Why Companies Need Business Intelligence

Author: Jose Allan Tan

Photo: 4.bp.blogspot.com

"We need information but all we have is data!"

This is the message managers often complain about. If there is anything that IT has ever done right it is the ability to collect nearly every single bit of data imaginable -- from data that is written or keyed-in to a computing device, to images like signatures and X-rays. We even record voice and video these days.

One manager told me over coffee: "I've got data coming out of my ears. I don't know how to make sense of it!"

Part-time solutions have been around for many years. I say "part-time" because the solutions solve only "part of the problem, part of the time." Product marketers have labeled these as business intelligence (BI) tools.

Wikipedia defines business intelligence as applications and technologies which are used to gather, provide access to, and analyze data and information about their company operations.

The goal of BI tools is to allow anyone using the information provided to make better business decisions. But there are a few problems with traditional BI tools.

BI is mostly associated with report delivery. Usually there are few people within an organization who actually know how to use BI tools. These users hold on to this 'control' because they probably get a kick out of the power they have over others.

More importantly, such specialty creates job security. But the net effect has been dissatisfaction with what was purchased, and concern over making further investments in the future.

BI tools' failure rests in the business unit's failure to communicate their needs and IT's failure to ask the right questions. The result is solutions that fail to deliver expectations.

"Previous perceptions of BI didn't factor the value provided in managing and making sense of the information assets contained within every enterprise," says V.R. Srivatsan, vice president of Asia South for Business Objects.

"However, this is changing as both technology and the business will with which to use it are maturing resulting in BI becoming a key business process driver within today's enterprise," Srivatsan adds.



BI wish list

Suganthi Shivkumar, managing director for ASEAN & India at Hyperion Solutions, notes that business managers want tools that give them increased insight into the dynamic nature of the global marketplace and allow them to identify areas of profitability.

They expect IT to unlock information that is potentially trapped between silos of applications scattered throughout the enterprise.

"Today's regulatory institutions and business climate are very unforgiving towards any kind of expectation variances or financial discrepancies that may be construed as malfeasance or misconduct. This forces companies to put a lot of rigor in their planning and reporting processes. To produce reports with confidence is critical in the choice of BI tools," Shivkumar says.

Having a single version of the truth is also just as important. Finally organizations want to have clear visibility of their operations including accurate demand-revenue-expenses forecasts to better deploy resources and capitalize on opportunities.

Business intelligence has emerged as a strategic initiative and investment priority for companies. But because departmental objectives vary, it would be easy to lose sight of the core objectives of the company and to deploy BI tools (sometimes from different vendors) to satisfy those needs.

The net result of such a strategy is a proliferation of disparate systems that not only do not effectively inter-operate with each other but complicate the matters.

The good news is that despite all the not-so-glorious past of BI tools, CEOs still believe that BI tools play an important role in today's competitive environment.

Global competitive pressures, and mergers and acquisitions are putting constant pressures on restructuring and finding additional sources of profitability. CEOs want insight to help them steer the business through these turbulent times.

For decades companies have been spending millions on enterprise resource planning (ERP), customer resource management (CRM) and data warehousing (DW) tools. With so much information locked in repositories, CEOs are putting pressure on IT to unlock information trapped in those systems.

After Enron, it's no longer enough to produce reports on time. Accuracy and consistency of reporting have become paramount and discrepancies can mean jail time for even the rich and powerful.



Who is responsible?

Changing the way things get done

Business intelligence has emerged as a top strategic initiative and investment priority for CEOs, but not surprisingly department objectives vary. Having learned from the past, IT is working to standardize on the type of tools it will deploy across the organization.

Users from across the business, not just managers, want quality information on demand, and are no longer willing to wait for IT to serve it. They also want the flexibility and ease of use in engaging tools that they are familiar with (the nearly ubiquitous use of Microsoft Office). And they want their information delivered consistently.

Business users need tools and solutions which not only can deliver information, but can manage information and produce information by integrating with their current systems. Finally they need to be able to tie operational information to financial information.



Minimizing the risk of failure

Business author and management expert Peter Drucker said there is nothing worse than doing the wrong thing well. Why does this happen? Because people don't understand the company plan or have visibility into how the business is performing.

It happens because people are not accountable for their part of the strategy, or can?t rely on their information to make good decisions.

One of the greatest failings of BI has been in how it gets deployed. Intelligence demand often starts out at a specific department where the scope is tactical and thus deployment is departmental in scope.

The result is a proliferation of tools serving the unique needs of specific departments. Unfortunately, the lack of consistent visibility across the enterprise means that these tools will have limited impact and may not even be aligned with the corporate objectives.

Have you read through a BI tool manual lately? You will notice that it isn't designed to be used by a layman? Many of today's BI tools are used by so-called power users who act as gatekeepers of the information. The result is BI tools do not get widespread adoption.

"BI tools must not be limited to those within an organization based on technical skills or of a certain department. To maximize the adoption of the BI tools within the organization, all employees should be given access to the information they need to make business decisions," advises Shivkumar.

BI is no longer just about the report, but what's IN the report. Just as business dynamics are constantly changing, BI tools must evolve from a report-centric to information-centric approach that delivers "actionable" insight.

Therefore, it needs to be universally recognized within the organization that BI supports improving performance. BI is a tool that is able to deal with the past, present and future and is the power to provide insight that leads to true competitive differentiation.

The only way to maximize the value of BI is to focus on the total picture -- information management, production and delivery that ensures consistent information, and the ability for users to analyze and re-purpose data.

Only then can a standard be identified and adopted across the entire enterprise.

Peep at the future

The current software trend is that of Software as a Service (SaaS) and BI tools are not immune to this trend. In addition, search and web collaboration are functionalities embedded in what vendors are calling the Business Intelligence 2.0 revolution.

Srivatsan cites the example of an emergency room doctor who could use search within BI to scour a broad set of data sources to find out how many instances of food poisoning have been reported in the past 24 hours, where people are affected, and determine common causes.

This real-time access to trustworthy data could help medical professionals spot and prevent widespread outbreak of food-related illnesses.

Companies can also look forward to more collaborative BI such as instant messenger BI where a sales team could have an IM discussion over a dashboard that shows sales performance below objectives, thereby speeding the process for establishing the next steps for addressing the situation.

Imagine being able to call upon BI tools to provide analysis of data as it comes in. This is, after all, what business managers want -- the ability to analyze and perform "what if" scenarios with data as it comes in from the field. No waiting for periods to close. What you have is the ability to make decisions at the right time, right place and in the right context.


Final advice

Gartner's vice president for research, Andreas Bitterer believes that business intelligence needs to be a continuous process for it to be of value. So stop thinking of it as a project.

Srivatsan: "Few organizations have a comprehensive enterprise BI strategy or clearly defined BI standards. Companies with a patchwork of disparate BI technologies are facing the consequences, including, rising deployment, maintenance and training costs, inconsistent information, and frustrated employees who cannot get timely answers to business questions.

By reducing the number of BI tools, companies can save money, have confidence in and control over business data, and give employees the information they need to do their jobs well, he adds.
Article Source: http://www.articlesbase.com/information-technology-articles/why-companies-need-business-intelligence-320561.html

About the Author

Jose Allan Tan is a technologist-market observer based in Asia. A former marketing director for a storage vendor, he is today director of web strategy and content director for Questex Asia Ltd. He also served as senior industry analyst for Dataquest/Gartner and was at one time an account director for a regional PR agency.
   

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