ad4026 bi sesión 04

Lecture 04 Modeling Business Decisions

Dr. Jorge Ramírez Medina

Demo; Power BI Microsoft


Team Work• Prototype your strategy1. Disrupt your Business• New bikes ideas and designs• Improve Customers relationships or Brand recognition using

technology2. Digitize the core business• Marketing, Manufacturing, Back Office processes

3. Create Value from Data• How leverage data?, what data?. Specify revenues.

4. Create ecosystem• The value chain


Disrupt your Business• Technologies that create an entirely new offering can

lead to the formation of new industries. • Instead of competing to capture a share of the value in

an existing industry, a new technology can allow a firm to create and capture value in an entirely new industry.• According to Philip Evans & Patrick Forth, there are

three competitive tech waves namely: Commercial Internet, Economies of mass and Hyperscaling


Digitize the core Business• Business Intelligence is a set of methods, processes,

architectures, applications, and technologies that gather and transform raw data into meaningful and useful information used to enable more effective strategic, tactical, and operational insights and decision-making (to drive business performance).• The 5 Stages of Business Intelligence are; Data, ETL,

Data Warehousing:, Analytic Engine, Presentation Layer (related to BI LifeCycle)


Create Value from Data• Knowledge is the necessary condition for decisión

making. Data-Information-Knowledge• 2 Types of information processing; Transactional OLTP

and Analytical OLAP• OLAP is a function/operation that is optimized to answer

queries that are multi-dimensional in nature• A Data Warehouse integrates the information generated

in all areas of business activity (sales, production, finance, marketing, etc.) and allows access to and use of the information.


Create Ecosystem• 3 levels of BI; Strategic, Tactic and Operational• Power BI is a free BI tool• Gartner Hype Cycles provide a graphic representation

of the maturity and adoption of technologies and applications, and how they are potentially relevant to solving real business problems and exploiting new opportunities.• Gartner Magic Quadrant putsTechnology Players Within

a Specific Market


Align straytegy• Dominant strategy always works better than any other

strategy, this is always the first option of a rational player.• Dominated strategy never works better than any other

strategy. For this reason there is not the option of a rational player.• Nash equilibrium is a solution concept of a non-

cooperative game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his own strategy• Companies data-driven were, on average, 5% more

productive and 6% more profitable than their competitors.


Align straytegy• Intelligence as a process, Intelligence as a product,

Intelligence as an organization.• Intelligence is information that meets the stated or

understood needs of policy makers, and has been collected, processed, and narrowed to meet those needs.• Elements of Intelligence

1. collection,2. analysis,3. dissemination, and4. covert action


Readings control


Digital Payment SystemsCredit and Debit Cards• Consumer Benefits

• Delayed payment.• Revolving credit.• Rewards.• Consumer protection.

• Merchant Benefits• Fast payment.• Assurance of payment• Increased consumer spending


Digital Payment Systems

PayPalGoogle WalletAmazon PaymentsApple Pay

https://www.paypal.com/mx/home

http://www.elfinanciero.com.mx/tech/google-analiza-traer-su-billetera-virtual-a-mexico-el-proximo-ano.html


http://www.amazon.com.mx/

http://www.amazon.com.mx/

http://www.tuapplemundo.com/funcionara-apple-pay-en-mexico/

http://www.tuapplemundo.com/funcionara-apple-pay-en-mexico/



History of Money


BitcoinBitcoin protocol, “a new electronic cash system that’s fully peer-to-peer, with no trusted third-party.”

No central party was required to verify the validity of transactions. Instead relied on an open, distributed network of computers and cryptographic algorithms to confirm the validity of transactions.


Bitcoin a little historyBefore Bitcoin; e-gold, Beenz, Facebook Credits (virtual currencies)Ecosystem;Litecoin, Peercoin, Terracoin (emerging)Now;$140 million invested in Bitcoin start-ups and an increasingNumber of mainstream companies are starting to accept payments in Bitcoin (Expedia, Dish, Dell)

https://litecoin.org/es/

http://peercoin.net/

http://terracoin.sourceforge.net/

http://terracoin.sourceforge.net/


Business models at Bitcoin Ecosystem1. Traditional bank accounts for consumers

Circle, Xapo; focused on digital wallets, which allowed consumers to store and pay

2. Traditional credit card payment processors . BitPay ; enabling merchants to accept payments in Bitcoin.

3. Serving both consumers and merchants.Coinbase; provided both merchant services and digital wallets, (two-sided platforms)

https://www.circle.com/en

https://xapo.com/es/wallet/

https://bitpay.com/

https://bitpay.com/

https://www.coinbase.com/


Class question

Is Bitcoin the future of digital payments?


Class question

International remittances

http://www.elfinanciero.com.mx/economia/remesas-internacionales-subieron-93-en-1s-de-2015-bansefi.html


Class questionInternational remittancesPros:1. Huge addressable market while still staying focused on

consumers.2. Larger fees from consumers by focusing on international

remittances than by focusing on domestic peer-to-peer payments or consumer-merchant commercial transactions.

3. Alternatives available today for international remittances (MoneyGram, Western Union) are vastly more expensive and inferior (long delays before the money is available to the recipient).


Class questionInternational remittancesCons:1. Kipochi and BitPesa have the first-mover advantage and

they focus entirely on remittances.2. Remittances require features that differ significantly from

the ones offered by “regular” wallets used for paying online merchants. Thus, it is not clear there are many synergies in doing both.

3. The direct network effects of international remittance services are extremely localized and thus do not provide a significant barrier-to-entry


Does it meet the requirements?• Prototype your strategy1. Disrupt your Business2. Digitize the core

business3. Create Value from

Data4. Create ecosystem


What about strategy?Prices may be• High $ 120• Average $ 100• low $ 50

1000 clients total Maket • 300 only buy at BitCoin Market• 300 only buy at Silver Dollar Market• 400 buy at cheaper or choose whatever of the two markets, if

price is the sameAdaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)


Game scenarioPlayers

–BitCoin, Silver DollarActions

–High prices,–Average prices–Low prices

Rules–Simultaneous decision making

Adaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)


Game scenarioReward (Payment)Case of

Bitcoin average price andSilver Dollar high Price

ThenBitcoin sells 300 loyal customers, plus 400 who go for the lowest price (300 + 400) * 100 = $ 70,000.Silver Dollar Sells 300 loyal customers. (300) * 120 = $ 36.000



Matrix

BitCoin

Dollar

High Average LowHigh 60/60 36/70 36/35

Average 70/36 50/50 30/35Low 35/36 35/30 25/25



Dominant strategy1. A strategy that always works better than any other

strategy.2. Because of that, this is always the of a rational

player’s first option.3. A rational opponent plays to select the dominant

strategy.

Tomado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)


Dominated strategy 1. A strategy that never works better than any other

strategy.2. For this reason there is the option of a rational player.3. A rational opponent never plays to select the

dominated strategy.

Tomado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)


SolvingIdentify dominant

BitCoin

Dollar


Average 70/36 50/50 30/35Low 35/36 35/30 25/25

Adsaptado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)


SolvingIdentify dominant

BitCoin

Dollar


Average 70/36 50/50 30/35Low 35/36 35/30 25/25



SolvingIdentify dominated

BitCoin

Dollar


Average 70/36 50/50 30/35Low 35/36 35/30 25/25

Adpatado del curso Competitive Strategy del professorTobiasKretschmer. Ludwig-Maximilians-UniversitätMünchen(LMU)

No Dominat Strategy


SolvingIdentify dominated

BitCoin

Dollar


Average 70/36 50/50 30/35Low 35/36 35/30 25/25


No Dominat Strategy


The key

Create Value

from Data


Class exercise


Modeling Business Decisions

Business Process Model and Notation (BPMN) is the global standard for process modeling.

You have to use a BPMN standardized symbols in order to align the meaning of symbols and their attributes.

https://www.lucidchart.com/pages/bpmn-symbols-explained

https://www.lucidchart.com/pages/bpmn-symbols-explained


List process steps1. Decide which business process in your organization

you'd like to diagram.2. Then record each step that occurs in that process.3. Make sure to take into account all factors, decisions,

and possible relationships that contribute to the workflow.


Class exercise, Lucidchart1. Start with the first event. For example, you might be

representing a process triggered by a customer's actions.

2. In this case, the customer's initiation of the process is the first event.

3. In Lucidchart, you can simply drag a Start Event shape from the toolbox to the canvas.


Class exercise, Lucidchart4. Draw lines and add symbols to build out the rest of the

process. To ensure that you're covering every step, consider questions like,• What happens when the customer initiates this

process?• How do the customer's actions affect other parts of

the organization, like the help desk or the sales department?• When do other factors and people enter the flow?

Which options or new paths do they provide?


Class exercise, Lucidchart5. BPMN diagrams can become unnecessarily

complicated when they are disorganized. 6. While BPMN has many symbols and options, it's still

possible to create an attractive, easy-to-read chart.7. Generally, the main process is aligned horizontally,

with associated symbols added vertically.8. Keep your formatting preferences consistent, since

unnecessary fonts, explanations, or colors can be confusing.

9. Try to add new elements only if they add to the overall understanding of the business process.


Class exercise, Lucidchart


Modeling Business Decisions. KPI


End of session

Gracias por

su atención

ad4026 bi sesión 04

Education