Business Intelligence's Intelligent Leap

CHICAGO -- As enterprises move forward from the initial stages of using business intelligence (BI) to some of the more advanced stages, in which BI drives the enterprise itself or even the industry, there are some large leaps along the way rather than a smooth transition from one stage to the next, according to Jim Smith, senior sales consultant for Business Objects, who discussed the company's Edge product here this week. Edge is aimed at midmarket companies, defined as those generating annual revenue of between $15 million and $1 billion. Unlike the Business Objects product for larger firms, Edge is designed to run on a single device rather than on multiple servers, Smith says. Typically, there are several jumps that a company has to make as it progresses in its use of BI, Smith explains. Though he doesn't label them explicitly, they can be broken down as follows:

• From Information to Insight;
• from Individual to Integrated;
• from Internal to Industry; and
• from Insight to Incentive

From Information to Insight: The first comes when a BI application moves from simply informing executives about the performance of a business unit or the company as a whole to actually empowering workers to perform better. Sometimes this marks the company's move from using spreadsheets for their BI needs to using applications that enable them to run ad hoc reports, Smith says. Yet this is a small leap compared to the much larger jump needed as BI spreads from a single, early-adopting business unit to the entire enterprise. From Individual to Integrated: Among the challenges a company faces in making this second jump is that different business units may have different ways of naming similar items. "One unit of a supplier to IBM may list the company as 'IBM' in the data, while another business unit may refer to the company as 'International Business Machines.' A third may list it as something else," Smith says. Similarly, individual departments may have different measures or definitions for different data elements. The definitions have to be uniform in order to get an accurate picture of enterprisewide performance, according to Smith. A BI application can help managers by including definitions of different terms in a pop-up window or drop-down menu. Enterprisewide data may provide insight that is more mission-critical than that provided by data gathered at the business-unit level, says Bill Dunn, president of Dunn Solutions Group, a Chicago-based firm that helps companies implement Business Objects technology. For example, several different business units of a manufacturing firm may each conduct a small amount of business with Wal-Mart. Taken individually, these sales to Wal-Mart may be insignificant. But combined, they could comprise a significant portion of the enterprise's total sales, Dunn explains. From Internal to Industry: Sometimes, in order to see the results they want, companies have to put in additional effort. After extending a BI application across the enterprise, the next step is to extend it to other members of the supply chain, according to Smith and Dunn. One hospital distributor, for example, extended its BI application to enable a supplier to learn the distributor's volume need for a specific product. That information enabled the supplier to ramp up production, while the distributor was able to enjoy volume discounts. From Insight to Incentive: Once data is gathered and analyzed at that level, BI can be used to motivate as well, adds Dunn, citing an example of a municipality considering outsourcing work that previously had been handled by city employees. If those employees had known their productivity was being measured, it may have improved, Dunn contends.

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