Global Economics

How Firms Use Business Intelligence


With a data explosion expected by 2010, companies must have the tools to analyze and use the information they've saved

While many might find the concept of business intelligence (BI) something of a contradiction in terms, interest in the subject reflects a growing concern for many organisations - too much data and too many problems navigating through it.

Research from IDC earlier this week warned businesses will face a data explosion over the next three years as the number of digital images, email inboxes and broadband connections doubles by 2010.

Speaking at BI vendor SAS' recent customer conference, Accenture's director of research Jeanne Harris said analysing this data is one of the key attributes of successful businesses: "Companies that are high performing are more analytical than lower performing businesses. They are more likely to have business intelligence capabilities and data that is integrated and analysed across the business rather than in silos." Companies that fail to use all their data are missing a trick, according to SAS CEO Jim Goodnight.

"The amount of data being generated is doubling every year and some think it will double every month soon. The data a business has is a strategic asset and if it's not used they are wasting a huge asset. BI is extremely important and we see it growing," he said at the conference.

"What most people think of as business intelligence is fairly simple query and reporting. We like to include the ability to forecast the future and build complex models. Why keep guessing by looking at the past when you can build models and look to the future?" he told silicon.com.

And the big areas for growth in BI? "We are still seeing a lot of interest in the low-end BI space, retail is growing considerably and banking," said Goodnight.

For example, in banking the Royal Bank of Scotland (RBS) is using SAS technology to give its branch staff a single view of the customer.

David Samson, RBS' head of performance analytics, said staff would previously have had to spend about 20 minutes collecting information from different systems about a customer before sitting down with him. Within 30 seconds of using the new iPal system, they can get a view of the customer, he said. "We've been using the SAS software to bridge the last mile," he said.

Samson said RBS is doing a 100 branch trial with further rollout plans in the next few months. "It's really accelerated cross-selling which, in the UK, is the holy grail of banking," he added.

In retail SAS is working with retailers on 'size optimisation' - so not all of a fashion retailer's stores carry exactly the same set of sizes, according to Goodnight.

He explained some will need more small sizes of clothing, while others will need more large sizes. "If you take that into account you won't have to put as much [stock] in the sale at the end of the season. It's good for the customer and good for the retailer," he said.

Supermarket chain Waitrose is using SAS technology to improve its forecasting so it can better predict demand for products.

SAS is one of the world's largest privately held software companies and Goodnight seems happy to keep it that way.

"There are public companies that want to go private now. In the US there's a lot of compliance [legislation] and that's why you are seeing more IPOs in London than in New York," he said.

In a recent survey, 85 per cent of SAS staff said they did not want the company to go public, according to Goodnight. Being listed puts extra pressure on companies, he said: "If products fail, Wall Street screams and people get laid off."

This is perhaps why SAS staff are in no hurry to see it go public: "They've seen that happen to their friends and our philosophy has been not to do that," said Goodnight.

The company is also consistently listed as one of the best to work for - which is good for the business as well as the employees, Goodnight said. "One of the benefits is the number of job applicants that we have for every job - about 200. If you are a 'best place to work' people want to work there so that cuts the cost of recruitment," he said.

He said this saves the company millions per year in training and recruiting costs - for example by keeping staff turnover at around four per cent per year, far below the industry average.

Provided by silicon.com—Driving Business Through Technology

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