Why Your BI Investment Isn't Paying Dividends
How can BI deliver on its promise while enabling the real-time capability required by today's business users?
By Glenn Wirick, Vice president of product management at InsightSoftware.com
How often have we heard enterprise executives lament the vicious and repetitive cycle when implementing business intelligence solutions? Perhaps you're familiar with the cycle yourself. It starts with a smart managerial decision to drive decisions based on accurate, measurable data. From marketing to finance to supply chain management, executive teams are hungry for numbers-based evidence to frame and support their business decisions.
Based on that mandate, the functional teams begin implementing new BI solutions that are supposed to provide the real-time, drill-down details that make management teams swoon. Unfortunately, disappointment often follows shortly after, as the BI solution fails to live up to expectations and the cycle starts all over again.
For certain functions (including marketing and customer service), many BI platforms have proven effective in responding to management needs. Where we truly see the vicious cycle of failed BI is in finance, accounting, and operations. These areas in particular are not producing the dividends that a BI investment should return.
The reason for this shortcoming is that BI solutions merely produce a snapshot of yesterday's data, one or two layers deep. Of course, such snapshots can prove useful. After all, with many BI solutions, even a snapshot provides more information than leaders had before. The 50,000-foot trending view is precisely what management needs to see -- for example, improvement in customer satisfaction or the popularity of a new consumer pricing model.
However, what typically happens when leadership is shown a snapshot of finance or operations? They request more details to dig even deeper. Like an impressionist painting, once you see the overall picture, you want to step closer to analyze the strokes and colors that compose it.
This is where IT must further build out the BI solution. In many cases, this build-out consumes too many IT resources and still comes up short in delivering what day-to-day users really need -- simple, real-time access to live information.
The business then continues to pressure IT for meaningful business answers, so IT works to further build out the BI solution, consuming more resources -- and so the cycle continues.
The reason there has not been a good solution to this endless cycle of BI implementations that fall short of ongoing user requirements is because BI as we know it is not designed to do what most people think.
BI was never intended to provide drill-down-in-every-direction, real-time access to every bit of company data available. In reality, BI was developed to provide trending data to executive staff based on a defined set of metrics or key performance indictors. Yet, more often, management teams are requesting the nitty-gritty detail and the analysis behind it because they need to manage a nimble business that pivots with global and immediate market demands. When businesses want the drill-down data, they are usually sorely disappointed in the inability of their BI solution to go broad and deep.
The answer isn't to give up on BI, and it certainly isn't to spend resources implementing an ever-expanding BI footprint. Instead, the remedy to the vicious BI cycle is to research and implement complementary tools that offer flexible reporting over ERP systems. Companies should consider real-time reporting as part of their BI strategy. This approach allows BI to deliver on its promise while enabling the real-time capability required by business users.
For most businesses, the backbone of the company is the ERP system, which holds all the detailed data business users seek. What's missing is the ability to easily pull that information into a BI-like report that is suitable for management review.
In fact, there are ways to implement a more structured BI reporting tool that integrates with your ERP. Take the example of The Leukemia & Lymphoma Society (LLS), the world's largest voluntary health organization dedicated to funding blood cancer research and providing education and patient services. As avid JD Edwards users, LLS was able to find a tool to help with its tax preparation and compliance reporting -- two essential financial processes in which they needed additional business intelligence.
"With economic uncertainty, we need to scrutinize our results and financial data even more closely," said JR Miller, vice president of finance for LLS. "Real-time access means we can access current data, not just year-to-date or month-end as in the past." LLS now has immediate intelligence to variances, and they can act quickly to make adjustments to proactively control expenditures.
Another company that used this approach is Interstate Batteries, a multi-million dollar corporation headquartered in Dallas. With approximately 50 Interstate-owned distributorships supported in JD Edwards, the management team quickly realized it could not analyze business results across the company's many locations. There was no efficient way to summarize information at a business unit or category level across multiple entities. Although the company tried to devise its own solution and looked into other BI solutions, as the company grew, managing any type of manual BI reporting tool was impossible. Again, a flexible ERP-aligned reporting tool was the solution.
As these examples illustrate, software with "business intelligence" plastered on the package isn't always the right solution to enable the business. True business intelligence is gained from solutions that seamlessly combine summarized views, with real-time end-user reporting, especially in the areas of finance and operations.
For this reason, corporations requiring BI in finance, accounting, inventory management, operations or other function areas, could have better results with a flexible reporting tool that integrates directly with their ERP. When companies look at their BI strategy as the tool to slice and dice data in any manner they choose, suddenly BI labels as we know them become less important, and we realize that true intelligence in business can only be derived from having real-time access to information in a form that makes sense for business users.
Glenn Wirick has worked with and implemented large-scale ERP software for over 15 years. Working for JD Edwards, IBM, and a boutique consulting firm, he has extensive experience with data warehousing and business intelligence implementations using Cognos and MicroStrategy, including senior project responsibility for the global rollout of the Insight Software Suite at Chevron. In his five years at InsightSoftware.com, Glenn has worked as a product specialist, director of consulting services, and is now the vice president of product management. You can contact the author at firstname.lastname@example.org.