Here's a trivia question: The title of what 1995 movie best describes a company that relies on traditional database reporting instead of advanced business intelligence (BI) tools? Money Train? Unlikely. Braveheart? Generous, but no. Higher Learning? Hardly. Okay, time's up. The correct answer? Clueless. Because traditional reporting typically pulls data only from department-specific point applications, it doesn't provide an integrated, enterprise-wide view of key business metrics. If a report generated by one department fails to account for information tracked by another department, that department may inadvertently take actions that negatively affect the overall enterprise.
According to Sadanand Sahasrabudhe, senior product manager, MicroStrategy, Inc. (McLean, VA), "A typical reporting tool operates in its own silo. To gain a broader perspective, you have to pull information from a variety of systems."
Without the ability to intelligently query all enterprise data using a single analytic engine, companies are left simply with piles of data. As Jeffrey Pease, senior director of product marketing for Business Objects (San Jose, CA), puts it, "It's like sitting on top of a gold mine without a shovel." Andy Kulakowski, COO of Speedware Corp. (St. Laurent, Quebec), agrees that companies often amass large quantities of data but make minimal or misdirected strategic use of it. "Despite spending money on information management systems, companies are often data rich but information poor," says Kulakowski.
By offering dynamic, multidimensional views of information across the enterprise, business intelligence software can help companies avoid being "clueless." Going beyond the two-dimensional (i.e. row- and column-based) querying applied to tables in a relational database, analytic tools query multiple databases and multiple applications across the enterprise. Furthermore, the data in various corporate databases can be collected in giant repositories, or data warehouses, which help to focus the efforts of analytic tools. Most importantly, the enterprise-wide information gleaned by BI applications can be delivered to key decision-makers via real-time alerts.
BI Delivers Timely Updates
Unlike automatic, moment-by-moment BI analyses, traditional reports are generated on a periodic basis and often require a request from an inquiring individual. That person is usually looking into only one arm of the company's operations. Consequently, key events often go unmonitored, and companies are left, for long periods of time, in a state of unknowing. Pease says of this common scenario, "No news is no news."
In offering an example, Sahasrabudhe points to a common scenario in which customer revenue information is collected in isolation from data on call center activity. "A reporting tool designed for a call center might help you to discover that the average wait time is within an acceptable range - a minute, for instance. But, that seemingly reassuring statistic may be hiding a problem," Sahasrabudhe cautions. "Perhaps 70% of the most profitable customers were made to wait ten minutes, while most of the unprofitable customers got through in 30 seconds. A BI system can correlate the data initially collected for different purposes."
By constantly running in the background and doing trends and forecasting analysis on continually updated historical data, BI software allows companies to monitor the inflow and outflow of individual customers on a moment-to-moment basis. "In the old days, the village blacksmith knew who was coming in to buy horseshoes," Pease says. "But, for companies with thousands of customers, individual tracking is difficult. Analytic tools bring back individuality."
Intelligent Alerting Means Intelligent Reacting
Helping to load the enterprise truck with whatever information the BI shovel unearths is the Internet. BI software typically drives the information it collects to users via e-mail or browser-based Web portals. A popular term within the BI industry is dashboard, referring to a user interface that presents valued information in an at-a-glance format, including screen pops within other desktop applications. BI software can also alert users by sending voice or text messages to cell phones and wireless handheld computers. According to David Bradshaw, lead CRM (customer relationship management) analyst for Ovum (www.ovum.com), the key is pushing predigested information to users, such as sales reps and customer service agents, so that they can more efficiently do the work they are trained to do. "Automated tools help you avoid the cost and difficulty of bringing data analysis expertise to your reps and agents," Bradshaw insists. Sahasrabudhe agrees. "If I'm a corporate executive, I'm not going to learn the analytic tool so that I can apply it to incoming data. I want to come in in the morning and have the highest level information and reports already available on my desktop."
No matter which method of receiving information a company uses, executives and managers can choose to have analytic tools deliver alerts based on predefined business rules. These rules establish thresholds - levels or types of activities that, when reached or identified, automatically trigger an alert. Any enterprise function or process, from finance to procurement, can be tied into an alerting system. For example, a sales manager may want to know the moment when sales in a particular region exceed or fall below a predetermined goal. Or, budget planners may want up-to-date market information that could affect revenue forecasts.
If Your Customer Sneezes, You Need To Know
Perhaps the most commonly studied aspects of a company's operations are customer purchasing activities and, correspondingly, customer service and marketing. Changes and trends in customers' purchasing activities, for example, directly affect the bottom line. Therefore, alerts about customer activity are particularly important for determining whether immediate, responsive action should be taken. For example, a sales manager may want to be alerted the moment any of the company's key profitable customers have altered their typical behavior. Perhaps a steady customer has refrained from making a purchase for more than a week. Or, a seemingly satisfied customer may suddenly be making frequent calls to customer service.
In any case, analytic tools can be configured to not only send out alerts identifying the change in customer behavior, but also to automatically trigger responses that address the change, such as initiating a retention campaign. In summing up the differences between traditional reporting and real-time alerting by BI applications, Kulakowski notes, "Traditional systems require that humans first observe and comprehend out-of-bounds facts before any action is taken. By contrast, when key performance measures are out of line, analytic software agents instantly take notice."