search

shuijian-xu / hive

0 stars 0 forks source link

the difference between the terms strategic and operational? #63

Open shuijian-xu opened 5 years ago

shuijian-xu commented 5 years ago

In general, strategic matters deal with planning and policy making, and this is where a data warehouse can help. For instance, in the Wine Club the decision as to when a new product should be launched would be regarded as a strategic decision.

shuijian-xu commented 5 years ago

Whereas strategic matters relate to planning and policy, operational matters are generally more concerned with the day-to-day running of a business or organization. Operations can be regarded as the implementation of the organization's strategy (its policies and plans).

shuijian-xu commented 5 years ago

operational questions such as:

  1. How many unfulfilled orders are there?

  2. On which items are we out of stock?

  3. What is the position on a particular order?

Typically, operational systems are quite good at answering questions like these because they are questions about the situation as it exists right now.

shuijian-xu commented 5 years ago

The sort of questions the directors of the Wine Club wish to ask are:

  1. Which product lines are increasing in popularity and which are decreasing?

  2. Which product lines are seasonal?

  3. Which customers place the same orders on a regular basis?

  4. Are some products more popular in different parts of the country?

  5. Do customers tend to purchase a particular class of product?

These, clearly, are not “right now” types of questions and, typically, operational systems are not good at answering such questions.

shuijian-xu commented 5 years ago

The customer administration system contains details of current customers. The stock control system contains details of the stock currently held. The order processing system holds details of unfulfilled customer orders and the shipments system records details of fulfilled orders awaiting delivery to the customers.

Notice the use of words like details and current in those descriptions. They underline the “right now” nature of operational systems. You could say that the operational systems represent a “snapshot” of an organization at a point in time. The values held are constantly changing. At any point in time, dozens or even hundreds of inserts, updates and deletes may be executing on all, or any, parts of the systems. If you were to freeze the systems momentarily, then they would provide an accurate reflection of the state of the organization at precisely that moment. One second earlier, or one second later, the situation would have changed.

shuijian-xu commented 5 years ago

Now let us examine the five questions that the directors of the Wine Club need to ask in order to reach decisions about their future strategy.

What is it that the five questions have in common?

If you look closely you will see that each of the five questions is concerned with sales of products over time.

shuijian-xu commented 5 years ago

Looking at the first question:

Which product lines are increasing in popularity and which are decreasing?

This is obviously a sensible strategic business question. Depending on the answer, the directors might:

  1. Expand their range of some products and shrink their range of other products

  2. Offer a financial incentive on some products, such as reduced prices or discounts for volume purchases

  3. Enhance the promotional or advertising techniques for the products that are decreasing in popularity

shuijian-xu commented 5 years ago

For the moment, let's focus in on sales of wine and assess whether the information required to ask such a question is available to the directors. Have a look back at the EAR diagram at the beginning of the case study. Remember we are looking for “sales of products over time.” The only way we can assess whether a product line is increasing or decreasing in popularity is to trace its demand over time.

If the order processing information was held in a relational database, we could devise an SQL query such as:

Select Name, Sum(Quantity), Sum(ItemCost) Sales From CustomerOrder a, OrderItem b, Wine c Where a.OrderCode = b.OrderCode And a.WineCode = c.WineCode And OrderDate = <today's date> Group by Name

If this query were to be executed at the end of the day, it would return the value of all the orders received for the day.

The ability for us to discover the value of orders received today is a good start. This is useful information, but what we would really like to do is to examine the trend over (say) the past six months, or to compare this month with the same month last year.

So what is the solution?

Let's say we were to execute our query every day and append the results for each day in a table. That way, over time, we would be able to build up the historical information that we need.

This is the beginning of a data warehouse.