How to score with business intelligence
Sport seldom fails to provide useful analogies for understanding those tricky areas where business processes and technology meet.
For business intelligence (BI), read football.
The league table will tell you the basics: games won and lost, points accumulated, goals for and against. But the real explanation for those results lies in the raw data in every match: tackles won, passes made or the distance covered by players.
Those details can make the difference between fighting for a league title and avoiding relegation. So it is with business. Sometimes an organisation needs more than just basic revenue figures or customer information to find out how it’s really performing or where it can improve. That’s where BI comes in.
BI has become a very crowded space in the past few years, with increasing numbers of vendors now offering some type of product. Companies that were in the accounts software market now claim their software can hook into BI systems or provide some level of reporting capability.
“For a lot of people, BI means analysis of data. We would see BI as being broader than that,” said John Coleman, managing director of ProStrategy-Colman. “It boils down to three essential questions: how am I doing, why is that so and what can I do about it? Very often, people will start with one of those areas,” he said.
One of the major recent trends in the market has been the move to simplify reports and alter their presentation depending on the intended audience. BI tools used to be most closely associated with dashboard-style interfaces, but now it’s common to present the data in spreadsheet format.
The trend behind that trend is that BI is moving away from being aimed exclusively at senior managers or specialised finance people. Now, the idea is to spread actionable data right across the company so that more people can make decisions based on accurate business information.
That information could be used to track trends in the business, or be interrogated further to find out who the most profitable customers are.
“Business intelligence is about disseminating information to the people that need it,” said John Farrelly, head of SAS Ireland. For the chief financial officer or financial controller that might be a spreadsheet. For the sales manager it could be some sales force automation showing the customer pipeline.”
How that information is presented will depend on who is looking for it. Current BI tools are highly configurable, so that the interfaces can be tailored to suit particular users, said Farrelly.
“Typically a good interface for finance people is a spreadsheet. The graphing capabilities in that are normally fine. From the chief executive’s perspective, that’s where you get into dashboards,” he said.
Fundamentally, BI provides a business with clarity in its operations. In the case of a distribution or manufacturing firm, that level of detail can go down to the individual product level, according to Coleman.
ABI tool can also help to identify a company’s customers with a high volume of business, so that the firm can decide to allocate more resources to serving that segment better.
“Understanding who your customers are is really important to how you are going to deal with them. Then you can really start to understand your customers and how they’re going to evolve over the lifetime of their business with you,” said Farrelly.
The nature of BI projects has also changed. Once, the words ‘business intelligence’ conjured up images of armies of consultants marching in to reception and digging in for a long campaign. Most commentators believe those days are over.
“The era of long BI projects is gone, and they didn’t work anyway. Companies need to have iterative, evolving processes,” said Barry MacMahon, business intelligence lead with Microsoft Ireland.
“Now, BI has to continually deliver benefits back to the business. It’s about small projects.”
Opinions differ on the time it takes to implement BI, which is understandable. Most agree that payback starts to happen quickly, simply because it has to.
According to MacMahon, a typical medium sized Irish company can implement BI within four to eight weeks.
Coleman’s experience tallied with this view. “It takes two to three months to put in a solution, on average. Once it’s there, and it’s designed properly, people start to see results more or less immediately,” he agreed.
More complexity can be introduced at later stages of a project, such as in large organisations that want to find out why their customers leave, said MacMahon. “That kind of churn analysis tends not to be done by many organisations,” he said.
At the beginning, it’s best not to over complicate matters. “You need in the first instance to standardise around a relatively small number of key measurements in the organisation, such as revenue, customer satisfaction, staff development or product quality in the manufacturing process,” said MacMahon. “Those measures will help you to judge your organisation in a balanced way.”
According to Coleman, larger companies are interested in the more advanced BI capabilities such as joined-up performance management, reporting, analytics and planning.
Smaller organisations shouldn’t be scared off, he said. “You have different levels of maturity in the market and small companies are starting to look at point solutions,” he said.
Price shouldn’t be an issue, Coleman added.
“We’ve seen companies that have just two or three users and maybe made a €15,000 to €20,000 investment,” he said.
The key to success is to ensure BI buy-in, according to Farrelly.
“The key, I believe, to getting it right is to understand who the consumers of the information are and what information they need in what format to make better decisions,” he said.
