IT budgets are not immune to the recession, having come under pressure as cost-cutting measures sweep through organisations. However, one area appears to be thriving despite the deflationary times, or maybe thanks to them, if Gartner is to be believed: the market for business intelligence tools.
MIS100 organisations list business intelligence as their third top-priority projects over the coming year.
As BI can provide the information necessary to ameliorate the effects of the recession, CIOs are being asked by their organisations to improve and make the most out of their implementations.
Rank Group: Consolidate disparate systems as soon as possible
Graeme Hart’s Rank Group is no stranger to large acquisitions and, therefore, it is experienced in consolidating the often disparate systems and data repositories that are inherited through the deals.
The CIO of Rank Group, Pat O’Connell, says his organisation’s BI implementations come “at a logical time in the business cycle” as the Rank Group has made a number of acquisitions worldwide that need tidying up.
Taking a recently finished implementation at the acquired Carter Holt Harvey Building Supplies as an example, he says BI is independent of a recessionary environment.
In fact, O’Connell believes “now is a very good time to do it, as MIS has the attention of the business” as opposed to when the company is performing well and everyone is busy with sales.
BI is seen as an investment to get better returns from the entire business, he says. On the other hand, cost savings are normally sought from operational expenditure, meaning BI projects tend to go ahead in healthy enterprises despite the tough times.
The main challenge for Rank has been the pace and volume of acquisitions lately. The group now uses a mix of ERP systems that are mainly SAP-based.
O’Connell says data for the BI tools comes from these ERP systems, but one difficulty is the multiple disparate ones — mini-ERPs like Movex and TIM and smatterings of proprietary data that “can be a bit of a mission”.
His advice to fellow CIOs is a warning that not consolidating at the time of the acquisition can come back and bite you. It may seem like the right thing to do to leave things as they are, because why fix what isn’t broken?
However, there will come a time when disparate systems and data need to be brought together for greater efficiencies and cost-savings and leaving this until the last minute will inevitably be more expensive and cumbersome.
It is often a hard business case to make, but O’Connell recommends that you analyse the situation, and if more points of commonality are found than points of difference, embark on consolidation. It will pay off in time, he says.
The Warehouse: Normalise data for access, don’t lock it in
The Warehouse Group is essentially a “supply chain business”, explains its manager of product and availability, Paul Carlisle. This notion guides its approach to BI, business analytics and data warehousing.
Using a demand chain management system from Teradata, built up over a decade, Carlisle recalls how 10 years ago it was seen as huge, with 100GB of storage. Now the system stores four years of branch sales data, and has “billions of records”, he says. Currently storage is at 10 terabytes, of which five is dedicated to data alone.
This massive amount of data would seem to require huge staffing resources, though Carlisle says Teradata is remarkably light in that respect; with only a small team with a DBA and development architects actually needed to manage it.
As technology progresses, Carlisle has in the past five years seen the system shrink from a six-node, Intel Xeon-based machine to a single-node Core 2 unit. Processing power is less of a concern for the Teradata system than fast storage to deal with huge data volumes.
For that reason, Carlisle and his team are looking into solid-state disk technology to further speed up transaction handling. The system is used to forecast The Warehouse’s business a year ahead, he says, providing decision-support BI on sales results, as well as order and quantity levels.
Performing core retail business functions for The Warehouse, the system is used by pretty much everyone in the organisation, Carlisle says — from stores reporting output to knowledge workers pulling data sets from it for complex analysis. Human Resources at The Warehouse is probably the only department not using the system, he says.
“We would be running blind without it.” As an example, he describes how The Warehouse has used the system to ensure that stock of continuity items – such as household items, beauty products, confectionery and automotive – are always available. With the system, the availability over a year of continuity items has gone up from 75 percent to around 95 percent, Carlisle says.
Additionally, the system is able to save The Warehouse money through stock-downs. He says efficient management of stock means the savings can be “a couple of $100 million”.
Suppliers get a look-in too, as The Warehouse uses the system to share order forecasts to ensure stock is available in stores when it is needed. “It does catch them out at times,” Carlisle says, but adds that overall, the integration has been well met by suppliers and that it helps their business too with planning.
Carlisle strongly advises that users avoid fragmentation of data. Data may be worth its weight in gold, but it needs to be normalised and not locked into and hidden away in taxonomies.
“We’re doing things now that in the past we couldn’t have anticipated doing with data,” Carlisle says, and warns against locking it up in inflexible schemes and hiding it away as desktop data not shared by the enterprise.
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