Business Intelligence - Tesla Motor - Case Study Example

Name Professor Course Date Business Intelligence: A Case of Tesla Motor Brief Background Tesla Motor is a producer of electrical cars that has been in operation since 2003 following collaborative practices of the engineers in Silicon Valley. The engineers were on mission to make a product that would prove the potential of electric vehicles acting as substitute for the fuel powered automotive. Tesla Motors is also a producer of advanced electric vehicle powertrain components for other vehicle manufacturers such as Daimler and Toyota. The company central headquarter in Palo Alto, California and operates other fully-owned subsidiaries in North America, Europe, and Asia. The company boasts a labor force of over 2000 employees. It operates about 31 stores and other service locations (Liu et al. p. 1). Tesla is on a mission to provide high performance and electrically powered cars affordable to the average consumer. The first Tesla product to hit the market was Tesla Roadster, as purely electric operated sports care in 2008. Model S is a luxury sedan vehicle built to ensure zero emission through technological advancements. Another famous model by Tesla is the model X delivered to the market in 2014 (Liu et al. p. 1). Audience for business Dashboard on Tesla Dashboards are considered as diagnostic tools necessary in offering a quick overview to the managers concerning the performance of the company at a given time. Dashboards are types of decision support systems. They are visual and interactive performance management tool that provides summary important information necessary to help attain specific organizational goals. the dashboards makes it possible for uses to identify, explore and communicated area experiencing problems and in need of corrective action (Velcu & Yigitbasioglu, p. 41). Dashboards use visual and functional features in a process aimed at improving cognition and interpretation. The different users of the dashboard have specific requirements of the information that they are seeking to acquire. The front-line staff uses the dashboard to monitor inventory. The middle managers find the dashboards useful in analyzing lagging measure. The executive management finds the dashboards useful in evaluating strategic performance of the organization with regard to the objectives. The management of Tesla will be the main user of the dashboard for the company. They will need this for carrying out monitoring of the performance of the Tesla electrical cars in the market, for the planning process, and communication. The management uses the dashboards to carry out monitoring where they measure the day to day performance by checking the metrics and making a decision on a corrective action. Through the use of the dashboard, the management will be able to ensure that the consistency by aligning measures and measurement procedures on all business units. The dashboard helps the management communicate the performance and values of an organization to the relevant stakeholders such as the shareholder (Velcu & Yigitbasioglu, p. 42). The suppliers of Tesla find it useful to have the dashboard for the company as it helps them determine their bargaining power with regard to the nature of goods that they supply for the company. Tesla requires different supplies from different supplies to maintain their production. It is noted that for the Tesla Model S, 33 suppliers were required. The suppliers use the dashboards to determine the performance of the company and assess the importance of their production to the production process. This helps them in setting of prices in accordance to their own interests. Benefits of using a Dashboard Dashboards provide visual display of the most important information required to help achieve one or more objectives. The dashboards allows for the consolidation and arrangement of information on a single to allow the viewing of the information on a single glance. The importance of visual information is considered in cognitive psychology where they help the decision maker easily identify a pattern and any relationship that may exist between the variables presented (Presthus & Canales, p. 2). The dashboards are also known to aid in processes of decision-making and decision-rationalizing, communication, and self-monitoring. In decision making and decision-rationalizing, dashboards presents an opportunity to the managers to extract summarized relevant information that helps them form a foundation for their decisions as well explain their rationality of the decision to the top management. The self-monitoring, communication benefits are achieved by using the dashboard’s feature of presenting the status of the work in process. This clearly helps the engaged employees to identify their roles and responsibilities as the process owners to whom the process relies on. Integration of the dashboards with enterprise systems help the various stakeholders to visualize similar the same information. In essence dashboards helps: , the different users are presented with an opportunity to monitor their performance, coordinates the activities of different managers across the production process, is an indication of the vertical communication of performance within an organization (Velcu & Yigitbasioglu, p. 44). Relation to Tesla’s KPIs Using KPIs and integrating them into a dashboard helps gather, categorize, organize and visualize the information of the company’s most relevant metrics. This presents an opportunity to create a quick overview on the performance and expected growth of the business. This helps organizations access their success indicators in real-time and therefore make informed decisions that will put the organization on a path for attaining long-term goals. Most companies concentrates on the KPIs such as revenue growth rate, net profit, project schedule variance and customer lifetime value. By highlighting the key performance indicators, it easy to identify the major problems related to the performance of the company and take collective action. The use of dashboard to indicate the progress of Tesla Motors will be important. The company was indicated to have experienced a growth of approximately 1700% since 2011. The dashboard will be very useful in presenting the progress of the company (Kazmierczak, p. 1). it had been noted that the company had gone for years without recording any profit. In this case, use of dashboard would help to present the relevant information to the stakeholders such as suppliers, customers and stakeholders of the sustainability of the organization. One the key performance indicator for Tesla motors in the cash flow acquired from core operations. The dashboard would be essential in presenting the trend in the changes of the cash flow. In this connection, experienced a drastic change in the last quarter of 2015 where it hit the positive mark, having been on the negative side. This is an important move that indicates the increased efficiency in the operations. Another KPI that Tesla can use in their dashboard is the comparison of sales of large luxury vehicles in the United States between different models. In 2015, in relation to models such as Audi, BMW, Jaguar, Lexus, Mercedes Benz and Porsche, only Tesla Model S recorded an increase in the sales. The analysis indicates a positive change by 51.01% while all the other had a negative change. This is a sign of gaining grounds on the market share (Tesla Motors, p. 1). Opportunities Tesla Company can use the KPI to sell out the unique opportunities open to them. In the wake of the increased concerns on climate change and emissions from fuel-powered cars, Tesla is endowed with an opportunity due to the nature of their product. The Tesla’s electric vehicles are seen have zero emission. The dashboard can present this zero emission in comparison to other models thereby giving a vivid visual impression. Tesla Motor also enjoys the opportunity of having a low cost battery pack thereby allowing the products to be sold at a reasonable price. It also crucial to identify that Tesla is endowed with many patents on the technology of producing cars with zeros emission yet high performing and full of aesthetics. Data to be used in a Dashboard Internal data In preparing and presenting the dashboard, Tesla Motors will require internal data that can be acquired from the business process manual as well as financial statements such as form 10K. Some of the data that may be required include data on business which indicated the nature of products that the company deals with and some quick figures such as customers, distribution over the globe, the annual production rate, and the number of customer reservations. It will also be important to acquire data related to risk factors facing the company. Tesla Motors indicates the following as their main risk factors; ability to maintain sustainable production levels for the models, reliance on single source suppliers, escalating manufacturing costs of Model S, and dependence of long-term success on the acceptability of the new vehicles in the market (Tesla Motors, p. 27). Such data will be necessary in preparation of the dashboard to offer a visual representation of the factors that may be obstructing the company from attaining its goals. The other important internal data is the financial information. The financial performance is one of the importance measures that most stakeholders review. The data that will be reviewed include sales revenue, key cost centers, and the profitability. The data will be compared to previous period (quarter or annual) to determine the change. other type of internal data that may be required include manufacturing costs such as parts, material and labor, manufacturing overhead and the research and development expense. It will also be important to have data on the growth of the company’s assets (Tesla Motors, p. 6). External data There will be need to acquire external data on market information about the trading of the common stock on the NASDAQ Global Select Market. Tesla began trading on June 2010. To visualize the performance of Tesla on the stocks market, it will be important to acquire data about eh high and low closing sales price for the stock as indicated on The NASDAQ Global Select Market. From this source, a stock performance graph can be acquired comparing the performance of Tesla’s common stock against the industry index. The external data will also be needed for other competing manufacturers in the auto industry. This will be important to measure the performance of Tesla vis-à-vis other motor vehicle manufacturers. The comparison of sales volume is necessary in determining the changes and distribution of market share. External information will be required with regard to value chain. Tesla operates a value chain that is different from conventional producers. The value chain by Tesla maintains a pyramid relationship between supplier and OEM. Data of regulatory requirements will also be required to indicate the compliance levels of Tesla to requirement such as emission level (Chen & Perez, p. 11). Challenges of implementing the Dashboard Data Quality related Issues Data quality relates to the quality of the information content displayed on the dashboard. The data quality issues may originate from application integration problems. Where such problems arises, the management may resolve to avoid using the dashboard and fall back to other tools. The quality of data relates to either the content of the data on format in which the data in produced by the information systems. Data is said to be of quality when it is complete, unambiguous, objective, meaningful and believable. Quality data need to adhere to currency principles requiring it to be up-to-date. Quality data should also be consistent, free for conflicts between tow data sets (p.7). Quantity Issue Business data analyses are necessary to report on the key quantitative indicators and generate multidimensional views on the business data. This reporting that is highlighted in the dashboard is made up of regularly triggered collection of prearranged queries. In this connection, there is a need to ensure that the data attains the accepted quantitative measures. The application of statistical methods and data mining requires data that is representative enough to give information that is dependable and reliable (Horakova n& Skalska, p. 51). The end users in most organizations are decision-makers who often carry out their operations under intense pressure to attain several objectives. The intense pressure in most cases makes the managers adopt the sources of information that offer better accessibility to information. The end users also have profound perception which they use to evaluate the usefulness of the data presented in the dashboard. Business intelligence Lifecycle Business intelligence lifecycle has six stages. The first stage is related to justification of the process. This involves business case assessment where the needs and opportunities of an organization are identified and proposal for the solution offered and justified as per costs and benefits. Stage two involves the planning process where the enterprise infrastructure is evaluated. Here he estimates and values of an organization to sustain the intelligence process are determined. This is followed by project planning of how the each step will be carried out, the test to be done and expected reports. Stage three entails business analysis where the business needs are outlined by the executive and managers. The data analysis is key in identifying the required data sources and designing the diagrams for logical models. This then helps in making the application prototyping. This stage is completed with a metadata analysis. The next stage entail system design where data is designed, the processes to extract, transform and load data are developed. It also involves the design of metadata repository to come up with a pre-defined solution for the metadata. The fifth stage is on development; this involves coming up with filtering tools, procedures and operators. The application is then developed which is the used to carry out the data mining. The final stage is the implementation stage where system is used to generate required reports (Bara, p. 103). Works Cited Read More