Business Intelligence for SMBs Business Intelligence (BI) technology, tools, and applications help companies gather, analyze, and store data that business leaders and employees can use to make informed decisions. BI as an overarching term that encompasses “a variety of software applications used to analyze an organization’s raw data. BI as a discipline is made up of several related activities, including data mining, online analytical processing, querying, and reporting.” BI technologies can reveal historical, current, and predictive views of business operations. With the aim to support better business decision-making, a BI system is often referred to as a decision support system (DSS). The concept of BI emerged as early as 1996, Information Democracy will emerge in forward-thinking enterprises, with Business Intelligence information and applications available broadly to employees, consultants, customers, suppliers, and the public.” The report pointed out that staying ahead of the competition in a thriving marketplace is key to success. Businesses must make decisions based on accurate, current information—not intuition or collective hunches. The report proffered that: “Data analysis, reporting, and query tools can help business users wade through a sea of data to synthesize valuable information from it—today these tools collectively fall into a category called ‘Business Intelligence.’ ” Demystifying Business Intelligence In the past, businesses may have been able to succeed by basing decisions on gut feeling and intuition along with simple observational data, today companies have “unimaginable amounts of information available to guide business moves. And big business has been trying to harness that animal since the early 1990s when the term ‘data warehousing’ started becoming in vogue.” Essentially, enterprises explored how to get data out of their operating systems and into the hands of decision makers without bogging both—the systems and the people—down. In the past two decades, BI vendors have made great strides in doing just that, believes BI can help SMBs compete with larger shops as well as increase market share: “When done properly, the analytics can provide insights into trend analysis that otherwise can’t be seen. BI can also provide insights in to the cost of acquiring new customers over time, and how those costs are related to ‘customer gain or loss.’ BI vendors are designing solutions that are easier for business users, no matter their department or position on the org chart. “Newer generations of BI are showing real promise in terms of usability, “The ‘users’ of these tools are increasingly people who are one or even two generations younger than those of us who started this party. They will not tolerate the quality of the legacy tools. Their experience is not in enterprise software, it’s the consumer Web, where things are engaging and actually work without a three-day training class.” Business Intelligence: The Business Case explains that BI is “more than just corporate reporting and more than a set of tools to coax data out of enterprise systems.” Companies not only leverage BI to improve decision making, but also to surface new opportunities and cut costs; can identify inefficient business processes in need of re-engineering by using BI to help surface stale operations, slowdowns, and bottlenecks. “With today’s BI tools, “business folks can jump in and start analyzing data themselves, rather than wait for IT to run complex reports. This democratization of information access helps users back up—with hard numbers—business decisions that would otherwise be based only on gut feelings and anecdotes.” Despite the promise that BI holds, real-world implementations can be “dogged by technical and cultural challenges, “Executives have to ensure that the data feeding BI applications is clean and consistent so that users trust it.” For small to midsize businesses, large BI solutions can seem impractical and financially out of reach, causing some to choose the “path of least resistance.” To leverage BI-like analysis and improve business decisionmaking, a number of SMBs use Excel to achieve their analysis needs, without making a financial investment in a BI solution. Like its Microsoft Office cousins, Word and PowerPoint, Excel is de rigueur software in businesses around the world. And in offices that lack a formal Business Intelligence (BI) solution, Excel often becomes the go-to tool for compiling and analyzing business data. “Excel is arguably the most widely used BI tool in the world. “While many consider it to be ‘just a spreadsheet,’ Excel houses many organizations’ financial reports. In fact, Excel thrives in the absence of true BI applications.” As a de facto (or, in some cases, default) BI substitute, the allure of relying on Excel for BI-like functionality in understandable. Excel’s simple interface allows users to easily accomplish tasks such as calculating, presenting, and displaying numerical data. “Such functionality is so commonly needed by business users that Excel, as a part of Microsoft Office, is installed on nearly every single desktop and laptop, as well as many mobile devices, around the world,” It is a standard utility tool given to practically every information worker the day they start their first job, though, that Excel is best classified as a BI tool—and it makes a poor substitute for a legitimate BI solution. Effective Business Intelligence begins with consistent, high-quality information. Utilized by business users, the quality of the “intelligence” can hover in the dangerously low range and be the basis for bad planning and faulty decision making. Poor BI is especially perilous in heavily regulated industries that must adhere to strict compliance legislation. The danger in what he terms an all-too-common scenario: “Business analysts develop Excel spreadsheets to assist with the day-to-day operational decisions that their jobs demand. Pleased with the autonomy and sophisticated analysis that Excel supports, they share their innovations with colleagues, who then modify the spreadsheet logic and manually tack on data from their own information. “Over time, rogue spreadsheets with data from multiple dubious spreadsheets are propagated throughout the organization, and executives find themselves making decisions based on untraceable, questionable data.” In this situation, the enterprise is unable to audit the data trapped in the spreadsheets (their reports) for themselves or for regulatory agencies. At the same time, IT “has complete, auditable, and backed-up operational system data that is untapped by the Excel user community,” he explains. “Excel was never intended to be a BI tool. It is not Excel that is at fault, but rather its use as a BI tool. Much of what is found in Excel spreadsheets is put there through a manual, error-prone, process, which should never be the case with BI. BI applications should only utilize data from reliable, trustworthy sources.” BI: Market Landscape explains that, although BI began as a technology geared to large organizations with big budgets and lots of IT support, SMBs can now get in the game. “The good news for small and midsize businesses is that BI has gone mainstream and that trend has led to plenty of low-cost, easy-todeploy, and easy-to-manage BI options. “There are desktop-analysis tools that enable power users to distribute reports, dashboards, and data visualizations across your organization. There are quick-todeploy software-as-a-service (SaaS)-based systems that can grow with your organization. And then there are the scaled-down suites from the biggest BI vendors that give you the essentials of BI at a lower cost, principal consultant with BI Leader Consulting, points out, vendors are getting better at making software that’s easy to use and affordable. Although it’s not always been the case with BI tools, “things have evolved rapidly and … newer technologies such as open source, cloud, in-memory technology, Web 2.0 interfaces, and new visualization technology are making BI tools much more friendly to SMBs, agrees that today’s BI is quite accessible for the average business user: “With origins in COBOL-based, green-line reports in the 70s and 80s, BI has evolved into a complex market comprised of tools and platforms. Whereas COBOL required IT involvement and months to generate a single report, today’s solutions are targeted toward business users and boast real-time reports. According to Forrester Research, enterprise BI models that are too heavily IT-centric are unsustainable. As businesses increasingly need to develop BI capabilities, they will need to adopt self-service BI tools and methodologies in order to succeed, Forrester reported. The drivers of this move toward self-service BI are twofold: BI requirements change faster than IT can keep up. Even large IT outfits with the newest tools often have to struggle to keep up with business requirements for BI applications. The report added that—unlike other applications such as CRM and ERP—BI applications have a short lifespan and can become outdated very quickly. Coming to “Terms” with BI As with any technology, learning the related Business Intelligence will move you along the learning curve and give you a better understanding of how elements of BI fit together. The following list, while not exhaustive, will give insight into some basic terminology associated with Business Intelligence: Analytics: Discovering and communicating meaningful patterns in data is the heart of analytics. By applying statistics, computer programming and Operations Research, analytics provides a multipronged approach to business problems. Analytics generally relies on data visualization methods to represent insights. Benchmarking: Comparing one’s business processes and performance to competitors or best practices from other industries constitutes benchmarking. The most typically measured dimensions include quality, time, and cost. Business performance management (BPM): BPM relies on using a set of management and analytic processes to enable business managers to attain a business’s goals. BPM is also known as business performance management, corporate performance management and enterprise performance management. Complex event processing (CEP): Complex event processing is a method for combining data from multiple sources to understand events or patterns that suggest more complicated circumstances. CEP allows business leaders to surface meaningful events (including both opportunities and threats) then respond to them quickly. Data mining: Data mining is the process of discovering new patterns in large data sets. Utilizing artificial intelligence, machine learning, statistics, and database systems, data mining aims to pull knowledge from existing data and transform it into a human-readable format for further use. Online analytical processing (OLAP): OLAP is a method for obtaining answers to multi-dimensional analytical (MDA) queries. OLAP is typically used in business reporting for sales, marketing, BPM, financial reporting, budgeting, and forecasting. The phrase was created as a modification of the database term. Predictive analytics: Predictive analytics uses modeling, machine learning, data mining and game theory to analyze current and historical data in order to predict future events. Much like predictive analytics, prescriptive analytics relies on big data, mathematical sciences, business rules, and machine learning to make predictions; it differs in that it includes suggestions and options on how to best take advantage of the predictions. BI Vendor Checklist Before embarking on your BI initiative, do your homework. Software as a Service (SaaS) Options: Conclusion Because BI is about working smarter not harder what SMB wouldn’t want to take advantage of Business Intelligence? The real challenge for SMBs, is acquiring BI software on slim technology budgets, then deploying and maintaining systems with limited IT support. Luckily, he adds, a number of vendors have responded with BI options geared to smaller and growing companies. Some vendors offer “no-cost and low-cost tools that let users develop and share easy-to-understand data visualizations;” some vendors are aimed squarely at midsize market; and even some of the big players offer scaled-down iterations of their enterprisefocused BI suites. BI Leader Consulting’s that few have truly robust BI installations, but that’s changing rapidly. “Delivering BI for SMBs has been a challenge because BI has to be fast to deploy, affordable, and brain-dead easy to use. This has not always been the case with BI tools, but things have evolved rapidly, and there are now vendors that can deliver an entire solution that is quick to deploy at a reasonable price.
Posted on: Sat, 15 Jun 2013 18:51:52 +0000
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