In business as in sport, gaining a competitive edge can be the difference between success and failure. Business intelligence promises to turn data into business advantage but getting there isn’t easy.
Ian Campbell talks to industry insiders about the obstacles to negotiate and Napier Williams sees how one of football’s biggest names uses IT to support its strategy.
Business is a bit like football. The only way you are going to get anywhere near the goal is by keeping your eye on the ball and controlling every move. And just as a football brain is the great differentiator in the beautiful game, business intelligence (BI) is now perceived as one of the best ways to help achieve sustainable growth.
The basic principles behind BI are about extracting data in timely and accessible reports that will help meet internal and external requirements. Ultimately, it should inform the business, empowering its leaders to make better decisions. Such high aspirations begin in the bowels of the data warehouse, where ‘bad data in, bad data out’ is the No 1 commandment. Data must be cleansed and extracted into a central store from where front-end BI tools and performance management applications can pull up reports as and when they are required.
“The whole reason for the existence of BI is technical limitations,” points out Alys Woodward, analytics analyst at IDC. “If it was easy to get information out of systems then you wouldn’t need it. Data warehouses are structured to optimise transactions; they’re not structured to optimise reporting. The problem is compounded when you are dealing with the multiple systems that most organisations have.”
According to IDC, businesses are still on the journey towards an end-to-end BI platform with only a handful of global companies having realised its full potential. There are growing pockets of maturity in different sectors but it is hard to generalise. “The telcos have made good progress on the customer relationship side, monitoring churn and segmenting customers,” says Woodward, “but the operational side is probably a decade behind. So when you say a sector is mature it doesn’t tell the whole story.”
There is no doubt, however, that there is a real buzz around BI. For evidence look no further than the spate of acquisitions that has seen Oracle buy Hyperion, SAP acquire Business Objects and IBM take over Cognos. And when Microsoft steps up its presence in a software sector you know a land grab is happening. It has had the tools for a number of years and has been quietly beefing them up.
As a consequence of all this activity and growing customer demand, IDC predicts that a sector that is currently valued at €4bn will be worth €7bn by 2011. Vendors on the frontline have certainly noticed the change. “It has been quite astounding over the past five years how it has suddenly come to the fore,” says Allan Russell, senior vice-president of strategy at SAS, one of the few remaining analytics companies to retain its independence. “Up until 2000 if we went and talked to someone about BI they looked at us as if we were from outer space – it was just seen as reporting. Then there was a realisation that the purpose of IT is not just to automate things but help run a better business.”
One reason why it has become so hot is because it appeals to the boardroom. “All messages about information play well at the top level,” says Woodward. Russell agrees and describes how this has influenced the way it is sold. “If you talk about data mining they will think you are geeks, but if you explain that it’s about decision making, where the endgame is about being better informed, then the feedback is good.”
The trouble is that there are many hurdles to overcome before the high-end business value is realised. BI can get bogged down in organisational cultures. “In many businesses, data is collected on spreadsheet models by different people using different definitions. It’s been happening for years and it makes the information difficult to share even if the desire is there,” says Woodward. Technology is inevitably called upon to make the data clean and usable. “It might not be dirty in the sense of inaccurate but there may be systems to integrate that have different conventions or that define fields in different ways,” she adds. Data cleansing becomes a never-ending challenge, according to Woodward. “If there is a new source of data, perhaps you are using HR for the first time, you should always assume that it’s dirty.”
In Allan Russell’s book, Information Revolution, he outlines the steps to BI maturity. At an early stage there has to be an acknowledgement that the data is in a mess and there is a need for software products to fix it. The next requirement is for people to run it. “In the Nineties the data warehouse was IT led but IT initiatives on their own don’t work so chaos ensued. You need to develop BI competency centres that understand the business need,” he says. “Data doesn’t belong to a department, it belongs to the enterprise. There is a lot of education required and big culture change.”
Russell talks about an “industrialisation of processes” that will help govern BI across the entire enterprise. This wider view is precisely what has been lacking in the past. But he warns that there is more to BI than technical integration. The endgame should be about BI informing decisions across everything from launching products to where to open a new office. The problem is that too many organisations still don’t know what questions to ask and why. “Many of them still have a poor grasp of exactly what they need to know to make decisions,” says Russell. “I’ve seen organisations making decisions for marketing campaigns that were incompatible with levels of bad credit that were showing up in the business. The decision making is going on, but it isn’t lined up.”
As ever, technology can only do so much.
How Milan meets its goals with technology
Seven times European Cup winners, 14 times Serie A league champions, AC Milan prove that success doesn’t happen by chance. One of the world’s best-known football clubs may not be an obvious candidate for or user of business intelligence (BI) until you realise its raison d’etre is to be the best in extremely competitive situations. As Jean Pierre Meersseman, medical and scientific co-ordinator, puts it, the club’s core business is to achieve the optimum performance of their players on the pitch.
In 2002 AC Milan established the MilanLab high-tech centre at the club’s Milanello training ground, with the specific purpose of ensuring that players were kept in optimum condition. What is different about the approach used is the regular and detailed monitoring of the players’ welfare covering mental, biochemical and structural areas. This information is used to predict possible areas of risk and then to adjust the training to minimise this eventuality and the likelihood of trauma injuries that are the main cause of underperformance. These practices, combined with a vast amount of historical data, enables the club to strike the fine balance required across many fields including medical, strength, management and coaching.
This system requires IT excellence to ensure that it accurately portrays the state of all of the players in a secure environment that can be accessed securely from any location around the world. The club has just signed a three-year partnership with Microsoft which sees the software company supply the latest versions of its Windows and SQL Servers and Office and SharePoint systems to support communication and collaboration, as well as PerformancePoint to support the BI infrastructure.
Enrico Bonatti, Microsoft Italy’s director of the information worker business group, explains that the system is player focused rather than team focused. All the details and results are entered for individuals and analysed to ensure that optimum performance is maintained. All the data for each player is individually stored; there is no key performance indicator (KPI) for the team, every KPI is for each member of the team. It is this attention to detail, combined with historical information and analysis, that has enabled Milan to keep its top players playing for longer – captain Paolo Maldini is 39 and still a regular in the team. The system also saves money, as the club can minimise financial outlay on transfers by keeping its stars for longer.
The player information is summarised onto a colour-coded scorecard that enables performance attributes to be easily assimilated and allows the management and coaching team to drill down to get details behind the scorecard summaries. The system enables this to be achieved from any location using mobile devices such as smart phones. MilanLab also has a videoconferencing centre that enables the club’s management expertise to be made available at any location. Perhaps the final comment should go to Bonatti who says: “This is the first time somebody has thought about the human body as a machine, the most complex one, and to manage it in a really disciplined way.”
By Napier Williams
This article appears in the latest edition of Knowledge Ireland, the bi-monthly information and strategy magazine, which is in shops now.
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