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BI implementations are driven by a variety of immediate business needs and long-range strategic goals. Organizations in pursuit of operational excellence are often motivated to promote data-driven decision making. According to BI Gleansight study, „just as often, the move to establish or enhance the BI platform is driven by a recognition of gaps in current analytic capabilities, where information that should be readily available is too hard to obtain”.

Analyzing all 273 responses received, Gleanster achieved a top 9 of the most important reasons why a company should use BI tools.

1. Make smarter business decisions.

According to Gleanster`s study, BI provides an organization with the opportunity to run its business more intelligently:

- by making the facts of the business readily available, BI eliminates guesswork.

- by making the meaning of facts and statistical trends easier to understand through techniques like visualization, BI promotes better interpretation of information.

2. Identify new revenue / growth opportunities.

Top Performers put a premium on this use of BI, finding answers to questions like:

- which products and categories are hottest now, based on total revenues or growth?

- what do customer service calls tell about customer frustrations or new and improved products and services?

3. Reduce operational costs and waste.

When it’s time to examine the budget, all companies need to know where the money is going.

- while some of that information is available in standard financial reports, BI proves its worth by allowing a drill down from high-level summaries to more detailed information.

- at a minimum, one can identify the areas with the greatest cost growth to be scrutinized and the managers whose cost control discipline deserves to be rewarded.

4. Make timely course corrections.

- by speeding the collection and analysis of key metrics, BI gives managers the information they need to make adjustments throughout the month.

5. Identify competitive threats and risks.

- by gathering the right information and presenting it in the right way to the right people, a company can expect to have an early warning system for dangerous trends.

6. Increase customer profitability.

More than three out of four Top Performers set this as a goal for their BI initiatives. Why? Because:

- one of the best applications of BI is in the context of customer analytics, specifically learning who are the most profitable customers and why.

- BI can help with the process of segmenting customers according to common characteristics and track whether changes in strategy or tactics are having the desired effect on customer profitability.

7. Improve employee productivity.

- BI systems make important and commonly requested information readily available, improving the productivity of managers and workers alike.

- BI can power a performance management dashboard that tracks employee productivity in general.

8. Reduce time to market of new products and services.

- by using BI to systematically track operational efficiency and tie it to a program of continuous improvement, you should be able to impact operational metrics like time to market.

According to „BI Best Practices Benchmark Report”, this was one of the areas where they saw a gap between Top Performers and Everyone Else, with the leading companies giving a 10% higher ranking to reducing time to market as a reason for implementing BI.

9. Measure employee and departmental performance.

- BI provides a consistent and systematic way to measure the performance of companies, departments and people.

As promised, I will begin to present the main elements of a successful Business Intelligence strategy, as its appear in „BI Best Practices Benchmark Report”. So...

Part 1: Topic Overview

As most respondents involved in Gleanster`s study said, the most successful organizations today don’t simply gather and record data, they put it to work. Why that? Because data helps them optimize everything: sales, margin, inventory and supply chains, identifies new product and market opportunities.

What BI Gleansight study („BI Best Practices Benchmark Report”) priority reveals is the fact that „BI initiatives stand out for their potential to improve corporate performance through better use of the data gathering by disparate systems”. And, furthermore, that „most BI vendors sell vertical applications that build on top of their base platform, providing a customizable starter set of analytics and dashboards for a given industry.”

What else shows this study? Well, take them in order:

1. Compared with many enterprise IT projects, BI requires relatively modest investments.

2. The foundational capabilities of BI tools are more basic, such as the ability to pull data on the fly from operational systems or analyze the contents of a more neatly organized data warehouse or data mart.

3. The every BI platform goal is to achieve „one version of the truth”, by gathering and analyzing data consistently and creating standard definitions for common measures of corporate performance.

4. BI practitioners seek to reconcile different data models and definitions in topical or divisional data marts and company-wide data warehouses.

5. BI practitioners promote standardization of the use of query tools and integration protocols wherever possible, and promote those as criteria for selecting new applications.

Therefore, the majority of respondents, who as I have shown in the first material are SVP/VP, Director, Manager & Staff, concluded that „Business Intelligence is as much about management discipline as technology.”

As Business Intelligence Group member on LinkedIn, I found a very interesting „BI Best Practices Benchmark Report”, which takes a close look at the elements of a successful BI strategy, including the drivers and obstacles, as well as the metrics for tracking and measuring success. The report also goes into detail of some of the best examples of rapid ROI from BI projects and that they are associated with tactical implementations that emphasize immediate results over perfect system architecture, as long as it is easily accessible to the decision makers who need it.

So, according to the report, most organizations today have BI tools or at least some way of releasing reports. But only fewer have a true Business Intelligence strategy. On the other hand, some of the best examples of rapid ROI from BI projects are associated with tactical implementations that emphasize immediate results over a perfect system architecture. And no matter how great the analytic technology, a BI solution is only useful if it is easily accessible to the decision makers who need it. The Gleansight „BI Best Practices Benchmark Report” takes a close look at the elements of a successful BI strategy, including the drivers and obstacles, as well as the metrics for tracking and measuring success.

The report has seven parts (Topic Overview, Reasons to Implement, Value Drivers, Challenges, Performance Metrics, Success Story, Vendor Landscape), which I will try to present them separately, in a serial way meant to convince you that in 2011, BI solutions are no longer a fad but a necessity.

Survey Stats
The research findings featured in this Gleansight benchmark report are derived from the Q3 2010 Gleanster “Lead Nurturing” survey.
There are some statistics:
- Total survey responses: 273
- Qualified survey responses: 211
- Company size: Very Small (9%); Small (36%); Medium (23%); Large (24%); Very Large (8%)
- Geography: North America (65%); Europe (20%); Other (15%)
- Industries: Software and Hardware (31%); Financial Services (24%); Retail and Consumer Goods (15%); Other High Tech (19%); Other (11%)
- Job levels: C-level (6%); SVP/VP (14%); Director (31%); Manager & Staff (49%)
- Sample survey respondents: Director, IT, Hilton; Vice President, Wells Fargo; Manager, Operations, Comcast; Director, IT, Home Depot; Vice President, HP; Marketing Manager, Safeway; Director, Operations, General Motors; Manager, Cisco;

Why is that after the successful deployment of state of the art ERP and Business Intelligence software folks in strategic areas of the company still struggle to make sense of the data?

The reason is pretty simple. Strategic Marketing is the headlights of the business; their job is to predict the future and exploit that prediction in a manner that increases market share, revenue and profitability. Their focus is mostly outside and in the future while ERP data is all about inside and in the past.

When companies populate their BI systems solely with internal data from the ERP, this only supports the back-office or day-to-day operation but it does not help folks in strategic functions. Marketing, sales or line of business management need a much wider perspective to impact the bottom line.

Marketing needs a 360 degree view of the market-business-profit reality. This includes both internal and external sources of data usually not found in the transaction system. They need to access external market intelligence to compare it with company performance metrics. This can be market and customer segmentation, updated customer and competitor merger and acquisition status, competitive opportunities, business and products under threat, market size, forecasts, etc.

In my experience, using Business Intelligence software to integrate internal and external data has always a positive change in the company’s culture, where instant access to strategic knowledge helps folks in charge of strategy to accurately answer complex business questions within minutes.

Marketing becomes an avid Business Intelligence user when the configuration of both data and BI software provides the key measures and dimensions, in a user-intuitive way, to monitor business direction against the company’s strategy. They can quickly find the root cause of problems and opportunities, with no intervention of IT or business analysts, and take immediate action faster than their competition.

by Bill Cabiro and Strat-Wise LLC

„Please visit their web site at www.strat-wise.com for additional articles and resources on the strategic use of Business Intelligence and Analytics”

A well organized strategic BI implementation transforms Marketing from Art to Science while unfolding an analytical competitive advantage that translates in bottom line impact. I found that Marketing deems BI indispensable when its deployment passes the Strategic IQ test.
I. Select ten questions you find most valuable to have answered in your organization.

II. Ask these questions independently to six people (marketing, sales, financial analyst, IT, accounting or business management) requesting confidentiality and a prompt response.

III. Keep track of the time it takes to obtain each answer.

IV. Compare the answers for quality and consistency between respondents.

Note that answering most of these questions should take a few minutes and the answers need to be consistent across the different respondents.

Sample Questions

1) Where are we more profitable: strategic customers, key customers, distributors, agents or dealers? Why? Is it due to pricing, volume or product mix?

2) What is our current market share in a particular business unit in Europe?

3) Are our differentiated brands more profitable than the commodity ones? Why?

4) Are our new products more profitable than the old ones? How much? Why?

5) Who are the top 5% of my customers that generate 50% of profits? Why?

6) Who are the customers and what are the products that drain our cash? Why?

7) How much of which product is Sales-rep X supposed to sell to each of his customers in September of next year? What will his profit margin be?

8) Why is profitability by customer / region / country / business / market segment or sales territory significantly down this month?

• Is this because we lost volume?
• Is it product mix?
• Too many price exceptions?
• Has raw material cost increased?
• Has manufacturing cost increased?
• Have freight / distribution expenses gone up?
• Combination of which factors?

9) Show me a comparative Profit & Loss (P&L) statement

• By region / country / state
• By market segment / sub-segment
• By sales representative / distributor / dealer
• By brand / SKU
• By product technology
• By customer location
• Differentiated products versus commodity products at our distributors

10) Who do our distributors, agents and dealers sell to?

• In what markets / segments / sub segments?
• What is their mark-up? / Profitability?
• What is their new versus old product ratio?

11) What does our opportunity pipeline look like?

12) Which pieces of business are under competitive threat? (By product, competitor and customer location, in units and dollars.)

13) What is each of our competitors’ current market share by segment?

Scores

• If you got less than 6 answers, they took longer than one day, or the answers are completely different; your BI deployment maybe supporting the back-office operation but it’s unlikely to drive profitable growth since most strategic decisions are based on raw data and intuition.

• If you got more than 5 answers within one hour with 50% of the analysts in agreement, you are in the right track but need to refine the process further to compete on analytics.

• If you got more than 8 answers within one hour and both analysts and casual BI users from different areas agree; your BI deployment has become a competitive advantage that allows the organization to perform strategic and competitive analysis on-the-fly while ensuring a single version of the truth.

How does your organization score?

by Bill Cabiro and Strat-Wise LLC

„Please visit their web site at www.strat-wise.com for additional articles and resources on the strategic use of Business Intelligence and Analytics”

The future of Business Intelligence is certainly bright and the chances are great, because organisations are expanding, datas are growing everywhere and managers need to maintain the control. Plus, it will take some time for those IT business solutions to enter more fully into market, because knowledge of these tools by end users is still very low. But must be changes to adapt solutions to market needs. The change must be focused on getting more user-friendly applications for end users, get a lower cost level and a licensing system that allows to give information to the entire staff of a company, without increasing cost of ownership. And with fulminant development of what is called social media, I think that there is an unprecedented goldmine of data. Why? Because customers are telling you what they want. And so you can know what people expect of your brand, who wants to test your product, who likes/dislikes your brand/product etc. But for that you have to be able to understand it. Social Media has impacts across nearly all functions of a business - not just Marketing and PR, but Sales, Service, Product Development, R&D, and many others.

So, for my point of view, next generation of Business Intelligence will be more of a hybrid, holistic tool melding BI, Enterprise Performance/Process Management and Information Management - a more singular application providing all organizational data in real-time with the collaborative advantages of event/activity streams and social utilities, putting business-critical data directly into decision-maker's hands, all on a singular dashboard. Plus, it will integrate internal data with external data (Industry Data, Social Media, Blogs ...) and it has to be mobile as well.

BI Solution is an important part of many companies as everyone today needs access to data. But what is the key element to consider before investing in any BI soultion? What things are key to be thought through and possible downsides of investing in a BI solution? Things to consider will differ between companies, because every has different architecture and requirements for a BI Solution.
According to discussions on one of the groups on Linkedin, are some things to follow before designing a BI Solution for any company:
- The current state of ERP implementation and data gathering in the database.
- Data warehouse requirements: This will bring up multiple questions based on requirements
- Reporting requirements: Operational reports, Analytical reports, Dashboards.
- Security on Data Access
- Frequency of Reports
- Distriution of Reports
This is just an overview of question you should ask before deciding on a BI Solution. What is your thoughts?

During my years of industrial marketing and sales, I learned that there is a big difference between corporate information and Strategic Knowledge.

From six different studies we conclude that approximately only 5% of employees use BI tools to perform Analytics effectively^*.

I think this is in part related to the fact that except for folks with backgrounds in science, engineering, economics or finance; most people across the company do not feel too comfortable around numbers, math or logic. I've seen this during many years of training corporate employees on the strategic use of Business Intelligence and Analytics.

Business Intelligence is often defined as the array of processes and technologies that turn information into insight and action, meaning the effective application of the broad suite of data analysis tools and analytical approaches to effectively understand, predict, optimize, and prepare to take action upon current and future business activity.
BI applications find their way into a vast range of business areas including customer relationship management, external market assessment, supply chain analysis, human resources, enterprise resource planning, financial management, research and development, as well as the various quality control activities such as Six Sigma. They employ technologies such as: data mining, text mining, geographic information systems, language translation, statistical analysis, predictive modeling, simulation, and advanced visualization.
Business Intelligence software allows companies to access their databases and deliver insights to employees, managers and business partners. The insights provided by BI then turn into actions as companies use BI applications to find new opportunities, reduce costs, reallocate resources and improve operational efficiency.
BI applications allow business persons to make informed decisions by providing timely, relevant and accurate answers to business questions. They do so with the help of analytical insights ranging from intuitive, graphical dashboards to highly formatted operational reports.

The business performance improvement cycle

Improving business performance often starts with setting priorities, by answering questions such as: Which business areas need the most attention? In which areas can results be enhanced with reasonable resources and effort?
Through the use of BI Applications, organizations gain improved insight and make more rational resource prioritization decisions each day. By monitoring business results and fine-tuning business actions, organizations create a system and culture of continuous performance improvement.
Intelligence in Business today is applied to 3 distinct and interrelated business needs – Monitoring the business, Reporting on the business, and Analyze the business. Monitoring BI applications constantly track business metrics to inform and alert the persons responsible about ongoing business activity and the decisions that might be required based on them. Reporting BI applications deliver detailed data on current and historical operational performance so managers can see what is happening across the enterprise, and how well the business is operating. And, finally, Analysis BI applications present views of the business from many different angles so that managers can uncover the causes of performance problems, uncover opportunities that the business should exploit, or predict business results.

by Iulian Lixandru

BITSoftware BI Consultant