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Business Intelligence
Business Intelligence:
A Guide for Midsize Companies
IMPROVING YOUR COMPANY’S EFFICIENCY
AND EFFECTIVENESS, NO MATTER ITS SIZE
CONTENT
Michael A. Schiff
Michael A. Schiff is the founder and principal analyst of MAS Strategies. He has
over 30 years of experience in the information technology industry, providing
tactical market intelligence and analysis in areas such as data warehousing and
advanced decision support. Schiff earned his Bachelor and Master of Science
degrees from Sloan School of Management at Massachusetts Institute of Tech-
nology (MIT), where he specialized in operations research as an undergraduate
and in information systems as a graduate.
Executive Summary
Make Informed Decisions Across
Your Company
Furthermore, you need the ability to You realize that your company does not You were there when your company’s
determine where to concentrate your have the resources of a Fortune 500 first location was its founder’s garage.
efforts. You can’t check every detail, enterprise, but you believe that – man Now that your operations have gradu
yet you would like to be able to monitor for man and woman for woman – your ated from the garage to real offices,
your operations and focus on quickly company’s employees are more pas- isn’t it time your company’s analysis
finding and resolving potential problems sionate about their jobs and more com- capabilities graduated from spread-
while identifying and leveraging new mitted to its customers. Your company sheets to more powerful tools as well?
opportunities despite the current may be relatively small right now, but
uncertainty of the world economy. it’s on a planned growth path. You’ve This white paper from SAP offers guid-
You want to ensure that employee heard the term “business intelligence” ance on how to improve the efficiency
and departmental metrics are aligned and know that large companies – and and effectiveness of your company with
with your company’s strategic goals. maybe even your direct competitors – business intelligence.
are using it to obtain a competitive
advantage; however, your company’s
primary analysis tool is a spreadsheet.
The following scenarios represent typical • Difficult-to-use BI technology. Your • Inability to differentiate and prioritize
situations that indicate your company company’s sales manager used analy- problems. While all problems need to
could benefit from a business intelli- sis tools at her former job that she ultimately be addressed, you should
gence (BI) solution: insists be used in your company as be able to identify which ones need
well. Although your company has immediate attention. Oftentimes, you
• Multiple versions of the truth. Inter invested in several licenses, users can only identify projects that are
departmental meetings frequently that have tried to use these tools behind schedule or departments that
turn into shouting matches as parti have given up in frustration and rely are over budget after they are deeply
cipants argue about whose spread- exclusively on spreadsheets instead. in trouble.
sheet has the correct figures.
• No retention policy or practice for • No alignment of operations with
• Inability to perform in-depth analysis. historical values. The sales depart- strategic goals. Although your com-
Your company knows which of its ment is conducting account reviews pany has defined its strategic goals,
retail outlets have the greatest sales and wishes to compare each cus you are not sure if they are in tune
volume, but it doesn’t know which tomer’s sales to date this year with with its daily operations. Several
products have the highest sales by its sales to date at this time last year. managers have told you that while
season. Sales maintains a spreadsheet for they know how to optimize the work
this year’s results, but the person of their own departments, they would
• Inability to locate important informa- who maintained the spreadsheet last like to better understand how their
tion. Someone in accounting mentions year has left the company – and no efforts support the overall goals of
that a report showing year-over-year one has any idea what happened to the organization.
growth for each customer has been last year’s spreadsheet.
posted to the company’s intranet. • Inability to comply with government
However, no one can find it. • Limited operational flexibility due to reporting requirements. While your
weak or nonexistent BI technology. company is still relatively young, it
• Need for simple-to-use production- Your company has grown to the point hopes to one day go public – or at
reporting technology. Your accounting where its customer base has expand- least demonstrate compliance for
department uses a word processor ed to the hundreds. While it values any given future business scenario.
to generate customer invoices. Cus- every customer, it would like to iden- In your role as IT director, you want
tomers frequently complain about tify the top 10 in sales volume each to take steps now to provide proper
being invoiced twice for the same month and offer them extra attention audit trails and data lineage to ensure
purchase or shipment. and special incentives. that your CEO and CFO have con
fidence in the accuracy of business
data.
Much More Than Just Enterprise or production reporting then could drill down to view sales in
a Simple Query typically involves high-volume, high- each state or country in each region.
resolution reports that are run on a reg- By drilling down further, the user could
The BI spectrum is very broad in terms ular basis. An example might be a man- view the sales of each store within
of its tools and functionality. At its core ager’s report showing monthly sales and each state or country. It would also
are the traditional functions of query, associated sales commissions sorted be possible to see the sales of each
reporting, and analysis. This is comple- by salesperson and then by customer product in each store or the sales for
mented by data quality and data inte- or inventory status by product or ware- each salesperson for each product.
gration to accurately and consistently house. The report distribution would These advanced analysis functions
consolidate data from multiple sources. likely be controlled so that each sales make it easy to compare the results
Dashboards and other visualization or production manager could see only from one time period with another so
techniques help users quickly under- the entries for his or her sales force, that total sales of a product for this
stand analysis results, a critical com product, or warehouse location. It might month (or some other time period)
ponent of the BI solution spectrum. be e-mailed or viewed through a Web could be compared to the same month
browser. Enterprise reports can also be last year – while allowing the user to
Other tools include: used to generate statements or invoices drill down and perform year-over-year
• A search function to locate informa- for customers or individualized benefit comparisons at levels such as store,
tion and reports summaries for each of your employees. customer, or salesperson.
• Predictive analysis to discover hidden
patterns and enable what-if analysis Easy-to-Use Advanced Analytics Other advanced analysis functions,
• Scorecards and performance man- With advanced analysis functionality, such as filtering, can be used to include
agement to help monitor business users can view data across multiple or exclude specific stores, regions,
metrics and KPIs, such as customer classifications or dimensions (for exam- products, salespeople, or time periods
satisfaction, profitability, and sales per ple, product, customer, location, time in the analysis – and provide the ability
employee, in order to align individual period, salesperson, and so on) and to look at the top-25 or bottom-25 (or
and departmental metrics with the slice and dice the data to look at various any other number) or best- or worst-
organization’s strategic goals combinations, such as the sales in each performing products, stores, or sales-
region for December or the products people. The ability to look at results
Reporting Across the Enterprise each customer purchased last year. across several dimensions and easily
A simple query might access your Advanced analysis functionality also request the top or bottom performers –
company’s data to ask, for example, permits organizations to define hierar- when combined with drill-down, slice-
“What were total sales to customer chies so that, for example, a user could and-dice, and filtering functions – pro-
ABC Corporation last December?” view sales first for each region and vides powerful but easy-to-use analytics.
or “What’s the current salary of the
employee with employee number
157?” or even “How much of part Star Trac of Irvine, California, is interactive dashboards, and visual
123 do we have in inventory?” Most a midsize manufacturer of quality analytics. “Fast, easy business
query tools also provide simple report- physical-fitness equipment serving intelligence will save us time, boost
ing functionality and could, for example, a global market. Like many rapidly productivity, and deliver the data to
be used to generate a report listing growing companies, its data was help us grow the business,” says
the accrued vacation of all employees, spread across multiple silos – making Jeff Kuckenbaker, senior director
sorted and totaled by department. it difficult to aggregate and reconcile of information systems. “We’ll
data to facilitate better decision mak- use SAP BusinessObjects Edge
ing and align key objectives and busi- to deliver information across the
ness processes. Star Trac needed company, so everyone can better
a product suite that offered flexible understand how to execute our
reporting, ad hoc query and analysis, strategies for growth.”
Beginning a BI initiative is not necessar- the benefits of BI, usage is likely to After using BI for operational purposes,
ily expensive, especially if you choose spread quickly throughout the organiza- organizations likely want to use it for
a vendor with a suite of products that tion. Using commercial BI tools does deeper analysis, often requiring the
allow you to easily start with your initial not mean that your organization has comparison of one period’s results
BI needs and expand your BI usage, to abandon spreadsheets. Instead, IT against another period’s results. This
implementing the tools you need as needs to establish procedures for proper is facilitated by the use of a data ware-
your business continues to grow and distribution and control and acquire BI house that contains historical data
expand. tools that can interface with them. values – thus making time-period com-
parisons possible. A data warehouse
Make Business Users Self- usually contains data from many sourc-
Sufficient BI Consumers Facilitate Analysis with es, and data integration software pro-
a Data Warehouse vides the enabling technology for load-
As your company transitions from ing the warehouse, while data-quality
an undisciplined spreadsheet environ- At any point in time there are a range software helps ensure that the consoli-
ment, it often makes sense to start of users for BI, from novice to expert. dated data is both accurate and consis-
small – perhaps deploying BI against The IT department can set up and tent. Many organizations have attempted
one business application with a query enforce policies as to who can access to build data warehouses that, for all
and reporting tool. Your company can what reports and who can create their practical purposes, were data dumps;
expand its BI deployment to additional own reports. If your organization is the use of data-quality software would
applications and use additional func- using a commercial software package, have prevented this. One of the oldest
tionality as the organization quickly popular BI tools may have been bundled IT adages is “garbage in, garbage out,”
masters the technology. One place to with it, and your organization may already and this applies to both data warehouses
start is with the application that has the have experience using these tools. and operational systems.
greatest reports backlog. While the IT
department can certainly use BI tools
to reduce this backlog, the ultimate FreshDirect, an online grocery how they affected the business, and
goal should be to make your business delivery company, first used SAP® even identify the products that were
users self-sufficient and less depen- BusinessObjects™ Edge software to either negatively affecting customer
dent on IT for their analyses. gain insight into customer complaints loyalty or bringing them back for
and feedback to identify key issues more. Armed with such insights, exec-
IT can assist business users by using across their value chain, understand utives were able to look at processes
the “guided analysis” functions of their trending, and evaluate how within the plant where they had issues
some BI tools to create parameter- these issues affected the business. – whether at the picking operation or
driven reports with user-selected filter- With SAP BusinessObjects Edge, on the assembly line – and proactively
ing criteria that business users can use the customer feedback report address them. As a result, FreshDirect
to perform their own customized analy- became a gold mine of information. was able to improve product and
ses. As users gain experience, some Using information from the report, shipment quality and save significantly
of them generate their own reports and FreshDirect was able to dig into on discounts provided to customers
contribute to a corporate report library. customer data product-by-product, to compensate for a packaging or
It’s up to each company to determine recognize trends and understand delivery problem.
the approach that works best for it. In
general, as an organization discovers
When selecting a business intelligence • The ability to access and integrate privacy that’s simply not possible
product, it’s important to consider other a wide variety of disparate data in a spreadsheet-only environment.
factors in addition to specific product sources. Although many companies Your data is an organizational asset
features – such as ease of use, ease of initially run their analyses against indi- that your BI products should help you
implementation and administration, scal- vidual systems, the time will come protect, while allowing those who
ability, user-interface options, and how when data from several sources is need to analyze it to do so efficiently.
well it integrates into your company’s needed to show the total picture.
existing and future platform environment. A product suite that includes data • Robust report cataloging and distri-
integration technology and the ability bution functions that allow authorized
Among the most important of these to have the data appear as if it were business users to receive their analy-
considerations are: located in a single source allows you ses on both a periodic-subscription
to accomplish this easily. and an on-request basis. A function
• An integrated product suite with a to alert users when certain events
range of functions that your company • Integration with your desktop soft- or value thresholds occur is also
can deploy as needed. As your com- ware, in particular Microsoft Office. important.
pany grows, it should not outgrow This allows users to complement BI
the software of its BI vendor. In addi- with their familiar desktop tools, • The ability to deliver reports to a wide
tion, individual users may require dif- which can reduce your organization’s variety of desktop and mobile devices,
ferent functions, and an integrated training requirements. with content formatted to match the
product suite provides the greatest functionality of these devices
deployment flexibility. • Support for multiple operating
systems. You can keep your future • Strong search functionality that
• The scalability to handle an expand- options open and not constrain your facilitates finding needed information
ing user base as your organization organization to a single operating and locating relevant analyses and
grows and usage increases. As your system. Linux is growing rapidly in reports
organization gains experience with BI importance, and your BI solution
and its usefulness becomes evident, should support it. • Support for business users who
it’s quite likely that its usage will want to “speak” in business terms.
spread quickly. • Ease of initial installation and deploy- A product suite with a semantic layer
ment, as well as ease of adding more transparently isolates users from
• Data-quality functionality to ensure users. This not only makes it easy underlying technical complexities
a trustworthy data foundation so that to add new users quickly but can and allows them to focus on their
your company is analyzing accurate, increase the productivity of your IT business issues, not technical soft-
consistent, and complete data. High- department. ware details. For users that need to
quality data is a requirement for high- know where data was sourced from
quality decisions, helping you avoid • Powerful but easy-to-use administra- and the underlying formulas (for
the problems associated with having tion tools. Your IT department needs example, how gross profit and net
“multiple versions of the truth.” to control “who can access what” profit are computed), data lineage
and provide a level of security and details should be readily available.
When selecting a business intelligence • A history of vision and innovation. • A large cadre of partners – both soft-
vendor, it’s important to consider many A vendor with a proven track record ware vendors and consultants. One
factors – including experience, reputa- of innovation and industry leadership measure of “openness” is the num-
tion, and stability – as well as the ven- is likely not only to meet the current ber of other software products that
dor’s professional services capabilities needs of its customers but also to a BI tool works with. A vendor that
and the quality and strength of its anticipate and meet their future actively encourages partnerships is
partnerships. requirements. likely to have little problem integrating
its technology with your current and
Among the most important of these • Reputation and ability as a BI spe future software environments. Ven-
considerations are: cialist. As BI usage increases, it’s likely dors with a strong base of consulting
that your organization will deploy it partners make it easier to find out-
• A vendor’s education and training against additional systems and addi- side expertise should your organiza-
capabilities. While many vendors offer tional databases. While a database tion have special requirements.
on-site and in-house training, a few vendor may offer its own proprietary
have developed self-paced computer- BI technology, what happens when • A vendor with a product set that
based training that can assist new your organization decides to use provides a strong growth path. Your
users in getting started or help expe- another database? You need a BI organization needs a solution that
rienced users quickly master advanced specialist that can handle a wide works in multiple operational systems
product functionality. variety of data sources. and data warehousing environments
to provide maximum deployment
• A proven track record and a history of • Multiple delivery options. While many flexibility.
successful growth – both in revenue vendors only allow you to license
and in capabilities. Solid growth and their products to run on your compa- • A successful track record and exten-
profitability can indicate astute man- ny’s servers, others provide on- sive experience with organizations of
agement and product acceptance. It demand or software-as-a-service all sizes. Your organization will likely
allows the vendor to better serve its (SaaS) options. In this scenario, the grow and expand. It may not be
customers and invest in the future. vendor hosts the software on its own a giant today, but it could be one
servers, and your organization uses tomorrow. Choose a vendor that
• A history of acquiring complementary it through Web browsers. The SaaS you can growth with.
technology and successfully integrat- model can be especially appealing to
ing it with its own. Such a vendor is small companies that wish to minimize • A multinational presence. If you expect
likely to be able to react quickly to upfront startup costs while still having to operate on an international scale
new market demands and to supply the ability to bring the software in- someday, you need a vendor that
the technology your company needs house at a future time when it would does the same.
– both now and in the future. make economic sense.
All employees have the responsibility While many small businesses and
to make the best decisions possible, midsize companies have relied on
based upon the data available to them spreadsheets as their primary BI tool,
at the time. If their ability to analyze this most of them have come to realize that
data and transform it into useful infor- this is a stopgap solution and one that’s
mation is improved, the overall quality apt to lead to data chaos and inconsis-
of their decisions can be improved as tent analysis results. This is not to say
well. that spreadsheets should be aban-
doned; rather they can be a part of
Business intelligence provides a spec- an organization’s BI tool set, especially
trum of tools and solutions to achieve if used in conjunction with a commercial
this. It’s the underlying technology BI product suite that integrates with
behind, and a key component for, more spreadsheet environments.
effective decision making. Helping
to align individual and departmental Shouldn’t your organization be using
efforts with overall corporate strategies business intelligence technology
should lead to improved organizational to help it run its business more
results. intelligently?
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