Sheets of figures alone are not sufficient to help you understand your business. Nakis Papadopoulosse argues that you need a proper business intelligence platform if you are to stay competitive
Traditionally, companies were able to fit all of their structured data, including numbers, names and addresses into relational databases. More recently companies have been frantically trying to cope with, and manage, the huge amount of unstructured data stored on documents such as powerpoint presentations, spreadsheets, pdfs and email messages.
Managing unstructured data was never really a priority for directors until regulatory compliance came into force. However, they are now realising that they need more than just numbers and statistics to obtain a complete picture of their business. By managing and interpreting unstructured data such as thoughts, ideas, comments and phone conversations, they can easily ensure they stay one step ahead of the rest. Being able to easily view the history of products sold, what people think of a certain product and what their customers think of their business will give them a different perspective, and one that ploughing through pages of figures could never have achieved.
Implementing a successful business intelligence (BI) strategy will allow an organisation to obtain a clearer picture of its business, help it to make informed decisions and more importantly, manage risk. Using BI to gain control over their unstructured data helps companies gain competitive advantage by identifying opportunities within the business and providing insight into its customers.
A prime example of when BI can help manage risk is when an organisation is going through a merger or acquisition. M&A volumes have been exceptional over the past 12 months, which places those people involved in brokering deals under considerable strain. Following any M&A, a company will find it has two sets of financial records, customer files, HR records and so on, stored on different platforms. More often than not companies do not realise the importance of integrating intelligence from both sides of the business, and it often falls down the list of priorities.
Companies can often experience problems when they integrate data after a merger, because they do not realise that they may be dealing with completely different systems and BI tools. For instance, there may be different coding in place to bring the data together, so having a complete view of the combined entity of data may be more of a challenge than companies first thought.
Furthermore, if both companies have their own BI tools in place, there could be dispute over which technology platform should be adopted for the entire company. It is all about making a pragmatic decision and choosing a tool that aligns to the business and can be integrated well with the entire IT infrastructure. The trick to making a BI integration successful following a merger is to look closely at how the company operates and choose a solution that will best suit everyone. More importantly, getting buy-in and support for the BI solution from all sides of the business will ensure an easy and smooth integration.
Once a merger has taken place, the companies involved often have their own preferred suppliers and ideas of how a business should be run, and do not realise that they will have to adapt to the politics of the other company. The person in charge of the project needs to drive individuals from both sides towards a single goal and a common understanding of what BI system it will use and how it will be implemented.
Many companies make the mistake of placing data integration low on their list of priorities following a merger. Monitoring the performance of the new merged business is vital to its continued success. The management team will need to manage the performance, and BI will help to achieve this.
ITV and business intelligence
Commercial broadcasters Granada and Carlton experienced a similar challenge in 2004 when they merged to form ITV plc.This posed a number of problems for the company, particularly relating to detailed business intelligence and compliance with new regulation. The disparity of systems and the diversity of data revealed a significant need for improved data analysis and reporting.
Prior to the merger, both Granada and Carlton operated as separate businesses with partially disconnected business processes and limited access to the complete data necessary for effective decision making in a competitive market. Both broadcasters were separate companies with their own operations, each contributing to a central programme budget but unable to share confidential sales data, or readily access detailed information on some transmission and operational costs.
“Companies can often experience problems when they integrate data after a merger
ITV required access to consistent, high quality information to support its commercial decision-making and enhance its ability to achieve strategic objectives. In addition, ITV needed a way to effectively calculate the profitability of its television programmes, assess programme performance objectively and facilitate regulatory compliance.
Following the merger, ITV's first priorities were to continue broadcasting quality TV programmes and maintain service to customers. However, to realise the full benefits of the merger, ITV also needed to provide management with access to all the newly available data across the merged organisation. It needed to knit all this data together quickly and aggregate it into a warehouse, so it was accessible for rapid analysis by strategy makers.
It is increasingly important for ITV to understand and monitor the behaviour of its viewers across digital satellite, free view and analogue terrestrial platforms in order to measure the profitability of its products and schedule programmes more effectively. The previous method of cross platform analysis was only available through third party providers, which proved extremely costly and did not lend itself well to integration with ITV's internal data.
ITV needed a solution that would not only reduce costs but also the time spent on obtaining this vital information, while increasing flexibility in analysis. The organisation worked with IMGroup to implement an advanced reporting and analytics solution, which consolidated data from a variety of operational and unstructured data sources. Since implementation, ITV has seen a significant reduction in the time required to provide essential, actionable intelligence to the broadcast strategy teams. This, in turn, has improved its efficiency dramatically.
Information workers at ITV can now discover opportunities and anomalies within the data, which is something that was previously impossible to do. Access to this data also allows ITV to defend $3 billion of commercial spot revenue, giving it competitive advantage in a fast moving market, where accurate, timely information is crucial for success.
The next challenge for ITV is the ending of analogue services in 2010, when the industry will move to a purely digital offering. ITV's two existing commercial terrestrial competitors could rise to potentially hundreds of digital commercial competitors. Being able to perform such a high level of analytics and gain insight into the population's viewing habits will ensure ITV stays ahead of the game.
What the future holds
Many organisations like ITV have really started to see the true value of their investments in business intelligence systems. They can now look at performance across the board and benefit from quality data and accurate reporting throughout the organisation. Some are even looking to the future to see how business intelligence technology will evolve over the next year to ensure they can continue to manage risk and assess overall performance.
“Demand for access to BI data through PDAs and smart phones is destined to grow
We can expect to see a convergence of BI and content management tools. This is due, in no small part, to the functionality of Microsoft Office 2007, which allows users to consume BI within the familiar Excel interface. Historically, people found it hard to use Excel in a controlled manner, kept documents to themselves, and thus failed to share information effectively. Office 2007 will overcome this by developing its BI facility into much more of a collaborative knowledge management tool. As a result, users will be accessing, sharing and analysing consistent sets of both structured and unstructured data that, in turn, help comply with regulations and corporate governance practices.
Search and BI
Search is becoming a fundamental component of the broadening BI discipline, as it streamlines access to both structured and unstructured data. Major BI vendors are developing solutions to enhance search capabilities, but the major developments are centred on integrating BI platforms with enterprise search technology. The coming 12 months will also see a much closer collaboration of BI tools with search engine applications, making it easier for businesses to view BI data within a traditional search engine.
Hosted BI will benefit large enterprises, which will be able to deliver BI functionality to a greater volume of users. The mid-market organisation will also be able to fully exploit BI capabilities. In the case of the latter it will make BI accessible to a wider market and, in the case of the former, it will enable the business to provide operational and strategic business functions improved access to information.
Many businesses already rely on third parties to securely host their IT systems, and these types of organisations will look to similar approaches for BI. A lack of key skills available in the market to deliver in-house BI solutions, coupled with the complexity of the tools and their integration, means that hosted BI models will enable a wider range of businesses to tap into the discipline's benefits. However, as with many other aspects of hosted services, security is a challenge that providers will need to overcome. Some businesses will perceive outsourcing to be too great a risk, so providing evidence to reassure customers that using such facilities will not compromise their data is going to be paramount.
With mobile working now commonplace, demand for access to BI data through PDAs and smart phones is destined to grow significantly. While the requirement for full BI functionality through mobile tools is not likely to be widespread, the challenge for vendors is how to deliver 'thin' BI to the hands of those on the move. The demand is there: businesses want to deliver high level financial figures to board members' PDAs; company executives want to access corporate KPIs when on the road; and sales teams want up-to-date information on discounts and offers when out visiting customers. Because of this, mobile functionality is set to become a key component of BI platform delivery.
Crystal ball gazing
With the analyst community recognising the growing importance of BI on the CIO community's radar, whatever doors open throughout the remainder of 2007 and beyond, it's safe to say that the technology will really start to come of age and develop. There is always going to be a need for access to, and analysis of, business data. Developments in BI technologies are set to make systems more accessible to everyone in business.
Nakis Papadopoulos is joint CEO, IMGroup, www.imgroup.com