View from the top
Tough economic times are actually one of the reasons BI vendors continue to do well: as senior executives cut costs and tighten ship across the board, they are turning to BI tools to get a better view on their business operations, monitor the performance of partner relationships, assess markets for new products, and implement customer retention strategies based on analysis of customer buying patterns.
"I don't think most companies really identify their most profitable customers," says Ron Swift, vice president of strategic customer relationships with the Teradata division of data warehousing giant NCR.
"They tend to model based on sales, and don't understand they can utilise detailed historical behaviours of transactions and events. But if you're selling the wrong product and don't have the analytics to know that, what good is it? Companies need an enterprise approach to understanding customers, and if you do it effectively, you can shorten sales cycles."
As marketing staff warm to the benefits of an appropriately structured BI solution, senior managers are becoming particularly interested in BI's ability to improve their view of the current state of the business.
Instead of waiting for monthly printed reports, they can log onto an online BI "dashboard" and get a top-down view of the way the business is performing--one department at a time. They're managing by wire, so to speak, and BI systems are being called upon to deliver that wire.
Often, these systems are led by initial deployments targeting specific departments of areas of the business, then expanded upwards throughout the business as usage and demand dictate.
At Virgin Mobile, for example, Gatland was careful to limit the Oracle BI environment to the marketing department first. Later he expanded the system to offer executives in other areas the ability to query more general business and financial data that was already being collected in the Oracle system.
This approach allows the BI tools to be progressively rolled out to areas of greatest need first. Kinks can be ironed out, business rules tweaked, and all the while the system provides a continuous and expanding indicator of the company's financial health by pulling relevant data from myriad back-end administrative and production systems.
"To have a good strategic solution, you need to be able to understand your suppliers, customers, and organisation," says Greg Wood, solutions manager for data warehousing with SAS Institute Australia.
"Data warehousing is very much about structuring data in a form that's good for answering specific business questions, and taking away the overhead for answering those questions."
By asking the right questions, some BI deployments have effectively become smaller, interactive versions of Kaplan and Norton's balanced scorecard philosophy (see www .balancedscorecard.org) This managing-by-the-facts approach is reflected in at least 28 BI tools from vendors such as SAS Institute, CorVu, Gentia, Accure, Hyperion, Peoplesoft, SAP, and Solvision. (Gartner and the UK-based Cranfield School of Management have published a comparative analysis, Balanced Scorecard Software Report, that's valuable reading for anyone considering a balanced scorecard approach.)
The balanced scorecard has yet to take off in Australia as it has overseas; it's been suggested that more than half of the largest US companies had adopted a business measurement framework such as the balanced scorecard by the end of 2000. Nonetheless, the principles underlying its success have been reflected in senior executives' growing demand for live business metrics through intelligent BI deployment.
"The Balanced Scorecard concept has created an awareness of how important it is to focus people," says Robert Zalums, managing director of Crystal Decisions Australia-New Zealand, "and how important it is for every person in an organisation to have a small set of performance indicators that focus their team on the things that are important right now. Those things might change as strategy evolves. If you manage the right things--things important to strategy and tactics--and you communicate those measures to people that can drive execution of those tactics, then you will achieve."
