Is Business Intelligence Still Relevant?

ERP is looked at as the holy grail of enterprise data management solutions.

In such a scenario do business intelligence (BI) tools have any potential? Yes,

says Mehta of MAIA Intelligence, while adding that BI's utilization in a

business environment has not been fully explored

It is tough to define business intelligence (BI) in a nut shell. Some believe

it has to do with query and reporting. Others look at it as a tool that has

analytics, dashboards and scorecards that can be used for performance

management.

But if you were to put it in layman terms, it can be called as software that

allows enterprises to take informed decisions. The presentation components, like

dashboards or cubes, can vary. At the end, it is a software tool that uses

captured data to help enterprises take on-the-fly decisions to resolve any pain

areas. The best analogy for BI is that of a compass. It can show you the

direction, but it can't head you that way. Similarly, BI tools read numbers and

analyze them to offer accountable decisions. But it is up to the customers to

decide how they want to act upon it.

Sanjay Mehta CEO, MAIA Intelligence

Where BI stands



At a time when customers are happy and content with their enterprise

resource planning or ERP (read SAP) implementations, does this mean that BI

tools have become redundant? I think not. BI is the application that threads all

applications, including ERP and customer relationship management (CRM), which

reside across the different business lines of a customer's IT environment.

Right now what is happening is that the customer is doing all the

integration. So take the example of a user accessing different products of a

bank. He might be using the mutual funds, has two different loans, one savings

account and two credit cards. He will be keeping track of his activities and

payments for this single bank.

With BI, the bank can simply have one window for the customer across it

various product offerings and will know his credit standing, withdrawals,

deposits, stock trading, etc instantaneously. It can then decide what kind of

benefits it wants to offer customers of this profile across various parameters.

This shows that BI is still relevant in today's environment. But there is no

doubting that the awareness of its real time applications is still very low.

Different BI models



Each BI vendor has its own core competency. SAS has a purely statistical

model where it cumulates data for a certain number of years and uses algorithms

to do forecasting. So a bank might buy SAS licenses to see what the credit rate

would be five years down the line, keeping the contemporary financial data in

mind.

BI is the application that threads all applications, including ERP and customer relationship management (CRM), which reside across the different business lines of a customer's IT environment

Business Objects or Cognos have tools for performance management. MAIA has

skillsets in using data to offer operational solutions.

It is unfortunate though that it is perceived that BI solutions are only

meant for enterprise customers, because this is not true.

ERP is good for collecting data, but slicing and dicing it for individual

needs is not possible with it. Earlier, customers would plug in all this data

into an excel file and then work out permuta­tions to get an understanding of

this data for making projections and estimations. But with BI, the software with

a simple dashboard display does this.

Let me give you an example. There was a company that had show cards to mark

employee attendance at its gate. We took this data from the HR department and

broke into different sub-categories. We found out how many women and men were

coming late and found out that over a period of a year it was statistically the

men who were coming in late. We also discovered that the company was losing 53

days of man hours across 1,600 employees, due to late coming.

We further sliced the same HR data into hierarchy and departments to find out

who were coming in late. We then found out the attrition rates across the same

hierarchies and departments and found that people who were regularly late were

the ones who usually quit the company.

The company was therefore able to take some steps like notifying the division

heads about chronic latecomers and rectify its manpower issues. This is a good

example of how a BI tool took some accumulated data and then found out a way to

use it to resolve their pain area-attrition and productivity improvement.

BI is barely there yet



When it comes to BI we have barely scratched the surface. There are

companies that are not aware about how BI can help them make quick decisions

that will have direct ramifications on their profitability. Even the top 100

companies are not clued into this fact, which shows the latent potential in this

area. According to a Frost and Sullivan official, the BI market was projected to

be around $70 million in 2007, up from $47 million in 2005. Dun & Bradstreet

pegs the global BI market to be around $5.7 billion, while the Indian potential

is likely to be Rs 1,200 crore.

Gartner has said that India is the fastest growing BI platforms market in

Asia (including Japan), posting a growth of 35.6 percent in 2005-06. BI

platforms revenues in India grew from $12.1 million in 2005 to reach $ 16.4

million in 2006. In APAC (including Japan), the BI platforms market grew at 16

percent in 2005 to reach $491.8 million in 2006, with Japan accounting for more

than half the overall market.

Since India is currently in the implementation wave of business applications

platforms like ERP, CRM and supply chain management (SCM), the demand for BI

platforms will continue to rise. The BI market in India has tremendous

potential, with growth expected to be over 35 percent.

What is now needed is a concentrated effort from vendors to raise customer

awareness about BI, especially in verticals like transportation, hospitality,

logistics, retailing etc. Operation BI reporting in enterprises across all

verticals allows companies to look at implementing enhanced capabilities to meet

their MIS reporting needs. Any company, which is in spreadsheet purgatory, can

be shown the merits of using BI tools because they will no longer have users

spending more time on analysis than executing action on the data.

Vinita Bhatia



vinitavs@cybermedia.co.in