Sunday, September 23, 2012

Business Intelligence - top 5 trends


Pervasive Business Intelligence and Data Democracy

In a recent survey, Information Week found that for businesses that had adopted a BI tool, only 25% of employees in those businesses had access to that tool. Expect this trend to change over the course of the next few years as organizations begin adopting cloud and mobile BI dashboards. Certainly in some respects, traditional BI tools have been too bulky and technical for that other 75% of employees to use, rather than being a case of not needing that information.

The common thread throughout the trends listed here is the idea that business intelligence is heading towards simpler, more straightforward methods and tools. The way organizations are using BI tools is changing to provide people throughout the organization with access to KPIs (key performance indicators), not just limiting it to end of month meetings in a boardroom. And that's a good thing, because every job has some degree of decision making associated with it. Consider the warehouse worker wasting time looking for an out of stock item when they could simply check their KPI dashboard and save time and money



Operational or Tactical Business Intelligence

According to Gartner, operational or tactical business intelligence (BI) is growing at a rate of 13% CAGR. That's an impressive number, especially when one considers that analytical or traditional BI tools are growing at a rate of 9% CAGR. This is the result of tandem developments in BI over the last few years. Increased adoption of agile BI tools like cloud and mobile BI encourage individuals to access their KPI dashboards more often. Daily performance metrics — the ones more likely to fluctuate on an hourly basis — are much more relevant to mobile users because they can use that information in a constructive, actionable way. As mentioned above, pervasive BI is also influencing this shift towards operational BI, since analytical BI is more often used by decision makers like executives.

An operational dashboard works much like a car's dashboard. As you drive, you monitor metrics that indicate the current performance of your vehicle and make adjustments accordingly. When the speed-limit changes, you check your speedometer and slow down, or when you see you are out of gas you pull over and fill-up. Likewise, an operational dashboard allows you to make tactical decisions based on current performance, whether it is chasing a red-hot lead or ordering an out-of-stock product.

Simplicity and Self-Serve Business Intelligence

Self-serve business intelligence (BI) is about simplicity. In turn, simplicity is about accomplishing your goals without being completely taxed from the effort. The reason self-serve BI is so attractive — and why it is projected to increase throughout 2012 — is that it offers end-users the ability to apply their knowledge of what metrics and ratios matter, and share this expertise by building dashboards without IT support. As more organizations demand self-serve and user-friendly BI tools, vendors will need to continue (or start!) to work on putting non-technical users in the driver's seat of their BI dashboards.

One of the most frequently touted promises of providing simpler, more self-serve oriented BI tools is the dramatic reduction of IT involvement. Whether that goal is attainable or not is irrelevant. The important thing is that in attempting to reach that goal, BI tools will evolve to be more user-friendly and will encourage everyone to start monitoring important metrics and KPIs (see #5. Pervasive BI and Data Democracy).

Cloud Hosted Business Intelligence Solutions

Cloud deployed business intelligence (BI) tools are becoming more popular each passing year. As vendors continue to develop better tools, business units forge ahead and capitalize on the simplicity of deploying their BI tools in the cloud. According to a June 2011 survey by the BI Leadership Forum, more than one-third of organizations have a cloud-based BI tool. Even more telling, is that 65% of those organizations are planning to increase their use of cloud BI in the next 12 months. These statistics are a promising indicator of what many analysts and vendors have been predicting for the last few years — increased adoption of cloud-based BI solutions.

Throughout 2012, expect to see the adoption of cloud BI tools to be driven by a number of important factors. First, cloud-based solutions offer the advantage of being relatively simple and convenient to deploy. Second, cloud tools are more easily scalable to provide access to key performance indicators (KPIs) to everyone in your organization, no matter where they are or what device they are using. This in turn fuels pervasive BI and improves decision making across the organization. Lastly, continually improving security measures will put to rest any reservations businesses have with storing their sensitive data in the cloud.

Mobile Business Intelligence and Accessibility

Mobile business intelligence (BI) tools have long been touted as the future of BI and for good reason. In a revealing survey conducted by Gartner, it was found that by 2013 one-third of all BI usage will be on a mobile device, such as a smart-phone or tablet. This is a remarkable figure that points to another year where mobile BI adoption continues to chip away at desktop-only solutions. In part, the changing dynamic of many work-places is fueling adoption of mobile BI. This was reflected in a recent survey conducted by the Business Application Research Center, which found that while adoption is currently at about 8%, over the next 12 months 30% of respondents planned to deploy a mobile BI tool. Gartner is reporting mobile BI to be growing at a staggering 40% CAGR.

This trend is easy to tie in with the 4 preceding predictions in this article. Mobile BI is increasingly being seen as a tool for providing on-the-go workers with access to KPIs — imagine a warehouse worker knowing the exact amount of stock, or a sales rep able to monitor territorial performance while away from the office at a tradeshow. Operational BI and mobile tools synergize to create an environment where performance can be managed effectively and from any location. By necessity, organizations deploying and vendors developing mobile BI tools need to consider the implications of working in a remote environment. In other words, a traditional BI dashboard laden with juicy KPIs just doesn't translate from the desktop to a mobile phone in a way that is user friendly.5 trends for business intelligence in 2012

Sunday, August 12, 2012

Strategic Importance of Business Analytics and Business Intelligence determines BI Mission

At the most strategic level, companies need to determine how important BI is to their ability to execute their business strategy and effectively compete.  We can refer to this as the strategic importance of BI, which then determines the appropriate mission for BI.


A Clear BI Mission Provides Context for Business Intelligence and Business Analytics Strategy

Consider the example of a hypothetical packaged food company that makes and distributes thousands of products to hundreds of retail customers who operate thousands of stores across the country, and who operate in different distribution channels.  Further, end-consumer demand patterns are not completely visible to the manufacturer, making it difficult to optimize inventory, replenishment, and customer service.  All these moving parts create a complex business environment generating an incredible amount of transactional data.  
Making sense of all this information, through business intelligence and business analytics becomes strategically important, which is a motivation for the company to achieve at least competitive parity via Stage 3 BI and analytics capabilities.  Taking advantage of available research about best practices BI for the food/CPG industry, this company could then focus its strategy on delivering business intelligence and business analytics such as:


  • Performance scorecards and dashboards
  • Trade spending analytics
  • Customer service analytics
  • Inventory analytics
  • Financial and cost analysis capabilities
  • Supply chain and operations analytics
  • Purchasing analytics


The link between strategic importance and business intelligence and business analytics strategy sets the stage for productive discussions within the executive suite.



A Clear BI Mission Builds Executive Buy-In and Momentum for Funding

Once executives understand how important business intelligence and business analytics are for successfully competing, and once they see that there is a rationale for a stated BI mission and strategy, they are much more likely to move beyond considering BI an “IT initiative” and embrace sponsorship. 
Absent a clear understanding of the strategic importance of BI, it is difficult to get business executives to move much past the lip service stage of BI – the stage where you hear such statements as “we know we need BI, but the time is not right.” Once they see that BI can make a difference in future profit streams, they are much more likely to fund BI at a level that is commensurate with its importance. 

Sunday, August 5, 2012

What is Business Analytics?


What is Business Analytics?

Simply put, business analytics – or “analytics” for short – is a term for data-based applications of quantitative analysis methods in use in businesses for decades. In the mid-1980s, I read “Quantitative Methods in Management,” which was written in 1977. There are dozens of books that apply various quantitative analysis, operations research and discrete mathematics methods to specific business domains, ranging from sophisticated customer segmentations and predictions of customer lifetime value to demand forecasting and supply chain optimization. So the field of analytics, per se, is not new. Rather, tried and true quantitative analysis methods have been implemented as packaged software applications that can be leveraged to build a wide range of company-specific analytical applications that address common business challenges.




Business Analytics and BI – What’s the Difference?

We define business intelligence as the use of business information (data) and business analyses to support business decisions in the context of core business processes that drive profit and performance.
BI has always been about analysis, and business analyses come in a wide range of types and uses, from simple analyses such as accounts receivable aging reports to the sophisticated anti-fraud analytics used by major credit card companies. Our focus for this article is on the BI subcategories advanced analytics and predictive analytics – which we will refer to as business analytics or analytics.


Business Analytics Opportunities

There are a large number of potential opportunities for leveraging analytics to create competitive advantage – and ultimately to drive profit improvement. Analytics can be used across organizations for such purposes as:

  • Customer segmentation.
  • Category management.
  • Risk analysis.
  • Inventory optimization.
  • Demand forecasting.
  • Sales trend analysis.
  • Statistical process control.
  • Cash flow forecasting.
  • Market analysis.

Business analytics are essentially a toolkit that sophisticated business analysts can use to glean insight regarding a wide range of business decisions in different parts of companies – all with a goal of increasing revenues, reducing costs or both. And while these opportunities are many, so are the potential pitfalls.

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