Dermot Corrigan

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Business Gets Clever

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Sunday Business Post – Computers in Business Magazine – Nov 05, 2006

The roll-out of business intelligence (BI) has the potential to make far-reaching changes throughout all businesses and organisations, with data management being just the very beginning of what it can do.

“Put very simply, business intelligence gives you the information when you need it, in the form that you need,” said Michael Kearney, recently appointed country manager with SAS Ireland. “What organisations are trying to do when they invest in BI is to improve their decision-making capability.”

A major reason why business intelligence is appearing on more and more radar screens now is the explosion in the quantity and complexity of data that people at all levels within organisations have access to.

“The reason you have to look at BI now more than ever is the sheer vastness of the amount of data that is out there. Data is basically doubling in volume every 18 months, or even less, and it has just gone beyond human capabilities to look for trends and nuggets of information in that volume of data,” said Kearney.

“The challenge is to integrate data from multiple sources and allow the business to deliver self-service reports and business analysis.”

BI tools are fundamentally about using data which an organisation already has – whether in databases, CRM systems, financial and accounting packages, ERP systems or elsewhere – and being able to organise this data in such away that decision-makers, at all levels of an organisation, are empowered and informed with useful knowledge which can be used to make decisions all across an organisation.

“The information which you get out could have a dramatic effect on the business.

“For example, you may understand your cost base better, or your customer base. You may understand how to cross-sell and up-sell better. You may understand your risk exposure better. Based on that information, managers are then in much better positions to make business decisions,” said Kearney.

One of the most pervasive and basic BI tools on the market today is found in almost every office in the country.

“Excel is absolutely the key base platform that many people will use to provide business intelligence in their companies,” said Richard Moore, business group manager, server and tools, with Microsoft Ireland.

“If you think about the number of people who use it for ad hoc reports, analysis, decision-making, presentation purposes – it is a focal point for a lot of first use of BI in organisations.’’ According to Moore, Microsoft has targeted BI as a huge potential growth area, and they are quickly moving to become major players in the BI space.

In April 2006 Microsoft acquired leading US BI concern ProClarity, gaining access to their market leading advanced analytic and visualisation technologies, which will feature heavily in the new MS Office 2007 release.

“The 2007 Office will feature a new product called Office Performance Point, which basically gives you, in one place, the ability to do graphical analytical overviews of any particular business issue that you want to monitor,” said Moore.

“So if you want to do business score cards you can, if you want to do visualisation of data to really understand under the hood what is going on, you can. The smart thing about this is that you can view the output in Excel, you can view the output on a webpage or you can create a point of integration so that other applications can get that output and present it using other tools as well.”

SAS and Microsoft, of course, are only two of a large number of organisations who are moving quickly to colonise the BI space. On the international stage these include SAP, Business Objects, Cognos and Oracle. Indigenous Irish IT service providers such as Datapac and Sage also offer BI packages.

According to John Caulfield, solutions director with Oracle Ireland, Irish organisations are looking at BI solutions as the logical next step in the development of their internal data-management systems.

“People find that when they implement an ERP system they have far more information and data about their business than they had before. They are now beginning to move from a focus on efficiency, to trying to get insight and visibility into the information that they have,” he said.

While businesses have generally been running a number of fragmented applications which can be loosely termed BI, they are now looking for a joined-up package.

“People have been doing ad hoc BI implementation over the last number of years. Buying a standalone report writer, putting it over a silo data storage system, being able to get reports,” said Caulfield.

“What we are seeing people beginning to ask now is how to build BI into our applications in the first place.

“How do we effectively make it pervasive so that we have not just analysts using the information but any user throughout the system? How do we start using that information then to give us an insight-driven business, rather than just the historic information reporting?”

A BI solution will usually include a ‘data-warehousing’ capability, where all the data which an organisation has collected and gathered in different places can be gathered together, organised and structured. This immediately poses a challenge as data taken from disparate sources will not always be readily compatible and capable of being sorted into reliable categories which are useful and consistent.

Integration is therefore an important challenge in any BI implementation.

“You have to make sure that if the customer is John Caulfield, you have the same John Caulfield throughout all three applications, or that John Caulfield isn’t J Caulfield in one system, John Caulfield in another and Mr Caulfield in a third,” said John Caulfield.

This requires a certain amount of planning within your organisation. All departments must agree on a set of criteria that will work right across the different areas of your business. This includes clearly defining what you mean by all business terms and processes.

“When you are taking data from the multiple systems into a data warehouse it is a matter of applying rules. Users can define their own rules and policies that will check for duplicates, that will check that the information is consistent,” said Caulfield. It is also important for all stakeholders within the business to sit down and work out in advance what it wants its new BI tools to do.

As with any investment in information technology, the organisations that get the best return are those who set out clear objectives before embarking on the project.

“If a company doesn’t know what its key performance indicators are, what its goals are, what it needs to measure, to drive their business at any level or at every level, then they will never get a return on any investment in BI, whether its an investment in the process, or in technology,” said Jayne McCormac, director of management information systems with Sage.

Once a BI tool has collated and organised the data into useful categories, it can then produce reports which give managers and decision-makers easy access to key trends and indicators in all areas of their business. A huge variety of different reports can be ordered and delivered, depending on what the end-user wants to discover. Different users at different levels across an organisation can access information that is directly related to them.

“There are different types of BI tools and they would be aimed at different types of people. An analyst whose role is to really drill into the information and understand the drivers that are driving the business might use a more sophisticated tool than a person who is running an accounts payable department,” said Caulfield.

Correctly implemented, business intelligence allows information to trickle down efficiently through an organisation and reach those who need it most when they need it.

Where once a team leader or project manager would have to wait for a weekly operations meeting to see how a particular project or process was progressing, most BI systems allow users to go in and access information at any given moment to receive a snapshot of exactly how the project they are involved in is faring.

“What you typically see is that there is a much better understanding inside the company of the key issues and people are able to make decisions faster so processes that previously would have relied on a manual submission of a report once a week don’t need to wait anymore because people can run a report effectively in real time,” said Moore.

This allows any kinks or problems to be highlighted at an earlier stage. This freer access to information can also lead to the development of interesting new relationships and synergies between different arms of an organisation, who previously would rarely have come into contact.

“It is easier for people to find out what is going on without having to depend on a third party to give them access to information. We have seen that if you are running a marketing campaign, or looking at the performance of a business unit, you start to see issues and comparisons across different products and business units that you wouldn’t have seen before, simply because it would have been too cumbersome to get that kind of information,” said Moore.

As well as providing decision-makers with the information they need to make quick, informed decisions as part of their daily work schedule, BI reports are also used at a strategic planning level within organisations.

“It gives a very rich comprehensive ability to probe and try and understand why is something happening the way it is,” said Moore. “This can help you then to make decisions because you can look at patterns in the data. It is also very powerful to help you understand why is the data looking that way? To understand the why, you often have to drill down separately into the data sources that built up that overall picture.”

Moore gives a simple example: “If you have a regional organisation or across Europe, you can compare how different countries are doing using the same format. You can see who is doing well and who is not doing well and you can use that to drive best practices and understand how things can be improved.”

The strategic planning potential of BI can be utilised in organisations of all sizes and within all sectors. “SMEs use business intelligence to look at business strategy, using it for competitive information, to build profiles of what is working, what is not working, what might work, so they are using the information more in a strategic way rather than just an operational way,” said Frank Corr, commercial director with Datapac Business Solutions.

The information gleaned from BI reports can also be shared with your business partners and the results can be mutually beneficial. This is particularly apparent at the SME level, where businesses must work closely with suppliers and customers.

“You can build a better relationship with the other stakeholders in the business by sharing information with them and making them a part of a wider community to help drive the business forward,” said Corr. “The biggest return that we have seen in terms of BI implementation is where you are sharing data between suppliers and customers, it helps them to hone their processes and better understand the relationship.

“If you can share data back to them about how the relationship is working or not working from your point of view, they can take that on board and modify their processes to better serve you.”

The reports generated by BI systems can be particularly useful for organisations operating in sectors where there is a responsibility on businesses to keep accurate and detailed records of all dealings and transactions.

“Monitoring internal controls and being able to prove to the stock exchange or the government that you are in compliance with the laws and regulations and best practices of the land are all progressively more important. “Auditing of information has quite a high reporting implication which BI can meet,” said Caulfield.

The latest BI tools tend towards a graphical, intuitive interface or dashboard, which is accessed via a web-based interface, and no technical expertise and minimal training is required for the end-user.

“The benefit of BI tools is that they provide a simple, almost familiar experience to the end-user,” said McCormac.

“There is no point in having something that looks almost mathematical in front of somebody who wants to look at some kind of trend analysis in terms of their customers’ payment.”

Google recently agreed to work closely with SAS in the development of their BI products. Google’s OneBox for Enterprise will be combined with SAS’s contextually relevant search capabilities to help users discover the information which they require. The search results will also suggest other information which is related to the search term entered. “I suppose ‘BI for the masses’ would be away of describing it,” said Kearney.

“For example, if you type in Q4 sales figures, it would also tell you what the top-selling products are, the top sales people, or perhaps the top customers for that period. It gives a lot of power and a lot of information to an individual through a very familiar and user-friendly front end.”

The different utilities and synergies around BI mean that BI tools now have the ability to impact on the daily routines of employees at all levels within an organisation. However, some observers argue that we have yet to see its potential fully realised.

“From a technology point of view the tools are getting better and more accessible so I would see more and more emphasis going into usability.

“We’ve got the web, we’ve got the scale, we’ve got the convergence of querying and reporting and into analytics. So everything is there, the final piece is to push that out so that users can utilise these tools at every level in an organisation,” said Corr.

“Going forward, business intelligence will be seamless.

“People will be using it to make fact-based decisions on a daily basis, hourly basis, and people won’t even realise they are using it,’’ said McCormac, who likens the impact that BI will have to that of e-mail and the internet.

“I think in three years time everybody will be sitting in front of a desktop and as well as having their financial application, mail client and internet they will have their business intelligence application open.

“Everyone who is touching any information will be using their business intelligence application to make the most basic of decisions,” she said.

http://archives.tcm.ie/businesspost/2006/11/05/story18638.asp

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Written by dermot

January 13th, 2007 at 8:07 pm

Posted in Business,Technology

2 Responses to 'Business Gets Clever'

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  1. Hi Dermot, I thought this was a very well written and thorough article. One trend that will be transformative in the BI market and will get a lot of attention in 2007 is the transition to software-as-a-service (SaaS) or “on demand”. At Salesforce we have seen many new and innovative partnerships that are built on or integrate with our Apex on-demand platform and are available on the AppExchange. I cover this on my blog: http://blogs.salesforce.com/analytics/

    dcunningham

    15 Jan 07 at 22:12

  2. Hi Darren,

    Cheers for leaving the comment. I will keep an eye on your site for any further pieces I’m working on in the area.

    Dermot

    19 Jan 07 at 18:23

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