Business Intelligence Across the Organization
Why Standardizing Business Intelligence Is Critical
Author: Karl Van den Bergh, Product Marketing Manager for BusinessObjects.
Contributors: Crispin Read, Darren Cunningham, Dave Kellogg, Dion Wright, Frank Prabel, Isabelle Nuage,Jem Eskenazi, Jennifer Meegan, Jose Villacis, Kevin Sullivan, Mark Ritacco, Mike Bendel, Paul Clark, Steve Becker, Steve Jones, Timo Elliott, Toby Pritchett.
Audience: This paper is intended for IT executives in organizations with no current business intelligence (BI) standards who wish to understand the value of standardizing BI.
In the 1984 Steven Spielberg movie, "Gremlins," Zach receives a cute but mysterious pet from Chinatown as a birthday gift from his father, unaware of the magnitude of his responsibility in respecting the three rules for its care. By breaking one of the rules, the young man unwittingly unleashes a wave of havoc as the gremlins mutate and multiply uncontrollably, almost bringing his hometown to its knees. Through his ordeal, Zach learns that a seemingly benign thing, not correctly cared for, can lead to unforeseen and sometimes detrimental consequences. Today, we could apply a similar lesson to business intelligence (BI). BI is the technology that allows organizations to access, analyze, and share information in order to drive more informed business decisions. It is increasingly recognized as key for business success, as evidenced by the continued strong growth of this market, estimated to reach nearly $12 billion by 2005 [see 1].
However, the BI market has drawn multiple and generally incompatible vendor offerings. Consequently, as Gartner puts it, there is a strong risk that "through 2005, users will adopt a staggering amount of disparate and unrelated BI technologies […] adding to BI fragmentation in organizations ."
It is these disparate BI technologies that are the "BI Gremlins." The rule for their care – defining an enterprise-wide BI strategy and standard – is often neglected. As they continue to proliferate, the consequences will become increasingly visible:
•Rising redundant costs in deployment, maintenance, and training
•Frustrated end users who cannot get timely answers to their business questions
•Loss of competitive advantage in failing to exploit the benefits of enterprise BI
As an IT executive, you are concerned with standardizing infrastructure and leading crossenterprise initiatives in order to bring increased business value to your users. By setting in motion a BI standardization initiative today, you can reap savings in time, resources, and eventual frustration, while delivering the benefits of enterprise BI: deeper business insight, a more collaborative work environment, and a 360° customer view.
In the first section of this paper we look at factors hindering business intelligence standardization today. We then investigate the consequences of this lack in standardization and how the establishment of a BI standard can resolve the associated issues and lead to significant benefits, as illustrated by case studies of successful enterprise BI deployments. In the final section, we recommend an approach in moving forward with enterprise BI standardization.
It has almost become a cliché to say that information is the currency of the new economy. Yet it is undeniably true. Fast and easy access to reliable and actionable information now represents the ultimate competitive advantage. Information drives the myriad of business decisions in today’s flattened organizations. Information allows companies to acquire, retain, and grow an increasingly volatile customer base. Information helps streamline processes and identify new revenue opportunities. Today, as John D. Rockefeller once said, "He who has the most information, wins."
But achieving access to information is no trivial task. The issue is not the quantity of data available. Online data has experienced exponential growth in the last decade with the advent of ERP systems and the web, reaching about a million terabytes in size. The problem is how to access data distributed over multiple systems and geographies, and how to turn that data into meaningful information.
The BI industry has dedicated over a decade of research and development to address this Challenge . BI technology enables quick and easy access to data wherever it is located. It provides the tools to understand the data in context, thereby turning it into actionable information.
Finally, it allows the sharing of that information across the extended enterprise – on the corporate intranet, helping employees make more informed decisions, and over the customer and supplier extranets, helping build stronger and more profitable business relationships.
The core benefit of business intelligence is that it helps turn information into knowledge into profit .This benefit can be further refined as:
• Reduced costs
• Increased revenues
• Improved customer satisfaction
By providing organizations with a clear understanding of their business processes, companies can easily identify operational inefficiencies, helping to reduce costs. For example, Fiat estimates saving about $45M since the implementation of its enterprise BI system.
Through business intelligence, companies can differentiate their offerings from the competition by providing information-based services to their customers. Increased revenues are obtained through new customer acquisition or directly from the information-based services. For example, Owens & Minor estimates a gain of $60M annually from new customer acquisition thanks to its BI extranet.
Improved customer satisfaction
By enabling self-service access to information across an extranet for customers, partners, and suppliers, companies can reduce support costs and improve satisfaction for each of these groups. For a more detailed study of these benefits and the return on investment (ROI) that can be expected from a BI deployment, please refer to Appendix A.
Lack of Business Intelligence (BI) Standardization: the Cause
Considering the benefits that business intelligence provides, it may come as no surprise that this market continues to experience strong growth and receive attention from both industry and analysts. The Hurwitz Group has defined BI as "an imperative for e-business ."Gartner estimates that "by 2002, business management in 50% of large enterprises will identify BI as a strategic initiative, forging an alignment of goals, objectives, and resources to better support the enterprise with insight (0.7 probability) ".
Not surprisingly, business intelligence has also received considerable attention from vendors eager to cash in on this interest. The term "business intelligence" is all too readily applied to any application capable of generating even the most basic reports. It seems that everyone from enterprise application vendors to database vendors now offer "business intelligence solutions."
The BI Patchwork
Despite the fact that these offerings can benefit a specific audience, they will be severely challenged in their attempts to satisfy broader enterprise BI requirements. As Gartner notes, "Users have become increasingly frustrated with the failure of enterprise application vendors (e.g. ERP, CRM) to deliver little more than reporting options ."Likewise, as IDC’s Henry Morris points out, BI offerings from database vendors are "limited to specific segments making up a minor portion of the total BI market" because users generally seek to "access data from multiple databases ."
It is clear that a comprehensive BI strategy cannot be satisfied by these point solutions. However, as BI functionality may be bundled into other applications or inherited through acquisitions, or because the given functionality may meet the immediate needs of a subset of users, companies are finding themselves with a patchwork of incompatible BI technologies that cannot respond to the deeper and broader needs of the organization.
It is this patchwork that will impede companies from realizing many of the benefits of business intelligence. And the danger is very real. As Gartner puts it, "Through 2005, broad-scale adoption of packaged applications will prevent more than 50% of large organizations from establishing complete perspective through BI (0.7 probability) ."
Lack of BI Standardization: the Consequences
Due to its growing importance, business intelligence is appearing at all levels of the organization. Lacking a common BI standard, companies risk finding themselves with a patchwork of incompatible technologies that will increasingly create problems and will prevent many of the benefits that BI brings. The lack of BI standardization can impact an organization on three levels:
The Impact on Business
• How much time and resources are being spent enterprise-wide every time a new department, office, or project needs to select a BI tool?
The selection of a business intelligence solution, from the initial identification of candidate vendors to the final proof of concept, can be a lengthy and costly process taking weeks or even months and involving both IT and end users. With the current rate of adoption of BI, this process is, in many cases, being repeated unnecessarily at various levels within the organization.
• How much more are you paying for licenses bought in multiple one-off deals?
As the uptake of BI at various levels within the organization continues, there is a growing need for vendor contract consolidation. As noted in an AMR Research survey, "CIOs are insisting that vendors recognize the significance of their relationship with the entire firm and negotiate on that basis, not in one-off deals."And this need becomes even more critical in a slowing economy.
• What will it cost your organization to support BI solutions from defunct or acquired vendors?
Now more than ever, companies are examining their suppliers on financial viability. The cost of having to support or migrate solutions from vendors that have gone under or that have been acquired is just too prohibitive. Today it is essential to go with the tried and proven, to go with the market leader.
• What is the opportunity cost in delaying standardization and not capitalizing now on the benefits afforded by BI?
Businesses that have begun rolling BI out to the enterprise are experiencing significant benefits. British Airways, for example, estimates that it has made $100 million in cost savings and new revenues since the implementation of its BI system .The need to standardize BI is growing. By doing so today, you will save time, reduce costs, and reap significant benefits, leaving you free to focus on your next challenge.
The Impact on IT
• How much is it costing your staff to learn and administer multiple BI tools?
As the patchwork of different BI tools grows, the complexity and cost in learning, administering, and integrating the various technologies increase dramatically.
• What is the cost of training and supporting users on multiple and often incompatible tools?
Depending on the user requirement, he or she may have to be trained on multiple BI tools. In some cases, because the information they are looking for comes from disparate systems with distinct BI interfaces, users will have to rely on IT to resolve the integration, leading to unnecessary work and frustration for both IT and the end user.
• What is the security risk of having multiple BI tools?
Having multiple tools means having multiple security infrastructures for administering users. This ultimately leads to a less secure and less reliable environment since more tools results in a higher likelihood of error and security breach.
The Impact on Customers
• How much are your customers – the end-users – paying in time and frustration because there is no "single truth"?
Without a common BI framework, multiple versions of the truth will occur. For example, the answer to "What is the revenue for product A?" may vary from one system to another, depending on how revenue is defined and how clean the data is. Users will have huge difficulties trying to communicate and collaborate in such an environment, as there is no common understanding of the terms being employed.
• What is the opportunity cost due to limited visibility of, and mobility through, the enterprise?
Lacking a common BI framework, a request as simple as, "Give me the list of purchase orders and support issues concerning my customer," will be difficult to obtain if the information comes from disparate systems. These information stovepipes (in applications and departments) result in partial or departmentalized views of the business, impeding users from obtaining a full understanding of their business activities and leading to sub-optimal decision making. Also, employee mobility, key to the personal development programs that exist in many companies, will be inhibited if users have to learn a new BI tool every time they move departments.
• How will users judge an information system that cannot deliver timely answers to their business questions?
Business intelligence is the outermost and therefore most visible layer of the IT infrastructure. It is essentially this layer that delivers the business value of the IT infrastructure. Users often take for granted the fact that the servers are running, that the network is functional, and that they have access to Microsoft Office®. Business intelligence, on the other hand, provides users with true business insight, helping them perform better in their jobs. BI makes a real and visible difference. This being the case, it is understandable why satisfaction or dissatisfaction with the BI system may reflect on the entire IT infrastructure.
The Benefits of BI Standardization
We have now seen the problems related to the lack of a common BI framework. By standardizing BI you can help reduce the time, resource, and frustration costs that we have identified. As Meta Group puts it: "The avoidance of unnecessary BI product proliferation is critical for costeffective deployments… IT organizations can save costs by setting corporate BI tool standards ."
Moreover, BI standardization not only helps eliminate these costs but also delivers significant benefits. Here we summarize the benefits you can realize from standardizing business intelligence across the organization. Case studies of successful business intelligence deployments at Fiat, Ingram Micro, and Allegiance Healthcare can be found in Appendix B.
Attain Deeper Business Insight
A common BI standard means that you can easily bridge existing information stovepipes (for example in your ERP and CRM applications) in order to achieve a more holistic view of your business activity. For example, you might combine information from your ERP system and your e-commerce application to correlate online and offline spending to understand which channel is more effective for a given product.
Create a More Collaborative Work Environment
A common BI standard means that users can easily move from one department to another without having to learn another tool to access their information – improving employee mobility and effectiveness. The common semantics defined in an enterprise-wide BI framework mean that all users, independent of their department, have the same understanding of shared terminology helping to promote teamwork and idea sharing.
Achieve a 360° Customer View
With an overarching BI framework, customer information can easily be consolidated from multiple data sources (e.g., CRM, ERP, web applications) to obtain a comprehensive 360° understanding of customer value, behavior, etc. This consolidated view can then be distributed to all customer touch points throughout your organization to ensure consistent cross-enterprise handling of your customers.
This information is also of value to your customers because it can help them better understand their buying patterns. According to CIO magazine, "The first benefit of the integrated enterprise is the ability to deliver consolidated information to customers ."This information can be delivered to your customers over a BI extranet, helping you to differentiate your services from the competition and build stronger customer relationships.
Deliver Greater Business Value Faster
In a 2001 BI survey of 600 businesses, there was a clear indication that analytic applications are gaining in importance . According to the survey, "at least half of the respondents stated that they expect to increase their budget for analytic applications." Analysts are viewing this growth positively as analytic applications help deliver greater business value faster to end-users.
But Gartner warns, "Most enterprises still purchase BI applications on a ‘one-off’ or tactical basis in response to specific user demands. This can create a patchwork of applications that is difficult to maintain and support ." By establishing a common BI standard, you set up the foundation into which all analytic applications will be integrated, eliminating a potential patchwork and delivering maximum business value to your users.
An Approach to Standardizing BI
The picture is clear. There is a growing need to define a common BI framework. By doing so, businesses will save many of the costs in time and resources they are incurring today. They will also position themselves to experience the benefits of true enterprise-wide insight.
The question now is how? Experience has led us to formulate the following three-step approach:
• Raise BI standardization to a strategic level
• Set up a task force to select the BI standard
• Adopt a phased approach
Raise BI Standardization to a Strategic Level
The first step in tackling BI standardization is to create awareness at the executive level of the costs being incurred due to a lack in BI standards and of the benefits that can be achieved through standardization. Executives need to understand that the proliferation of disparate BI systems will increasingly lead to highly visible problems at the business, IT, and customer levels. This proliferation must be stopped. And the sooner, the better. Once executive backing has been achieved, the task of driving enterprise-wide standardization will be much easier. This paper can provide some help in identifying where your organization is being penalized most by the lack of BI standards. It will also help you recognize the key benefits you will gain from standardization.
Set Up a Task Force to Select the BI Standard
Choosing an enterprise BI standard is integral to the success of the BI standardization initiative. In particular, it is important that your choice does not simply default to a solution that may already exist at the departmental level. Scaling BI to the enterprise level extends requirements well beyond departmental needs. Moreover, when choosing a BI standard, it is important to evaluate not only the suitability of the BI solution, but also the viability of the solution provider.
In order to select the right BI standard, it is recommended that you set up a cross-functional and cross-divisional task force made up of end-users and IT so that all needs are duly considered. The goal of the task force should be to identify a single BI standard. There may be situations where niche requirements will call for a specific tool but, provided the BI solution is carefully chosen, the majority of needs will be satisfied by the standard.
When standardizing enterprise BI, certain evaluation criteria for the BI partner and solution, outlined below, must be satisfied in order to ensure the success of the project. These criteria should be considered in conjunction with specific requirements that the task force will identify.
Choosing the right BI partner
In choosing the appropriate partner to accompany the strategic initiative of rolling out an enterprise BI standard, three factors should be considered:
• Market leadership.The choice of an enterprise standard must be a safe one. Organizations cannot afford to invest in a solution that risks being discontinued because the BI partner is no longer in business or has been acquired.
• Enterprise BI experience.The chosen BI partner must have proven experience as an enterprise standard. The risk of adopting a solution that has not demonstrated the ability to scale to the enterprise level is too high.
• Vision.By investing in business intelligence, companies are ultimately seeking to grow a more profitable and competitive business. To help companies achieve this, the chosen BI partner must provide the best solution today and, through its vision, demonstrate its capacity to continually deliver the best solution moving forward.
Choosing the right BI solution
There are many challenges involved in scaling a business intelligence solution to the enterprise level. On the one hand, total cost of ownership (TCO) must be closely examined in order to avoid unnecessary training, maintenance, and administration costs often due to poor product integration; on the other hand the solution needs to demonstrate enterprise-level capabilities, which we believe to be the following:
• Ease of use
For end users:Ease of use is consistently rated as one of the top requirements for a BI solution. Indeed the purpose of business intelligence is to provide easy access to relevant information. This means providing users with a simple tool that hides data complexity through a semantic layer while providing all needed BI functionality in a single interface accessible from the users’ preferred device (browser, PC, PDA, phone, etc.).
For IT:Administering an enterprise BI solution is no trivial task. It is therefore essential that the chosen BI solution be as simple and efficient to administer as possible. To achieve this, the BI solution should demonstrate complete integration both on the back end through a single metadata, security, and server layer, and on the front end by providing all BI functionality from a single access point. The solution should also ensure easy integration with existing IT infrastructure and other third-party applications by being standards-based and by possessing an open API.
Of user population:Deploying an enterprise-wide BI solution can mean giving access to thousands of users. It is essential that the chosen BI solution be able to support a large load of users in terms of performance and reliability, particularly for mission-critical applications such as customer-facing extranets. A distributed component architecture that can run on Windows NT and UNIX ensures BI solution performance regardless of the load and guarantees continuous availability, even following a server crash, through its failover capability.
Of data source access:Users need access to their information wherever it may be. In an enterprise setting, this information may come from a variety of sources. The chosen BI solution should allow access to the widest range of data sources, whether operational or analytical, as well enabling users to quickly and easily combine data from multiple sources within a given report.
• Security.An enterprise BI system will involve opening up corporate information to employees and, in many cases, to customers, partners, and suppliers. It is clear that system security is a top priority. Therefore, the BI solution should provide a single central security layer for all tools as well as enable integration into existing IT security infrastructure.
• Extensibility.The BI solution must be able to grow as the business grows. Sometimes, in order to rapidly earn BI benefits, businesses will want to buy a packaged solution. At other times, in order to gain competitive advantage, organizations will want to build their own solution. The chosen BI standard will need to provide both the "build" and "buy" options within an integrated framework so that custom and pre-built applications can leverage and communicate with each other, contributing to an increasingly global enterprise view.
Adopt a Phased Approach
Once a BI standard has been selected, an effective rollout is crucial to ensure that BI standardization is achieved. However, it is unlikely that standardization can be achieved in a single pass. Instead, it is advised that you bring in the BI standard and phase out non-standard incumbents in a step-by-step manner, as follows:
• Contain non-standard incumbents by stopping their spread beyond existing seats.
• Promote the BI standard internally through extensive end-user and IT training. Training should include benefits inherent to the BI standard and to the standardization itself.
• Ensure careful rollout so that both IT and end-users are sufficiently prepared and that implementation is as painless as possible.
• Consider setting up a sponsorship model whereby only the BI standard is corporate-funded and any non-standard BI is paid for by the individual department or business unit.
The BI Gremlins are out there. And, unbeknownst to many organizations, they are quietly multiplying into a patchwork of disparate technologies. As this proliferation continues, the damage in terms of cost, frustration, and lost competitive advantage will become increasingly apparent at the business, IT, and customer levels. Only by respecting the rule for their care – the definition of an enterprise BI strategy and standard – can this damage be avoided and can their true qualities shine through: the ability to provide deeper business insight, a more collaborative work environment, and a 360° customer view.
Business intelligence is extremely important in today’s information age. If BI is not raised to a strategic agenda and if an enterprise standard is not defined, organizations risk finding themselves burdened with an increasingly complex BI patchwork – without ever benefiting from true enterprise insight. And as Gartner warns, the danger is very real.
Those organizations that address this issue today will be the winners of tomorrow. As DM Review puts it, "This new millennium will be a knowledge economy, and those [...] that enable themselves now as business intelligence enterprises will be the survivors of the future ."
About Business Objects
Business Objects has become the enterprise BI standard of choice, both in terms of company viability and product offering. In this section we briefly describe the Business Objects company, following the criteria we previously defined for choosing the right BI partner. An evaluation of the Business Objects product offering can be found in Appendix C.
Business Objects is recognized as the market leader in business intelligence. It is the only major BI vendor to have maintained strong growth in both revenues and profits. Consequently it continues to gain market share – latest IDC numbers indicate that Business Objects is 50% bigger than its main competitor in the query and reporting market .
Because of its leadership position, Business Objects has become the preferred platform for other software vendors looking to embed BI in their offerings. OEM deals with market leaders such as Siebel and i2 are indicative of this. In the wider business arena, Business Objects has also become a recognized leader with, for example, its CEO ranked in the top 10 list of CEO Magazine’s annual survey .
Enterprise BI Experience
Business Objects has become the enterprise BI standard for Fortune 500 companies, whether for corporate intranets or customer facing extranets. As described in Appendix C, the Business Objects product suite fully satisfies the enterprise BI requirements of ease of use, scalability, security, and extensibility. It is for this reason that Business Objects has more 10,000+ license intranet customers and more extranet customers than any other BI vendor. Business Objects has over 13,500 customers, is present in more than 80 countries, and has hundreds of partners worldwide. "We needed a vendor that could support a scalable, global deployment. The stable products, worldwide infrastructure, and proven success of enterprise deployments from Business Objects made it an easy choice as our enterprise standard."
Debbie Baughman, CIO, Allergan
"Business Objects has helped us to realize our vision of creating a customer service extranet."
Mark Lyons, CIO, Zurich US Insurance
"[Business Objects] will allow us to capitalize on the size and high transaction volumes of our dynamic community, to better understand our users, and enable continued improvements that will benefit the eBay community."
Bob Sanguedolce, CIO, eBay
"Fiat has already realized some $45 million in returns [thanks to the data warehousing project and Business Objects]."
Gianluigi Castelli, CIO, Fiat
Business Objects is positioned as the "Enterprise BI Suite" leader in the Gartner Magic Quadrants that grade vendors on vision and execution . It is recognized as the BI vendor with the best vision and best execution, leading with technologies such as BI extranets, mobile BI, and enterprise analytic applications. A Hurwitz paper discussing a Business Objects mobile BI release stated, "By reinvesting in research and development to meet future product requirements, Business Objects is demonstrating that it will provide leadership and technology to support the long-term strategies of its customers ."
Business Objects continues to receive many industry awards. It has won the InfoWorld Readers’ Choice Award and the DM Review Readership’s Award as best BI product of the year. It was also voted by Intelligent Enterprise as one of the 12 Most Influential Companies in IT for the third year running.
The Benefits of Business Intelligence
The core benefit of business intelligence is that it helps turn information into knowledge into Profit . This benefit can be further refined as reduced costs, increased revenues, and improved customer satisfaction. Let’s take a brief look at each benefit in the examples below:
• Reduced costs.By providing organizations with a clear understanding of their business processes, companies can easily identify operational inefficiencies, helping to reduce costs.
British Airways:One of British Airways’ first forays into business intelligence came in the early 1990s, as a means of exploring its suspicion that it was suffering from ticket fraud. "Once we analyzed the data, we found that the ticket fraud was not an issue at all," said Peter Blundell, the airline’s knowledge strategy manager. "What we had suspected was fraud was in fact either data quality issues or process problems. Investing in BI gave us so many unexpected opportunities in terms of understanding our business." That was about a decade ago, and since then, Blundell estimates that business intelligence has resulted in something in the order of $100 million in cost savings and new revenues for the carrier.
• Increased revenues.Through business intelligence, companies can differentiate their offerings from the competition by providing information-based services to their customers. Increased revenues are obtained through new customer acquisition or directly from the information-based services.
Owens & Minor:In the past, customers of this multi-billion dollar medical supplies distributor had to order printouts on their account activity. These would be printed from the mainframe, and shipped to the customers through express mail. As a result of providing real-time business intelligence data to customers over the web, Owens & Minor not only reduced IT expenses (no more paper reports) but also was able to increase its revenue by attracting new business. Thanks to its BI extranet, it estimates to gain about $60 million a year in new business.
• Improved Customer Satisfaction.By enabling self-service access to information across an extranet for customers, partners, and suppliers, companies can reduce support costs and improve satisfaction for each of these groups.
Zurich American Insurance:Instant access to claims information over the web allows clients to analyze their accident trends and take action to prevent accidents and reduce claims. Examples include increasing security measures in areas where the most injuries occur. Customers are so happy with this BI system that adoption rates were far greater than Zurich had originally anticipated. This has led to significant cost savings ($400,000 in the first year) and new revenue through subscription fees. For a more detailed study of these benefits and the return on investment (ROI) that can be expected from a BI deployment, please refer to the white paper "The Business Value of Business Intelligence ."
The Value of Business Intelligence in an Economic Downturn
Although the benefits of business intelligence may now seem apparent, is the ROI compelling enough to justify expenditure in an economic climate where IT budgets are being frozen or even reduced? Evidence from those with BI systems already in place would indicate that BI is even more necessary in today’s uncertain economy. In DM Review, Richard Hackathorn proposes BI as "an e-medicine for alleviating the recession impacts" on companies . This is because BI, unlike any other technology, provides companies with real visibility over their business enabling them to react quickly in a changing economic climate. Also, as InformationWeek reports, investments in business intelligence by companies such as IBM and Cisco are resulting in cost savings that can make up for declines in revenue . It is therefore not surprising that only 16% of CIOs surveyed by Morgan Stanley Dean Witter said that BI would likely be cut from their budget in a slowdown . In a difficult economic climate there is increased pressure for IT executives to deliver visible returns on their investments – to make high impact IT investments. In the Morgan Stanley survey, the surveyed CIOs identified business intelligence as one of the highest ROI software projects.
Some examples of the benefits business intelligence can bring in an economic downturn:
• Business intelligence leads to true business insight and helps avoid disaster in a slowing economy. Real-time value chain visibility can help keep expenses in balance with declining revenue.
• Business intelligence helps understand customers and hold on to them. Focusing on customer satisfaction will go a long way to improving the bottom line without forcing companies to incur large expenses in attracting new customers.
• Business intelligence leverages existing investment in enterprise applications (ERP, CRM, SCM) by rapidly delivering visible business value to end users.
For a more in-depth analysis of this subject, please refer to the white paper "Business Intelligence: Now More Than Ever ."
Case Studies of Successful Enterprise BI solutions
Allegiance Healthcare:By establishing a common enterprise-wide BI solution, Allegiance Healthcare reduced IT costs, enhanced collaboration among the sales force, and improved customer relationships.
Allegiance Healthcare uses an enterprise business intelligence system called ASPIRE (Allegiance Sales, Pricing, and Integrated Reporting) to give Allegiance sales representatives the capabilities to better understand their customers’ purchases. Using ASPIRE, sales representatives can identify cost-saving opportunities and make standardization recommendations, such as contract purchases and purchases of Allegiance’s own line of "Best Value" products. Allegiance’s goals in the project were three-fold.
The first goal was to reduce the IT staff that supports the sales force. Before ASPIRE, Allegiance had five IT groups, consisting of 10 people, supporting 17 sales organizations and seven different types of reporting systems. That was reduced to one IT group, consisting of four people, to support a sales force of 1,100, all using the same unified system. The rest of the team was redeployed to other projects.
The second goal was to make the data both more consistent and current. Allegiance previously provided different cuts of data to various sales groups. Each cut of data originated from a different reporting system. When sales representatives from different Allegiance product lines came together to create corporate-wide customer proposals, they found inconsistencies in the numbers. Using ASPIRE, which is sourced from only one data warehouse, Allegiance was able to offer its sales force the same enterprise-wide data concerning customers, products, purchasing, and pricing.
The third goal was to make training of sales representatives easier and to make collaboration among them a possibility. Rather than constantly having to learn new systems as they moved from one sales group to another, sales representatives now use the same tool. Trainers, too, only need to learn one system and can train any combination of sales representatives, regardless of the product lines involved. ASPIRE’s common user interface also has allowed sales representatives to identify opportunities in their customer base and to share applicable ones with the rest of the Allegiance sales team.
ASPIRE was part of a larger business systems overhaul implemented by Allegiance called the Horizon project. Allegiance replaced its key business systems with an SAP ERP system for managing data and built a separate decision-support data warehouse for enterprise business intelligence. Since implementing Horizon, Allegiance has been able to save $10 million per year in IT expenditure and deliver a better level of service to its business users.
Ingram Micro:Ingram Micro’s enterprise business intelligence solution allows them to achieve an integrated view of their business. This has enabled them to identify revenue growth opportunities, improve one-to-one marketing, and maximize their internal operational efficiency. Ingram Micro, with $29 billion in annual revenue, is the world’s largest distributor of computer products. It is now distinguishing itself as a leading implementer of business intelligence with its launch of the "WIP" project (Web Insight Platform). This internet platform allows Ingram Micro executives, sales, and marketing managers to obtain an integrated, daily view of their business. Ingram executives view the project as a critical application that will allow them to identify revenue growth opportunities, improve customer relationships and one-to-one marketing, and maximize their internal operational efficiency.
The WIP project combines data from four disparate information sources:
1. Clickstream data
2. Sales data
3. Customer feedback data
4. Infrastructure data (information on system performance, such as system uptime, and peaks/lows in system usage)
With access to this combined data, Ingram can run a much more intelligent organization. It enables the following:
• Clickstream analysis for selling advertising space.Executives can track clickstream activity of their largest customers. With this information, they can view the 25 most popular Ingram web site pages according to a particular customer, such as a large electronics store chain, and the five pages that generate the most sales for Ingram from that store chain. Ingram can then offer this information to the suppliers whose products are being viewed most on those pages, to incent them to advertise more on those pages, or list more product promotions there.
• One-to-one marketing, through linking transaction and call center data.A telemarketer on the phone with a customer could pull up the Web Insight Platform to view the purchasing history of a customer. They might see that the customer tends to purchase cables whenever purchasing monitors from Ingram. When the telemarketer is on the phone with the customer, the report would flash an icon for cables as a reminder to cross-sell these products while selling monitors.
• System tuning for peak activity by combining clickstream and transaction data.By analyzing the clickstream data for a given week, Ingram has seen that visitors tend to browse and research products on Monday and Tuesday, with a large spike in sales orders on Wednesday, and then an increase in browsing and research again on Thursday and Friday. With this information Ingram Micro can optimize their infrastructure and staffing to make sure their operation is prepared to handle the spike in orders in Wednesday, and provide customers with product information on the other days.
Fiat Auto:Right from the word "go" – during the testing phase of their business intelligence solution – Fiat Auto was able to identify anomalies in their production line and is now saving several hundred thousand dollars annually.
The Italian carmaker had money going up in smoke, but didn’t know it. Fiat Auto maintains a worldwide network of parts suppliers for its automobiles, but before installing an enterprise business intelligence system on top of a data warehouse, managers had no practical way of tracking, comparing, managing, and minimizing costs for those components.
A revelation of the value that such a system could provide came during its testing phase on a part as pedestrian as the ashtray. During the testing phase, IT engineers detected a large discrepancy in the prices that Fiat was paying for the ashtrays in a pair of vehicles. The data warehouse enabled comparative analyses of various component prices. Curiously, the engineers discovered that the ashtray for the economy model Fiat Punto cost about 50% more than the ashtray for the luxury model Alfa 166.
The IT staff was the first to discover this interesting data and alerted the purchasing department. The purchasing managers could not believe it and initially thought there was a mistake in the information. Per individual ashtray, the sum of money at stake was not huge – ashtrays go for a couple of dollars – but with 650,000 Puntos rolling off assembly lines each year, the costs quickly mounted. Armed with its nugget of intelligence, Fiat was able to renegotiate prices with the supplier of the Punto ashtray and is now saving several hundred thousand dollars a year.
Criteria for selecting an enterprise BI standard
• Total cost of ownership (TCO).When choosing a BI solution for thousands of users it is clear that cost of ownership must be closely examined. Integration is one of the most significant factors impacting cost of ownership. The cost of an unintegrated BI solution will rise non-linearly as more users are added.
Business Objects has always placed significant focus on integration, preferring in-house development to product acquisition. In the rare cases of acquisition, the acquired technology has been imbedded at the deepest level. It is for this reason that the Business Objects offering is integrated both at the front end, providing query, reporting, and analysis capabilities from a single interface, and at the back end, working off a common server, metadata, and security infrastructure. This extremely tight integration ensures that the Business Objects solution offers the lowest possible TCO. For more information on how to calculate and reduce the TCO of a BI deployment, please refer to the white paper "The Decision Support TCO – Calculating and Reducing TCO ."
• Ease of use – for end users.Ease of use is consistently rated as one of the top requirements for a BI solution. Indeed the purpose of business intelligence is to provide easy access to relevant information. This means allowing users to access their data wherever it may be and in whatever format it might be. Business Objects does this thanks to its patented "semantic layer" that automatically translates complex database terminology into familiar business terms. For example, the simple business term "customer" may actually translate to different columns or combination of columns with different names in multiple tables. Business Objects hides this complexity from users ensuring that they can easily create their own queries without having to wait on availability from IT.
Sometimes users will just need to view and refresh reports but, depending on their profile or current requirements, may also want to analyze the report data or create their own reports. Business Objects provides all this functionality within a single tool. This means that users only have to learn one tool and can easily and seamlessly move from one task to another without having to change tools.
Ease of use also means that users have access to their information wherever they are and whatever their preferred device is. Business Objects leads the industry in providing mobile business intelligence. Users can access their information whether from a browser, PC, mobile phone, or PDA.
• Ease of use – for IT.Administering an enterprise BI solution is no trivial task. It is therefore essential that the chosen BI tool be as simple and efficient to administer as possible. Business Objects ensures this thanks to its central repository, common metadata layer, and single security layer. IT can easily control all resources from the central repository. Metadata is defined only once and can then be immediately shared by all users with appropriate access rights. The single security layer means that user profiles are defined only once for all resources.
Business Objects has been designed to minimize the burden on IT staff while allowing them to maintain control. First, Business Objects provides all query, reporting, and analysis functionality within a single tool. IT does not have to worry about managing and integrating multiple tools. Second, as it is so easy to use, users can create, analyze, and share their own reports without having to rely on IT. However, IT remains in control as it defines all resource access.
Ease of administration also means that the BI solution must integrate with existing IT infrastructure. Business Objects maintains an open platform policy so that it works with all major operating systems, browsers, application servers, and web servers. Also, Business Objects is ensuring integration with third party vendors and service providers through its open API and strategic integration partnerships. Examples of these partnerships include the Open Portal Initiative with all major enterprise portal vendors, the Open CRM Partner Initiative, the Data Integration Initiative with major ETL players, and the Mobile BI Initiative.
Finally, increasingly recognized as the industry standard, Business Objects technology is being imbedded by more and more leading third party vendors such as Siebel and i2, ensuring deep integration with these applications.
• Scalability – of user population.Deploying a BI solution enterprise-wide can mean giving access to thousands of users. It is essential that the chosen BI solution be able to support such a load. Business Objects is the choice vendor for enterprise-size BI solutions. Business Objects has more 10,000+ license customers than any other BI vendor. To further prove this point, Business Objects has published scalability benchmarks on both Windows NT and UNIX.
With time the user population will grow. The BI solution will therefore need to seamlessly scale with increased usage. Business Objects is built on a distributed component architecture (CORBA). This means that as usage changes, load can be passed from one server to another or more servers can be added, without disrupting the system.
Enterprise BI systems are often mission critical, particularly when involving customer, partner, or supplier extranets. The BI solution must guarantee 100% availability. The Business Objects CORBA architecture enables failover, which means that if one server stops another will automatically take over. The Business Objects solution has been specifically designed for mission-critical applications. This is why Business Objects has more BI extranet customers than any other vendor.
• Scalability – of data source access.Users need access to their information wherever it may be.
In an enterprise setting, this information may come from a variety of sources. Business Objects positions itself as the "universal client," allowing users to easily access and combine data from multiple data sources including relational databases, OLAP servers, packaged applications (ERP, CRM, SCM), the web, OLTP systems, local data files such as Excel and XML, and so on. Possessing no database, data warehouse, or ETL tool of its own, Business Objects remains data store independent.
Users can easily combine data from multiple sources, for example comparing actuals from an Oracle database against budget from an Excel spreadsheet, at the report level. Business Objects does not require IT to build special multidimensional cubes or database schemas to make this possible.
• Security.An enterprise BI system will involve opening up corporate information to employees and, in many cases, to customers, partners, and suppliers. It is clear that system security is a top priority. Business Objects provides a single central security system to allow IT control all resources for both intranet and extranet users. Security profiles can be extremely fine-grained, reaching down to the column and row levels for data access.
Integration with existing security infrastructure is also important. Therefore, Business Objects works over firewalls, supports SSL, integrates with standard directories, can leverage NT login information, and so on.
• Extensibility.The BI solution must be able to grow as the business grows. Sometimes, in order to rapidly earn BI benefits, businesses will want to buy a packaged solution. At other times, in order to gain competitive advantage, organizations will want to build their own solution. Business Objects offers both "build" and "buy" options within an integrated framework.
Businesses can buy from a rapidly expanding suite of applications that lets them deploy best-practice analysis in the critical areas of customer, product and service intelligence, supply chain, and operations analysis. These modular applications provide predefined performance metrics and analytics that deliver immediate business value.
Additionally, companies can build a custom application based on the Business Objects BI platform. Both packaged and custom applications can leverage and communicate with each other as they plug into a common BI framework, contributing to an increasingly global enterprise view.
Footnotes and References
 "Information Access Tools Market Forecast and Analysis Summary, 2001-2005," IDC, May 2001.
 Howard Dresner, "BI: Making the Data Make Sense," Gartner, May 2001.
 For a general overview of the business intelligence industry please see: Bernard Liautaud with Mark Hammond, "e-Business Intelligence," McGraw-Hill, 2001.
 Philip Russom, "BI: An Imperative for e-Business," Hurwitz Group, 11 August 2000.
 Ted Kempf & Zipa Acosta, "BI: Integrators Prepare Your Solutions," Gartner, February 2001.
 Nigel Rayner, "Packaged BI Applications: Friends or Foes?" Gartner, May 2001.
 D. Vasset & H. Morris, "BI in the DB: Are Independent BI Suppliers Threatened?" IDC, April 2001.
 Howard Dresner, "BI: Making the Data Make Sense," Gartner, May 2001.
 "Coping With a Slowing Economy: Tactics of Seasoned CIOs in FS," AMR Research, 11 June 2001.
 Bernard Liautaud with Mark Hammond, "e-Business Intelligence," McGraw-Hill, 2001.
 Dave Folger, "BI Tools: Evaluation Criteria," Meta Group, 8 March 2001.
 Derek Slater, "The Whole is More Than its Parts," CIO Magazine, 15 May 2000.
 "Database Solutions IV," Survey.com, 2001.
 Nigel Rayner, "Packaged BI Applications: Friends or Foes?" Gartner, May 2001.
 Timothy Raab, "The Need for a BI Strategy...", DM Review, June 2000.
 "Information Access Tools Market Forecast and Analysis Summary, 2001-2005," IDC, May 2001.
 "CEO Growth 100," CEO Magazine, May 2001.
 Howard Dresner, "BI: Making the Data Make Sense," Gartner, May 2001.
 J. Sweeney-Coolidge, "DW and BI - Business Objects Delivers Expanded Mobile BI Capabilities," Hurwitz Group, 2 July 2001.
 Bernard Liautaud with Mark Hammond, "e-Business Intelligence," McGraw-Hill, 2001.
 Mark Ritacco, "The Business Value of BI", Business Objects, 2001.
 Richard Hackathorn, "BI for Intelligent Cost Structures," DM Review, June 2001.
 "Manufacturers are Thankful - or Wishful - for Applications That Help Them Respond," InformationWeek, February 2001.
 "MSDW CIO Survey Series: Release 2.1," MSDW, 6 March 2001.
 Mark Ritacco, "BI: Now More Than Ever," Business Objects, 2001.
 Nicolas Bontron, "The Decision Support TCO," Business Objects, 1998.
About the Author
Karl Van den Bergh is the Product Marketing Manager for BusinessObjects(tm), having previously held marketing management and consultancy positions in the software industry for both American and French companies. He also possesses a technical background with a couple of years work as a software engineer. Karl is fluent in English, French, and Italian and holds a Bachelors in Physics from Trinity College, Dublin and a Masters in Computer Science from Imperial College, London.
The Business Objects product and technology are protected by US patent numbers 5,555,403 and 6,247,008. The Business Objects logo is a trademark of Business Objects S.A. in the United States and/or other countries. All other company, product, or brand names mentioned herein, may be the trademarks of their respective owners. Specifications subject to change without notice. Not responsible for errors or omissions. Copyright © 2001 Business Objects S.A. All rights reserved.
Sarah A. Blanchard, Eastwick Communications, provided permission on behalf of BusinessObjects to use this article at DSSResources.COM on Friday, December 21, 2001, final copy was received January 25, 2002. For more information email firstname.lastname@example.org. This article was posted at DSSResources.COM on March 10, 2002.