Wasted efforts, missed opportunities. If there is one thing guaranteed to raise the blood pressure of top executives, it is the knowledge that their organisation is failing to use the skills, resources and information it has to save or make money.
For the best part of two decades, business intelligence (BI) software has been sold and deployed on the promise that it can produce insights that result in improved efficiencies and open up new opportunities. It has worked well enough, occasionally throwing up some dramatic success stories; but even the most evangelistic of practitioners agree that it is not widely enough used, it is often too complex, and the insights it delivers are often not closely enough attuned to business needs.
“BI has been a sort of marginal or back room activity for a lot of organisations…it needs to get more strategic and central,” says Tom Davenport, author of How Organizations Manage What They Know, an Accenture fellow and professor at Babson college.
This, however, is starting to happen. The new and emerging generation of BI tools, says Royce Bell, CEO of AIMS, Accenture’s recently formed information management business, is becoming more focused and more process aware. Through better integration and more focus, companies are able to use contextual and application based information.
Intelligent information management with BI
- BI can “democratise” information
- Effective BI should target the right people at the right time
- 75% of dirty data is a result of poor data entry by employees
- Data cleansing efforts should be tailored to the data’s importance
- Focus on BI consumption not production – less data can be better
Take Norwegian telecommunications provider Telenor. One part of the company controlled the installation and allocation of digital telephone lines; another managed customer accounts. Because of poor integration, engineers repeatedly dug up roads to lay more cable – only to later find that demand had fallen and the extra lines were not needed.
Telenor’s solution: an operational data mart to unite data from its customer service, service provision and billing systems, resulting in huge savings.
Jan Hommen, the former chief financial officer at Netherlands-headquartered electronics manufacturer Philips, believes that its BI implementation translated directly into increased share value for the company, as it provided information to shareholders quickly and accurately.
“When you accelerate reporting, shareholders will assume you are in control,” says Hommen. “Opening up information to them, rather than sitting on it, is a sign you respect the shareholder.”
More BI, less overload
The BI problem that most businesses are grappling with relates not to its possible value, but to its application. How can the insights be distributed and used by the right people, at the right time?
Increasingly, the focus is on delivering targeted information at the right time – not on trying to make sense of great warehouses of data. This also means it can be tied more easily into applications, and the information distributed more widely.
Cornie Victor, general manager of South African bank ABSA’s Information Management Division, knew that “the top 10% of your customers generate 120% of your profits, while the bottom 15% eat up 50% of your profits.”
But to derive maximum value from this insight, ABSA saw that it needed to bring the customer value analysis to the front line. Having established a BI platform from Oracle to serve corporate executives, the system is now being extended to branch managers. This empowers branch staff to evaluate what discounts they are able to offer customers, based on their value to the business.
Similarly, UK telco BT has extended its ‘customer intelligence’ capacity to its call centres, so that the benefit of the analysis can be used when dealing directly with customers. BT wanted to make sure that profitable customers with a high chance of changing supplier were offered deals that would keep them loyal. In order to do this, historical customer data was exhaustively analysed so that BT could predict what a customer was likely to do in the future. But this analysis alone would have only been worth so much, says Dr. Ben Azvine, head of BI and customer analytics research at BT’s chief technology office, had it not been extended to staff that interacted directly with customers.
A further advance, says Bell, is that some BI tools are becoming process aware – they are able to show, say, how long it takes for a business to provision a new customer. Increasingly, BI tools will be tied to applications such as customer relationship management (CRM).
Timeliness of information is becoming critical, suggests Chris Slater, director of information resources at Experian, an information services company. He believes operating in real-time is the key to business in the era of ‘customer to business’ (C2B) commerce, wherein the customer approaches businesses with information rather than vice versa. If a company is going to tailor its offerings to individuals at the moment they make contact, it must do so immediately – asking a potential customer to come back when the mathematics has been conducted is not acceptable.
A simple example: Amazon.com suggests products that users might like based on the way they navigate its website. By comparing the click path and search terms of the user to historical customer data, Amazon.com takes the opportunity to cross-sell products tailored to the individual.
Again, focus and simplicity are important. Gareth Herschel, a CRM analytics analyst at Gartner, believes that investing in real-time analytics for the sake of cross-selling is not cost efficient, given the hefty technological investment it demands.
‘Real-time’ analytics are best applied in situations in which customer service staff have one chance to make a crucial decision, such as when they are checking whether insurance claims are fraudulent, or a potential customer’s credit rating needs to be established. In these instances, the value of applying newly acquired information to analytical processes is more likely to justify the outlay cost.
But whether in real-time or otherwise, businesses need BI to gain a true picture of what is going on within their own operations, and outside in their markets. This is especially true for industries undergoing rapid change, like the telecommunications or utilities markets, in which the established rules of engagement are quickly becoming out of date.
“If you’ve invested in BI and it tells you what you already know, you’ve wasted your money,” Herschel says. “Value comes from the ability to test your assumptions, and to find out if they’re wrong.”
It is important to know what you need to know.
Information Management: the expert view
Atle Skjekkeland is the European managing director of the enterprise content management association AIIM. Atle has several years of industry experience as a manager and consultant for providers focused on information and output management.
Users don’t care where information comes from, they just want to find the right information at the right time. The challenge with information management is that workers are very possessive about information: they think ‘this is my email, this is my document’. We need to change the mindset so they understand it is the company’s ownership.
Looking at the business benefits of information management, there are three levels: strategic benefits – in terms of compliance, for example, it might mean that you don’t get fined by the regulator; productivity benefits, which can be realised through finding information easily, freeing up resources; and hard-dollar savings, such as cutting distribution costs, reducing storage costs or business improvements.
From a vendor point of view, companies such as Oracle and SAP are definitely moving from a structured space into an unstructured one. But we also have leading vendors from web or document management going into content federation areas. Enterprise search is also a rapidly accelerating area.
However, the convergence of these technologies does not mean that users should have just one platform for data. You don’t need all your content in one place. You simply need content that is accessible and can be re-used across the organisation for those people who decide to use it.