have Key Roles in the Future of Packaging
Paper360 - March/April 2018 - 69
Paper360 - March/April 2018 - Global Paper and Paperboard Demand Growing Despite Declines in Graphic Paper
Paper360 - March/April 2018 - 71
Paper360 - March/April 2018 - PPI Awards Showcase Industry Excellence
Paper360 - March/April 2018 - 73
Paper360 - March/April 2018 - 74
Paper360 - March/April 2018 - 75
Paper360 - March/April 2018 - 76
Paper360 - March/April 2018 - 77
Paper360 - March/April 2018 - 78
Paper360 - March/April 2018 - TAPPI News
Paper360 - March/April 2018 - 80
Paper360 - March/April 2018 - ASPI News
Paper360 - March/April 2018 - Index of Advertisers
Paper360 - March/April 2018 - cover3
Paper360 - March/April 2018 - cover4
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