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SPECIAL ADVERTISING SECTION
Making Profit Out of Data Business intelligence helps the data in existing systems generate additional revenue. 
Any company that does business accrues data. And that data is everywhere in the business, stored in locations that can be continents apart and can range from banks of filing cabinets to disparate databases to the heads of long-time employees. That data is a valuable resource and it likely is an underutilized one, as well. When information can be converted into intelligence that benefits the top- or bottom-line, the business value can be enormous. Companies that can analyze precisely what they know about their customers and business partners, their supply chains and their operations are then able to make decisions that cut costs, speed time-to-market and increase revenue.
Penske Logistics maintains a fleet of more than 2,500 trucks. Thanks to its business intelligence (BI) system, executives are able to monitor performance using data drawn from five business systems, including one that tracks its trucks on the road. The combination of an extranet and Web Intelligence--an integrated query, reporting and analytical processing tool from Business Objects--makes it possible for Penske Logistics to not only deliver company intelligence to company decision-makers but also share that daily logistics data with key partners. The Web Intelligence/extranet system delivers a competitive edge for the company by supporting a much more intimate partnering with customers, sharing with them all the company's internal performance and efficiency analyses. "We're wearing our business on our sleeve," says Tom Nather, senior systems analyst for Penske Logistics in Cleveland. "If something goes wrong, we can help our customers understand why and we can correct it." Defining Business Intelligence Much of the data that companies possess is generated from business systems--from transactional, customer relationship management (CRM), financial and enterprise resource planning (ERP) tools. Unfortunately, though, the data from each business system is likely to be stored in associated databases, which means that the information needed to analyze company business patterns is scattered. That makes it virtually impossible to pull data together quickly to produce a multifaceted picture of customers, partners, suppliers or business events. Business intelligence systems were developed to help companies access, analyze and, above all, use the data they collect. Deploying a BI system thus involves identifying the places where that data resides and frequently "cleaning" it, as well, so all the references to a customer or supplier follow the same format. BI systems often centralize selected data in a large, specially designed database called a data warehouse. Anyone with access to the BI system can ask questions about business performance. And BI systems make it not only possible, but easy to do both historical and forward-looking analyses of business patterns quickly. How is it known whether a company needs a BI system? Rob Stephens, a business intelligence strategist at SAS Institute, a business software systems vendor in Cary, N.C., suggests this yardstick: "If two different vice presidents in two different divisions go after the same data and come up with inconsistent results, then you need to do something." Business intelligence is about getting good operational control over your business to maximize top-line revenue growth or to control customer costs, says Sanju Bansal, chief operating officer at MicroStrategy, which sells business analytics products and services from its headquarters in McLain, Va. He notes that when a company has the ability to know who a customer is, for example, a sales rep or customized Web page can use that intelligence to maximize cross- and up-selling opportunities. Effective integration of data sources is critical to an effective BI implementation, says Keith Gile, a BI specialist who is senior industry analyst at Giga Information Group in Norwalk, Conn. "Effective" is the key term, because the technology needs to deliver to executives both an integrated picture of business processes and whatever specific analyses of the underlying data the executives need. "BI technology," notes Gile, "should invite me into the process." And the technology must deliver both data and analyses in the timeframe the business requires, rather than what the business systems allow. In other words, business needs must drive the technology. Benefits of BI The benefits of business intelligence can be as varied as the business plans of the companies that deploy it.  For Los Angeles-based International Rectifier, the oldest dedicated semiconductor manufacturer in the world, it was a single analytic tool that allowed it to develop both a single standardized definition of and a usable source for key business metrics such as revenue.
"It made a big difference for us," says Doug Burke, International Rectifier's senior manager, financial analytics. Now, he says, if a key metric is wrong, it's wrong in one place and can be fixed in one place. Since the company is, in Burke's words, "in acquisition mode," having this capability "has really made a big difference." The analytic tool used was Essbase, from Hyperion Solutions Corp. Fossil, a Richardson, Texas, fashion accessories company, was looking for a way to manage and speed up its forecasting, budgeting and consolidation processes. Executives judged these changes critical; budget creation was taking months because of Fossil's distributed operations and the multiple stakeholders involved. Deployment of the Cognos Finance tool gave the company a means to both simplify its financial processes and accelerate financial reporting. Since time is literally money, Fossil is realizing immediate value through its ability to accelerate its financial processes. For Briggs & Stratton Corp. of Wauwatosa, Wis., the challenge was to figure out how to continue to manage its manufacturing processes without allowing the company's key ERP system to choke on the massive amounts of operational data it generated. B&S worked with SAS Institute to craft a data warehousing strategy that moves data from the operational system while keeping that historical data ready at hand. As a result, the system allows the company to continue to track via the Web the cost-effectiveness of its vertically integrated supply chain. Sprint's driver toward BI was as straightforward as it gets. The $23-billion, Westwood, Kan.-based, global communications company needed to be able to gather all the data about customers in its multiple data sources and analyze it to support sales and marketing efforts. When the BI system went live in the fall of 2000, Sprint officials report, it significantly improved the company's ability to not only roll out but be able to track on-the-fly, the effectiveness of campaigns to both attract and retain customers. Starwood Hotels and Resorts Worldwide faced a similar challenge. With six different brands and more than 700 hotels in more than 80 countries, the company had lots of data flowing into its White Plains, N.Y., headquarters. Executives in several key positions needed analyses of that data to guide their resource commitments. Out of that need grew a deployment that replaced slow-turnaround third-party analysis and reporting with an effective, real-time, distributed decision-support system. As International Rectifier, Fossil, Starwood Hotels and Resorts Worldwide and other companies have realized, it is important to distribute up-to-date information about an enterprise to many layers of the organization. 
That realization is hardly a new one, though. Indeed, one of the abortive trends of business computing a decade ago was the Executive Information System--a category of executive tool that failed to catch on because it lacked an effective underlying BI system.
The efforts to make data consistent from different departments and various subsidiaries--as well as partners, suppliers and major customers--is continuing to fuel the longstanding hunger in executive suites for both operational and strategic intelligence. "The trend is to drive the power of information to the desktops of all the leaders and managers of an organization," says Mike Morini, chief operating officer of OutlookSoft Corp., a Stamford, Conn., vendor of analytic software tools. "By bringing consolidated financial information to the manager's desktop, in a collaborative way, they are able to act on that information in real time. That nimbleness provides more value to the organization." And, MicroStrategy's Bansal notes, the state of business in recent months has been a driver, as well. "People are looking at cutting the bottom 20 percent of everything. But companies need to get visibility of those expenses first, then cut them. That's why business intelligence software has held up better than most items in this environment." From Workgroup to Enterprise Companies are collecting huge amounts of data from all aspects of their operations, notes Craig Brennan, president and CEO of Brio Software Inc., a business performance software vendor in Santa Clara, Calif. But, he notes, "most don't do much with the data to improve their performance or make better business decisions." 
Much of the activity in the BI marketplace results from attempts by companies to integrate what can be a motley array of individual department- or workgroup-based BI tools to yield unified, companywide intelligence. As Dave Kellogg, senior vice president of marketing at Business Objects, a BI vendor in San Jose, Calif., observes, "business intelligence has largely been departmental technology. CIOs are waking up to fact that they have gremlins, in the form of all sorts of little BI systems deployed." Why, Kellogg reports those executives are now asking themselves, are we buying from all these vendors and training all these administrators?
For Sprint, the path to BI was a business plan that required the company know as much as possible about all its customers. Acting on that mandate meant the long distance services provider had amassed a huge array of data sources. When the company set out to rationalize its business intelligence infrastructure, reports Flint Craver, the Dallas-based systems development manager for Sprint, it worked with SAS Institute to extract data from as many as 35 different databases, ranging from old-style flat files on mainframes to SQL databases running on Microsoft Windows NT servers, into one massive central repository. "We're seeing the building of a second wave of business intelligence," reports Andy Handford, vice president for products at Crystal Decisions Inc., a reporting, analysis and information delivery products company in Vancouver, B.C. "It consists of simplifying, consolidating, broadening. Companies now are asking, 'How does this all fit together?'" Gartner Group Analyst Howard Dresner says he sees BI investments today being driven by the desire to both standardize and consolidate technology to make measuring company performance more effective. From the perspective of the executive suite, the point is obvious: If executive managers cannot evaluate performance enterprisewide using common yardsticks, they cannot easily make tactical--much less strategic--decisions. Gaurav Dhillon, CEO of Informatica Corp., a Redwood City, Calif., data tools vendor, sees the same phenomenon--the centralization and standardization of data management--in hardware terms: "In the future, broad deployments of BI technology will shift toward the server side of the house."  Boston Properties Inc., a large commercial real estate company, needed to consolidate data in its J.D Edwards ERP system, which handles more than $1 billion in tenant billings annually, with other data residing in a distributed IBM Lotus Notes/Domino workflow system and in SQL databases. Its goal? To deliver consolidated, rationalized information to almost 100 locations.
For its BI tools, Boston Properties worked with Crystal Decisions. According to Jim Whalen, the real estate company's senior vice president and CIO, a 10-person prototype was up and running in three weeks. At the end of three months, between 60 and 70 employees had access to the new system. Boston Properties currently has 170 licenses and expects that number to grow. "Companies like Boston Properties are most successful when they reduce the issue of taking control of their data to, 'What's the common need here?'" observes Crystal Decisions' Handford. "It usually comes down to something as basic as adding value to data reporting and getting that added-value information out to the right people." Toward the Executive Suite Over time, the business intelligence procurement process is moving up toward the executive suite. As senior executives demand systems that will give them performance metrics--and particularly warnings of looming problems--in real time, departmental BI tool deployments are giving way to RFQs for enterprise systems, reports Henry Morris, International Data Corp.'s Framingham, Mass.-based vice president for applications and information access. "Business process management is a C-level undertaking because it is an overall measurement and an early warning about business performance, rather than a very specific function like quality analysis." The increased scrutiny of financial reports by Wall Street and regulators has put a premium on "better and more precise information," OutlookSoft's Morini adds. Stamford, Conn.-based Hyperion Solutions' CTO John Kopcke agrees that BI acquisitions are now being viewed as enterprisewide and handled at a more senior level. C-level executives, he says, are now looking toward BI to leverage their back-office IT investments, which still aren't delivering promised returns. But Crystal Decisions' Handford looks at it more in terms of creating a least-common-denominator platform that delivers base-level BI functionality as a starting point. "We've seen phased deployments be very successful, where they disassemble it down to the common denominator of a set of useful, accurate reports on which I can then start to build personalization, security, interactivity and ad hoc analysis," he notes. Building an infrastructure on top of which people can selectively layer analysis and reporting tools to satisfy their needs is, Handford says, the better way to go. Karen Williams, director of product marketing at Cognos, an Ottawa, Ontario, enterprise BI software provider, notes that two of the areas in which a BI deployment can offer a value-add are financial reporting and CRM. "Many of our customers are starting to take some of their strategic goals and change those into metrics, then taking those metrics and deploying them to their users so they can track their performance within the organization. Once they see what's happening, what they require is reporting and analysis tools to really understand why whatever it is, is happening. So what they're doing is taking a broad range of business intelligence and focusing it on their core strategic goals." Brio's Brennan agrees that "performance monitoring is definitely a component of business intelligence." You can do that in many ways, he notes, among them performance measures, operational measures and triggers of various kinds. Integrating Data Another aspect of corporate intelligence that will loom ever larger in the future involves dealing with data that isn't in a database-friendly format. There will come a time when "integrating data" means more than just being able to draw connections between pieces of information in two different databases. Linking relational data with the contents of a PowerPoint presentation or a Word document will represent a huge qualitative step forward toward true BI and toward the Holy Grail of an enterprise knowledge management system. "There's a big drive to bring structured and unstructured data together," Morini says. "Linking the two together provides a documentation trail during the budgeting process. But you need a single unified approach to do that, a unified way to view information in various systems." For the moment, though, corporate executives who have been through the BI tool selection and deployment process urge that those currently contemplating it "not be driven by the flash," in the words of Briggs & Stratton Corp. project manager Grant Felsing. The key, says Felsing, is not the tip of the iceberg--browser-based graphs and so on--but the iceberg itself. The operational data store is the crucial component, he says. Users need to make sure that the time is spent to understand what that iceberg will look like. "You're building a foundation you'll deploy several tools on top of. If you have that infrastructure in place, you'll be able to take advantage of it as opportunities to benefit from that analysis come along." A foundation for what? The key to successfully implementing a BI system that will deliver a competitive advantage, says Edward J. Courtney, KPMG Consulting's managing director and chief knowledge officer, is to understand clearly what result the company is trying to achieve with the implementation. "Are you trying to gain a better understanding of your customer's buying patterns by analyzing sales data, or are you trying to improve your win rate by gaining insight on your chief competitor's pricing?" Courtney asks. Without clearly articulated goals, he warns, executives face the trap of simply collecting data or running reports that not only offer no value to the business, but are extremely resource-intensive to support.
This business intelligence special advertising section was prepared for BusinessWeek by Triangle Publishing Services Co. Inc. The Best Strategic Content for Web, Print, Multimedia and Beyond www.triangle-publishing.com 617-244-0698 Triangle is a leading content provider of business and technology editorial for publishers and vendors. Triangle delivers print, Patent-Pending online and multimedia products, as well as a wide variety of publishing services. Business Intelligence Section writer: Alan S. Kay |
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