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Making the tools work harder will pay off

Making the tools work harder will pay off

Business intelligence software and access strategies are increasingly de rigueur in the corporate world.

Every day the average Australian manager spends 67 minutes searching for information to help them do their job. Never mind that most of the data is available on corporate information systems - the challenge is still finding it. A survey commissioned earlier this year by Information Builders found that in spite of this inefficient search for information, fewer than one in five organisations were using business intelligence tools to access corporate data. Yet 59 per cent of survey respondents believed better access to information would boost their productivity and performance.

Small and medium enterprises, often narrowly focused in terms of the products or services they sell, have traditionally relied on spreadsheets for most of their business intelligence. But as the business or product range grows, management by spreadsheet becomes part of the problem. Having a lot of information isn't the same as having the right information.

Larger enterprises have pioneered the uptake of business intelligence tools and techniques, according to Gavin Cooke, director of Altis Consulting, which advises companies on information access strategies. He says this has been because the return on investment is more obvious for the bigger user. Large companies also often have dedicated teams of IT professionals who can go to work on a business intelligence application.

However, he believes that the same issues mean small and medium-sized enterprises can be more successful than their larger counterparts when they do embrace BI, simply because they are more rigorous about identifying where the return on investment will come from, and also because the people who are involved in scoping and selecting a business intelligence solution understand the business, not just the technology.

Cooke says that, in addition, small companies often have much simpler, often vertical information systems to start with, which makes overlaying some business intelligence tools relatively simple.

BI suppliers have recognised the broader market and begun rolling out versions of their systems which are properly tailored for smaller companies rather than just cut down versions of big enterprise tools.

Oracle has launched a business intelligence system aimed at businesses with 5 to 50 employees; Cognos has developed one aimed at companies with 50-plus employees; Business Objects has followed suit with its Crystal Reports; and Microsoft has built business intelligence capabilities into its products.

According to Cooke, the companies that stand to benefit most from rolling out business intelligence tools and techniques are those "which have lots of data and products and services are changing rapidly".

But he warns that it is important when selecting a tool to remember that "good business intelligence should reflect how your business is run, not how the application is set up". Shoehorning a business intelligence application into an organisation tends to be counterproductive.

For McGuigan Simeon Wines, the challenge of accessing valuable business information has been compounded by its thirst for mergers and acquisitions.

According to chief information officer Ryan Klose, the need for a business intelligence approach to information access was telegraphed five years ago when McGuigan and Simeon merged, "both with legacy systems and very disparate". To get at information needed to steer the business at that time was "very heavy on the accounting staff",he says.

After merging, the company continued along the acquisition trail making business intelligence even more important as "you generally only get a short time to make the company you've just bought profitable", explains Klose. Because of the different information systems which were also being acquired, Klose decided to implement Cognos Series 7 and PowerPlay for information reporting and analysis. Klose himself "began putting together databases to populate the PowerPlay cubes on a nightly basis".

Over time, the key performance indicators which determine how data is analysed have been refined. The company can now use the cubes to analyse its export sales, domestic sales, accounts renewable, general ledger, production planning and forecasting and stock management.

"The four key components of the KPIs are profit, cost, volume and service and they drive every KPI in the business," says Klose.

A planned upgrade to Cognos 8 will mean that information about those four components can be sent out to the chief executives on demand. Klose is convinced of the value of business intelligence, saying he believes having access to accurate information on demand has allowed the business to grow quickly.

But he warns that to achieve any benefit from business intelligence, companies have to ensure that any data they capture and make available through analysis reports are meaningful. Also, that the KPIs they track are pertinent to the person they are provided for - so the KPIs tracked for line managers are different to those for CEOs and so forth. "Start with the CEO and work out what he wants, then roll it down," he says. "You've got to get that right first."

Tailor-made

• Small and medium enterprises have traditionally relied on spreadsheets for business data.

• BI suppliers have begun rolling out versions of their systems tailored for smaller companies, not just cut-own versions for larger companies.

• It is vital that BI KPIs target the correct staffing level.

Australian Financial Review

© Fairfax Business Media

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