Why Companies Need Business Intelligence - Part 1

Business Intelligence BI Software Articles : Why Companies Need Business Intelligence - Part 1 Author: Jose Allan Tan

"We need information but all we have is data!"

This is the message managers often complain about. If there is anything that IT has ever done right it is the ability to collect nearly every single bit of data imaginable -- from data that is written or keyed-in to a computing device, to images like signatures and X-rays. We even record voice and video these days.

One manager told me over coffee: "I've got data coming out of my ears. I don't know how to make sense of it!"

Part-time solutions have been around for many years. I say "part-time" because the solutions solve only "part of the problem, part of the time." Product marketers have labeled these as business intelligence (BI) tools.

Wikipedia defines business intelligence as applications and technologies which are used to gather, provide access to, and analyze data and information about their company operations.

The goal of BI tools is to allow anyone using the information provided to make better business decisions. But there are a few problems with traditional BI tools.

BI is mostly associated with report delivery. Usually there are few people within an organization who actually know how to use BI tools. These users hold on to this 'control' because they probably get a kick out of the power they have over others.

More importantly, such specialty creates job security. But the net effect has been dissatisfaction with what was purchased, and concern over making further investments in the future.

BI tools' failure rests in the business unit's failure to communicate their needs and IT's failure to ask the right questions. The result is solutions that fail to deliver expectations.

"Previous perceptions of BI didn't factor the value provided in managing and making sense of the information assets contained within every enterprise," says V.R. Srivatsan, vice president of Asia South for Business Objects.

"However, this is changing as both technology and the business will with which to use it are maturing resulting in BI becoming a key business process driver within today's enterprise," Srivatsan adds.

BI wish list

Suganthi Shivkumar, managing director for ASEAN & India at Hyperion Solutions, notes that business managers want tools that give them increased insight into the dynamic nature of the global marketplace and allow them to identify areas of profitability.

They expect IT to unlock information that is potentially trapped between silos of applications scattered throughout the enterprise.

"Today's regulatory institutions and business climate are very unforgiving towards any kind of expectation variances or financial discrepancies that may be construed as malfeasance or misconduct. This forces companies to put a lot of rigor in their planning and reporting processes. To produce reports with confidence is critical in the choice of BI tools," Shivkumar says.

Having a single version of the truth is also just as important. Finally organizations want to have clear visibility of their operations including accurate demand-revenue-expenses forecasts to better deploy resources and capitalize on opportunities.

Business intelligence has emerged as a strategic initiative and investment priority for companies. But because departmental objectives vary, it would be easy to lose sight of the core objectives of the company and to deploy BI tools (sometimes from different vendors) to satisfy those needs.

The net result of such a strategy is a proliferation of disparate systems that not only do not effectively inter-operate with each other but complicate the matters.

The good news is that despite all the not-so-glorious past of BI tools, CEOs still believe that BI tools play an important role in today's competitive environment.

Global competitive pressures, and mergers and acquisitions are putting constant pressures on restructuring and finding additional sources of profitability. CEOs want insight to help them steer the business through these turbulent times.

For decades companies have been spending millions on enterprise resource planning (ERP), customer resource management (CRM) and data warehousing (DW) tools. With so much information locked in repositories, CEOs are putting pressure on IT to unlock information trapped in those systems.

After Enron, it's no longer enough to produce reports on time. Accuracy and consistency of reporting have become paramount and discrepancies can mean jail time for even the rich and powerful.

Source: http://www.articlesbase.com/information-technology-articles/why-companies-need-business-intelligence-320561.html