Does business intelligence actually enable businesses to make faster decisions? Napier Williams investigates.
Business intelligence (BI) has recently been touted by all and sundry as the latest management tool that will enable organisations to survive and prosper in an increasingly competitive world.
Two leading industry commentators have said BI allows practitioners to make better decisions faster. Some vendors, such as the SAS Institute, have been involved with BI for thirty years while others such as Microsoft have only recently jumped on the bandwagon.
One of the key indicators that a technology, or more correctly in this case a technique, has entered the mainstream is the flurry of major acquistitions in the sector and this is reflected in the BI space by companies like IBM, SAP, Oracle, HP and Microsoft. However, as these companies maintained that their software products were already BI-enabled, it begs the question why these acquisitions were necessary in the first place, according to Michael Kearney, country manager for SAS.
Essentially, BI is about the extraction of useful information from data to enable decision-makers to make more informed choices rather than depending on ‘gut instinct’ to arrive at the most appropriate strategy. Richard Moore, Microsoft’s business manager for the information worker products group, says that BI can operate at three different levels -individual, team and enterprise.
Until Microsoft’s recent acquisition of ProClarity, the company’s BI tools were based around SQL Server 2005 integrated with 2007 Microsoft Office system. The acquisition of ProClarity, which has been launched as Performance PointServer 2007, enables the company to compete in the enterprise space. Moore says the broad range of integrated products available from Microsoft makes BI available to a large number of potential users at an affordable price.
Microsoft has had considerable success with its BI tool sets in many markets including Ireland. Two of Microsoft’s better known successes are Meteor and Gowan Motors, the motor distributors. Moore sees scope for BI across many market segments with a need for greater visibility of the measurable performance of individuals and teams through use of products like the performance dashboards. Moore adds that organisations seeking to use BI techniques should pick a small number of projects where performance and quality can be measured to ascertain the strategic benefits to the organisation.
According to Kearney, BI is about processes and people and goes beyond the traditional reporting structures built into many other IT-based systems. He says ERP systems have been done and any organisation that needs ERP already has it. Now organisations must look beyond ERP to maintain strategic advantage. BI is seen as a natural follow on to ERP due to the vast amount of data generated by ERP systems.
Kearney likens the absence of a BI system to a brainless but very fit athlete. BI enables insights into the vast banks of information that in many cases already exist in organisations. BI encompasses many techniques such as analytics, causality, optimisation, propensity modelling and text mining.
Kearney’s starting point for BI is to establish what questions need to be answered to improve the strategic position of the organisation or department and enable it to compete more effectively. In addition to being a tools provider, SAS is a solutions provider that expends much of its effort ensuring data is properly managed and ‘cleaned’.
Like any data-based activity, GIGO (Garbage In Garbage Out) rules the roost. Kearney observes that the cost of a BI system is typically about 10pc of an ERP system and the ROI is very much better for BI.
The BI projects which SAS have undertaken for Marks & Spencer and Tesco supermarket chains involve huge amounts of data. Tesco have 13 to 14 million customers with loyalty cards which track individual customers’ purchases with the results used to predict optimum product stocking and placement and to send out individualised special offers to each of the customers. Another major application area is risk profiling, which is used by the telcos and by financial institutions for credit scoring.
Kearney comments on the recent surge for BI, pointing out that now ERP has for the most part been completed, BI is the next logical step. Also, powerful desktop computers are now cheap and storage capacity is readily available.
This convolution of circumstances, combined with vast swathes of data, is pushing BI to the forefront. Moore believes the changing economic environment, combined with increased competitive pressure, is placing a greater emphasis on the importance of strategy and the BI tools are now readily available to fill this space.
Skill + intelligence + insight = top performance
AC Milan, arguably the best-known football club in Europe, if not the world, may not be an obvious candidate or user for business intelligence (BI), until you realise their raison d’etre is to be the best in extremely competitive situations.
The club’s core business is to achieve the optimum performance of their players on the pitch. In 2002, AC Milan established Milan Lab.
What is different about the approach used at the lab is the regular and detailed monitoring of the players welfare, covering mental, biochemical and structural areas. This information is then utilised to predict possible areas of risk and training is then adjusted to minimise this eventuality and the likelihood of trauma injuries.
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.
The system requires that the state of all of the players is accessible, in a very secure way, from any location round the world. Today, this is achieved through a three-year partnership with Microsoft, which has supplied the latest versions of its products to support communication and collaboration and PerformancePoint to support the BI infrastructure.
The system is player-focused rather than team-focused with all the details and results being entered for individuals and analysed to ensure optimum performance is maintained.
It is this attention to detail combined with historical information and analysis that has enabled AC Milan to outperform its competitors and to keep its top players playing for longer, thus saving financial outlay on transfers.
The player information is summarised onto a colour-coded scorecard that enables performance attributes to be easily assimilated and allows drill down into the summaries to get the details behind the scorecard summaries.
By Napier Williams