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Business Intelligence: Addressing a need
With the emergence of relational databases and client/server technology, the early nineties saw a growing need for a new form of decision support system. Executives and Managers, instead of relying upon vast storehouses of data from which to collate useful information, could now make use of a new solution-that today defines the Business Intelligence (BI) industry. BI allows organizations to extract useful, actionable information from a rapidly growing inventory of disparate data sources, including multiple database platforms, packaged applications, data warehouses, data marts and e-business systems.
Which type of solution?
With the information gleaned from a BI solution, enterprise users are in theory, able to make better business decisions. In order to make 'better business decisions' however, a company must first recognise which BI solution will best fit its needs and how it should be implemented. Will for example, the existing BI solution inherent in their recently acquired CRM solution fulfil its requirements, or does the company have a more specialised need for a standalone BI solution? There are a number of factors that must be considered.
CEO of Business Objects, Bernard Lieutard states that: "Business Intelligence tools bundled with database software often do not have the capabilities a company may need. By purchasing stand-alone business intelligence tools, an organization is sure to get a more customized solution that is more beneficial to their needs". Perhaps his stance is understandably biased (given the nature of his company), but his assertion is generally valid. However, the problem with this approach is that the type of organisation that wishes to implement a BI solution has not been taken into account.
Does industry type make a difference?
Deciding upon which form of BI solution a company requires should not be made complicated. The industry within which your company operates will, to a large extent dictate what your BI requirements are.
For example, in the banking and insurance sector, companies tend to be very "close" to and comfortable with their data. Their preference therefore veers towards standalone BI solutions. Because they have the expertise to ascertain exactly what it is they require from a BI solution, the customisation, implementation and eventual usage of that solution should provide few hazards.
Many retail businesses have also had lengthy experiences with BI, especially through such things as product placement in stores. Guy Creese of the research company Aberdeen Group explains why the retail store industry would prefer the standalone BI option:"BI is really viewed as a strategic advantage to retailers. They don't want to wait for Oracle or another database company to add a certain tool when they can buy it from a smaller, cutting edge BI vendor".
IBM has geared its DB2 database toward this approach. Rather than trying to include everything in their database, they partner with other vendors for BI. " We feel it is the best solution to partner with manufacturers of the best tools around, rather than starting from scratch", said Jeff Jones, senior program manager for IBM's Data Management Solutions.
The other end of the spectrum includes companies that don't have the need for specific tools or simply don't have the expertise to fully employ them. Businesses in the manufacturing industry generally are more focused towards supply-chain management than on BI. Suites of solutions from database companies may therefore be a better choice for them.
Adding to the list of BI options are the application service providers (ASPs). ASPs offer the ability to drill down deep to analyse data for companies without the skills, time or ongoing need for BI. Many smaller organisations would certainly fit into this category with a monthly 'dose' of BI providing sufficient insight into their company's data.
Asking the right questions
It's now the BI crunch time for executives. With some idea of whether a 'packaged' or standalone BI solution is right for their particular company, a decision must be made upon implementing a solution that fulfils their requirements. Before doing this, it is perhaps necessary to take a step back and ask, "What exactly is it that my company wants from a BI solution?" It is not wise to take the moral high ground by pretending that relief of data analyst stress levels is a valid aim - the main objective is to achieve a return on investment.
Questions need to be answered. How much is a company willing to invest? Which employees will be using the solution? In what areas of the company do we require this type of solution? Will training be needed for the newly implemented solutions? These and many other issues need to be addressed in order that the right BI solution is implemented.
Finding the right solution
To reiterate, a company's area of speciality will, or anyway should, to a large extent determine which solution they implement. Failed implementations arise from not recognising this, as well as not addressing key issues such as the ones mentioned above. Because market trends and fashion often dominate technology development, there often isn't much to differentiate one BI solution from another in terms of being at the cutting edge. Additionally, there is the temptation to make the choice of a BI solution a forgone conclusion.
For example, a company that uses Oracle database software may opt for Oracle BI solutions because they have been satisfied with the company's products over the years. Remaining loyal to your previous supplier may well reap much reward but should be conducted with caution-should trust in the supplier override actual BI needs?
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Functionality, Price & ROI
Like most software, BI solutions tend to be differentiated through price and marketing efforts. Buyers will make sure the price falls within their budget before initially assessing the functionality of a potentially interesting BI solution and they will feel most comfortable with the market leaders within their price range. This approach can sometimes mitigate against finding the best solution for their particular needs.
However, functionality and price are two key issues. The correlation between them should help a company to decipher its precise BI requirements.
Unfortunately the following scenario too often occurs: A company decides that it wants to implement a well-known fully functional solution uniformly across its organisation. It sees this as best fulfilling its needs. Has it truly defined those needs though? Will all of the employees actually need and make use of such a solution? Twenty per cent of the workforce will probably have the technical know-how and requirement to fully utilise its impressive functionality. What of the other eighty percent? Having subjugated their needs, the executives may have given them a tool that: a) they don't know how to use, and b) have no need for. Because such solutions come at a fair price per desk, there is little chance of achieving a return on investment in the short term, if at all.
Tailoring the BI investment for a specific need
In a recent survey from DM Review, it became apparent that BI solutions are no longer limited to an elite group of executives, but are touching the entire hierarchy. Although executives (72 percent) and line management (72 percent) are the top users, clerical personnel are considered BI users in 52 percent of the companies. Forty-five percent of the companies now support more than one hundred users, with 25 percent supporting 750 or more. It is essential therefore that these companies tailor their BI investment in order to fulfil their employees' needs.
Choosing a BI solution with less functionality for the remaining 80 percent of the workforce seems a more strategically viable option. Let's be realistic, most users of Microsoft Word only use twenty per cent of its functionality, yet couldn't do without it due to a lack of available alternative. There are alternative BI solutions such as 'One-Up' from Farsight Technologies that can offer the user's functionality requirement but at a far cheaper price. The cost reductions are obvious and the chances of achieving an almost immediate return on investment are increased too.
What now?
Essentially, when companies choose a BI solution, whether it be a packaged or standalone solution, they should aim to address a need. Whether this is cost saving, time saving, more efficient data analysis or all of these, they must be cautious when selecting a BI solution. If the solution will save time, how is that time going to be spent? Similarly where will increased revenues from cost-savings now be directed? If these strategic issues are not addressed, then the implementation of a BI solution will be of minimal worth.
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