Managing Intelligence


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Managing Intelligence

  1. 1. SPECIAL REPORT | Friday November 27 2009 How to make sense of the pieces INSIDE: What businesses need to do to turn data into information that guides decision-making
  2. 2. 2 FINANCIAL TIMES FRIDAY NOVEMBER 27 2009 FINANCIAL TIMES FRIDAY NOVEMBER 27 2009 3 Digital Business | Managing Intelligence Digital Business | Managing Intelligence Editor’s note Good decision-making in business relies on data, experts answering questions about the The final frontier of although organisations limits of business encounter far more of it intelligence; another than any human mind studies how a city can handle. centre regeneration Which is why they scheme uses business need technology to intelligence to maximise business gather information, the benefits to all analyse it, and serve it parties. And audio up in a meaningful, podcasts highlight case usable form. studies of best practice. In this multi-media This audio and video Digital Business digest content will be added to advantage we are examining this process in print, with over the next three extra online content, weeks to build a including audio and valuable body of work. video. One video feature Peter Whitehead involves a panel of Digital Business editor Alan Cane on the ago by the US computer manufacturer Teradata, challenges of which combined supercom- Video and audio on extracting useful puter performance with sophisticated software to information from scan and detect trends and huge volumes of patterns in huge volumes of data. organisational data But it was expensive and ahead of its time. Today, B usiness intelligence, high-performance, low-cost information intelli- computer systems and gence, business cheap memory mean that analytics: whatever enterprises can and are col- you call it, all the evidence lecting and storing data in is that ways of turning a unprecedented amounts. Our panel answers the big questions company’s raw data into However, they are strug- IN VIDEO A three­part video series featuring information that can be gling to make sense of what experts from AstraZeneca, the London used to improve perform- they have. School of Economics and Quocirca. Part 1 ance and achieve competi- In Mr Evelson’s words: tive advantage is the topic “We have to find the data, today, part 2 on Friday December 4 and part du jour in many business we have to extract it, we 3 on Friday December 11 leaders’ minds. have to integrate it, we have Data store: at Sainsbury, the cleaning the data – convert- ent type and store it in one A survey carried out this to map apples to oranges, 20bn items purchased in the Dashboard that can give a warning light on overspending ing, in one case, 15 data repository: “The physical year by the US-based con- we have to clean it up, we chain’s outlets every nine types to a single standard. process of loading the data sultancy Forrester Research have to aggregate it, we months are analysed to spot Law firm Clifford Chance has found called The service works “Some of the larger areas of The Sainsbury contract is not as tough as it may Managing a city centre’s intelligence revealed that of more than have to model it and we trends and inform buying itself learning about habits it never like a dashboard with charts and spending have been travel, catering and involves the analysis of the sound. It’s actually deciding IN VIDEO Every footstep and every purchase 1,000 IT decision makers have to store it in some- Bloomberg News knew it had since analysing its graphs to give an overview of where entertainment,” says Mr Cranwell. “It 20bn items purchased in the what data to store there and is recorded in the shops of one of Europe’s canvassed in North America thing like a data warehouse. spending trends through an online money has been spent. shows where we have varying levels of chain’s stores every nine how to organise your work- biggest city centre regeneration projects. and Europe, more than two “We have to understand service provided by Rosslyn Analytics, a “It aggregates and shares spending between offices. We are then months – enough, if typed flows that is the difficult thirds were considering, what kind of metrics we boutique software company based in information,” says Charles Clark, chief in a position of power because we on paper, to make an in-tray part.” See how the mass of data affects piloting, implementing or want to track – times, cus- London, writes Dan Ilett. executive of Rosslyn Analytics. “We know much more about our spending pile almost 17kms high. NetSuite provides execu- decision­making in our video package expanding business intelli- tomers, regions and then, “It’s very flexible,” says Julien extract the data in a few hours and patterns. How can this huge volume tives with tailored “dash- gence (BI) systems. and only then, can we start Cranwell, Clifford Chance’s procurement categorise them so they go into certain “We’ve also looked at a cost recovery of bits and bytes be turned boards”, a visual representa- “Even in these tough eco- reporting.” manager. “You can look at your data to buckets. We then add other data such programme. Using Rosslyn’s expertise into useful information? tion of the information nomic times, virtually Everybody agrees there is reduce spending. We’ve identified as credit card or risk information. we’re using a module that works on Mr Llewellyn gives the important to their jobs. Three case studies nobody in our surveys says nothing simple about these opportunities that we wouldn’t have “It’s presented as a ready­to­use contract management.” example of skin creams sold A well-designed dash- show power of data they are retrenching or operations. “It is a very otherwise seen. It’s made us feel a lot report. The data cube never changes The firm claims to have seen a to counter stretch marks. board providing the right AUDIO PODCAST reducing their business complex endeavour,” says more confident of the data we’ve been but they can see it from so many return on investment of 100 per cent Generally bought predomi- amount of pertinent infor- Examples of managing intelligence initiatives,” Mr Evelson, “and that is using.” different angles. It’s one view of all within two months. “The payback nantly by women, if particu- mation is a crucial part of intelligence in action. says Boris Evelson, a princi- why this market is very The company, which has 29 offices in company­wide finance, procurement, period was very fast indeed,” says Mr lar stores show high sales BI according to Peter Lum- pal analyst for Forrester immature.” 20 countries, used a web­based tool accounts payable and spend data.” Cranwell. volumes, there are likely to ley and Stephen Black of PA Today – the course of with more than 30 years The business opportunity be a lot of pregnancies in Consulting. a swine flu outbreak; experience of BI implemen- for BI software has not been those areas – an alert for the They point out that it is with part 2 next Friday tation behind him. lost on IT companies and argues that it is a new large enterprises, BI strong case for return on Royce Bell, information exciting and more fun than store manager to stock up often forgotten that manag- and part 3 on What is BI management? there has already been sig- approach that will “turn the remains and will continue investment. management specialist with going through your proc- on maternity magazines, ers have limited time to December 11 It is not about the technical nificant consolidation in the world a little bit upside to be the ‘last frontier’ of It is, for example, hard to the consultancy Accenture esses to determine what you baby food and clothing. absorb and act on informa- nitty gritty of data ware- market, with IBM acquiring, down”. competitive differentiation. decide which tools and proc- takes a robustly pragmatic need.” And if most of the cloth- tion which, in any case, may intelligence housing or cleansing tech- among others, Cognos; SAP “Business efficiency over “Unfortunately, as the esses should be included in view: “Business is made up Mr Bell believes that ing bought is blue, there be imperfect – if it was per- nology. While technologies buying Business Objects; the past 20 years was all demand for pervasive and the assessment – Microsoft’s of processes. Some of them many executives are suspi- will be a lot of baby boys in fect, decision making would are important – and most and Oracle purchasing about automating a process comprehensive BI applica- SharePoint is much more may interact with the out- cious of the quality of the the region: “From buying a be no chore at all. A well-de- Contributors are good and effective, according to Mr Evelson – Hyperion to add BI strings to their respective bows. – enterprise resource plan- ning [ERP] for example. It tions continues to increase, the complexity, cost and than a BI tool, for example, but separating out which side world, but there is a definite chain of events. information provided by BI software: they think the jar of stretch cream, I’ve almost got you for life,” Mr signed dashboard can help managers make the best Alan Cane Andy Mears BI management is about Microsoft offers BI soft- generated huge efficiencies effort of large-enterprise BI strands are contributing to “All that business intelli- data are “rubbish”, and Llewellyn beams. possible decision from Stephen Pritchard Joe Mee ways of systematically mak- ware called SharePoint for businesses but is no implementations increases improved revenues and gence is supposed to inform, there is no doubt that trans- James McGeever, chief incomplete information. Jessica Twentyman Picture editors ing the most of customer Server and there is consider- longer a [competitive] differ- as well. which are not is a challenge. is any decision along that forming data into intelli- financial officer of the US The information, of Ross Tieman information – what it is and able interest in open source entiator. “As a result, the great As Mr Evelson notes: chain of events. The ques- gence requires clean data. company NetSuite, which course, has to be trusted Geoff Nairn Greg Meeson what you can do with it. BI software from younger “In the past two or three examples of successful “The grey boundary lines tion an executive should be Roger Llewellyn is chief markets BI management and that is where technol- Joia Shillingford Cover illustration More prosaically, it is eve- companies such as Pentaho years we have started to implementations among around which process and asking is: ‘At this point in executive of the UK soft- software, underlines the ogy can play an important Dan Ilett rything that has to be done and Jaspersoft. look at information as a Forrester’s clients are out- tools to include, the multi- the chain, what information ware group Kognito, which importance of clean, unam- part – in the automatic FT contributors For advertising details, to raw data before they can IBM alone reckons to have strategic capital asset for numbered by the volume of ple BI components that typi- do I need?’. has responsibility for ana- biguous data in breaking roll-up of data to a central contact: be manipulated to facilitate spent $12bn and trained the organisation. This will underperforming BI envi- cally need to be customised “Going through each and lysing, among other things, down “silos” – data stored repository: “Every time you Ursula Milton James Aylott on: better decision making. 4,000 consultants over the Even in these generate 20, 30 or 40 per ronments.” and integrated, and the fre- every one of your processes telephone calls made by cus- in different places and for- go through a stage with Production editor +44 (0) 20 7873 3392; It is also about under- past few years to develop tough times, virtually cent improvements in the In fact, more than two quent unpredictability of BI to be able to ask that ques- tomers of British Telecom mats within an organisa- manual intervention you standing the business and the tools and knowledge way we run businesses as thirds of users questioned system integration efforts tion is hard. People are dis- and store purchases that tion: “I believe that if the have the opportunity for Steven Bird Or your usual its processes well enough to which will encourage intelli- nobody says opposed to the 3 or 5 per said they found BI applica- all make BI business cases appointed because they use the Nectar loyalty card same piece of data exists in time delay and misinterpre- Designer representative know what questions should gence management in its they are reducing cent improvements we tions hard or very hard to an effort not for the faint of haven’t been able to get wis- of supermarket chain, J two places then one will be tation,” Mr Lumley argues. be asked of the data to customers. achieved before.” learn, navigate and use. heart.” dom simply by piling all the Sainsbury. wrong.” And these mis-steps are All editorial content in this supplement is produced by improve performance. Ambuj Goyal, who leads their business But revolutions are rarely The business case for BI How, then, should execu- data in one place. He says that up to 80 per The NetSuite answer for precisely what business the FT. Our advertisers have no influence over, or prior The basic idea was pio- the company’s information pain-free. According to the management is not helped tives think about business “That [data warehousing cent of the price of a new its customers is to convert intelligence management sight of, the articles or online material. neered more than a decade management initiative, intelligence initiatives Forrester survey: “For many by the difficulty of making a intelligence management? and mining] sounds more contract can be the cost of all the data to one consist- hopes to avoid.
  3. 3. 4 FINANCIAL TIMES FRIDAY NOVEMBER 27 2009 FINANCIAL TIMES FRIDAY NOVEMBER 27 2009 5 Digital Business | Managing Intelligence Finding a home for all that data RESOURCES who the customer is, it is the person you bill. Market- To cope with leaps ing will say it’s the person in information who responds to a cam- paign. For sales it might be quantity, businesses the person signing the should focus on cheque. These are all cor- rect, but they are not com- quality. Stephen mon. You have to agree how Pritchard reports you are going to treat that information.” This, more than hardware W hen companies assets, network capacity, or started to build even the ability to write the first enter- complex algorithms to ana- prise data lyse data, goes to the heart warehouse and knowledge of the debate around the management systems, in the resources needed for late 1970s, there was little advanced business intelli- doubt that these were gence. projects that demanded sig- Organisations need to nificant investment in both decide, early on, which time and resources. information they are going The early data warehouse to use, and be honest about systems certainly required the completeness, or other- mainframe resources, and wise, of their data sets. running queries took days, If they do not, the results if not weeks. can be disastrous. But advances in comput- “In the run up to the ing power, as well as financial crisis, institutions improvements in program- knew that there were three ming, have done much to categories of risk but they reduce the infrastructure only had data for one. So demands of business intelli- that was the one they gence (BI). It is now quite thought about,” says Accen- possible to run small-scale ture’s Ms Harris. “You need BI queries using little more to understand all of the risk than a data source, a laptop variables and how they computer and a spreadsheet Everything in its place: with data warehousing appliances, the bottleneck is the time it takes to load information dreamstime relate to each other, and program. this needs different technol- Some businesses – espe- ogies and capabilities in cially smaller ones – do Q&A ING Lease UK modelling, and in experi- indeed manage their data mental design.” analysis this way. ING Lease UK is part of the ING Group disparate data sources into one understanding profit and loss levers. Organisations also need to However, BI experts cau- – one of the largest financial platform. This allowed us to make We have now moved to a “nowhere consider whether conven- tion that this approach companies in the world. In 2004, the decisions in real time. to hide from the facts” culture, the IT tional data sources, such as struggles to scale up to sup- company acquired three businesses We ignored the “start small and department has been removed from the those produced by back- port the larger enterprise, from Abbey National Group. learn” approach and took the “start big critical path to information and office IT applications, or by and can raise real difficul- With 300 employees and 100,000 and understand” approach by focusing everyone in the organisation has access more specialist tools, such ties in areas such as data customers, the company has to ensure on the most fundamental question we to answers. This encourages as a retail point-of-sale sys- governance and lead to com- its reporting and market perception is needed answering which was “where do collaboration and end­to­end thinking. tem or a supply chain man- panies having multiple mas- as accurate as it can be. we make our profit and why?”. DB What lessons did you learn from agement system, really give ter data sets, or “multiple Dan Ilett, for Digital Business, DB What has been your return? this? What would you tell others to do? the full picture. versions of the truth”. questioned Chris Stamper, chief CS As an example, analysis of CS That perception­based decision Increasingly, companies “Many people start with executive of ING Lease UK, about how secondary income opportunity has making is a characteristic of sales­led are looking for ways to mine something small in scope, it creates useful intelligence from its driven £600,000 of additional annual organisations. That culture can be very the information held in and there is nothing wrong information. income. quickly moved with the right tools and “unstructured” data, such with that,” says Jeanne Har- Digital Business What did you do to DB How has using “internal” business environment. as e-mails, presentations ris, a BI specialist at Accen- improve internal reporting? intelligence helped? We now have a strong focus on real and documents, or even ture’s Institute for High Per- Chris Stamper We turned CS First, it has given us the ability to data quality. video clips or recorded formance Business. conventional wisdom on its head. We make decisions based on fact rather phone calls, to provide a “But if marketing, and found a tool that allowed the business than intuition or perception and has A full version of this interview is at: basis for BI, and hence bet- finance, and sales have their to assemble all information from provided complete transparency when ter decision making. own scorecards, based on “As much as 80 per cent of their own data, it will be a the information in a com- Tower of Babel. Very few state hard drives in their data management company. ship management or enter- a result, the data will only pany is unstructured, organisations have done a data warehouses, because of “Even at data loading prise resource planning. be as good – and as timely – against just 20 per cent that good job of creating a single the superior data through- rates of 10 gigabytes an Such transactional data are as the information held in is structured,” notes Bob view of their data.” put they offer. hour, there is one company almost always historic, and those underlying systems. Tennant, chief executive at Nor is the hardware chal- But such systems are that is looking at 39 weeks leads to BI acting as a “rear Before companies can Recommind, a company that lenge one that chief infor- expensive and large organi- to load its data.” view mirror” for manage- build enterprise-wide knowl- specialises in using search mation officers – or users of sations, in particular, are This is leading some com- ment, rather than as an edge management or BI sys- technology for information business data – can com- beginning to struggle with panies to consider alterna- tems, they also need to work risk management. pletely ignore. the time it takes to load tive approaches to analytics, on the quality of the data. “Most business intelli- Although processing data into a warehouse or a such as stream-based ‘There are a lot of Data can also be accurate gence is focused on that 20 power has increased in line BI system, especially if it processing. It is also useful, unstructured but partial, or misleading, per cent of structured data, with Moore’s Law and data comes from multiple prompting businesses to especially if they were origi- as it is pretty high value storage has also fallen in sources. look at BI tools, as well as data that are not nally gathered for a differ- and easy to deal with. But price, the growth of busi- ness data is faster still. Vol- “With data warehousing appliances [dedicated com- broader-based technologies such as enterprise search, taken advantage of’ ent purpose. “A customer, for example, there are a lot of useful, unstructured data that are umes of data are reckoned puters for data processing], that can examine data in can exist in multiple IT sys- not being taken advantage to double every 12 to 18 the bottleneck is not the situ, rather than require tems,” points out Tony of.” months, twice as fast as just speed of the box or the them to be loaded into a accurate predictor of trends. Young, CIO of Informatica, Tapping into that unstruc- three years ago. quantity of storage but the warehouse and then proc- “Most organisations don’t a data management technol- tured information might not Some businesses are react- time it takes to load the essed. use external data but rely ogy vendor. “You need to be easy. But it is the best, ing by moving to grid-based information, especially if Such technologies could on [data from] their opera- have a common agreement and for some companies, supercomputers, or by you are dealing with demo- also help businesses to over- tional systems to solve spe- on who the customer is, for probably the only way to offloading BI processing to graphic information,” says come their reliance on data cific problems,” explains example, if you want to look make more use of existing private or public “clouds”. Bill Hewitt, president and from operational systems, Earl Atkinson, a BI expert at their history. resources, in order to make Others are deploying solid- chief executive of Kalido, a such as customer relation- at PA Consulting Group. As “If I ask a financial person better business decisions.
  4. 4. 6 FINANCIAL TIMES FRIDAY NOVEMBER 27 2009 FINANCIAL TIMES FRIDAY NOVEMBER 27 2009 7 Digital Business | Managing Intelligence Search goes on for a ‘single view of the truth’ DISPLAYING THE INTELLIGENCE or might not – be overheating? Software companies, however, Ross Tieman says that, understand the issues and are first of all, organisations working hard on how to extract information from data and reach must find out who wants what Richard Neale, marketing or needs to know what director of SAP BusinessObjects, calls “a single view of the truth”. For mid-sized companies unen- T he idea that you can keep cumbered by a long tail of legacy tabs on how an organisa- systems and data, or those willing tion is performing from a to start again at square one, there desktop display while also are software-as-a-service special- focusing on its strategic direction ists, such as NetSuite, capable of is hugely appealing. providing a state-of-the-art system Every day, many of us do pre- containing every byte of corporate cisely this in a car: the dashboard data, fully integrated, on a com- monitors its systems and speed, mon set of definitions, accessible while helping the driver safely at will. negotiate the obstacles of a jour- But abstracting information for ney. Could similar displays not a corporate, not-for-profit, or even help in running a company, a public sector dashboard display is sales department, or a group of also attainable. hospitals? First, you have to discover who In theory, they can. wants, or needs, to know what. Most industrial processes today In a car there is a speedometer are run by mouse-clicks – from and a fuel gauge, possibly with nuclear power stations to cloth- information on fuel consumption, Eyes on the dial: simple ‘dashboards’ can be a useful way to see real­time performance data dreamstime cutting machines. Corporate sys- or distance until you next need to tems store every digit of data cre- fill the tank. But most of the other user to “mine” the information, graphs, thermometers, heat-maps for-profits want the IT equivalent ated, whether by the sales staff dashboard data are displayed only calling up detail to establish the – just about any format the user of the forward-looking radar that logging their calls, the accounts if needed, as an alert – such as nature and cause of the problem prefers. some car-makers have trialled. clerks issuing invoices, the when the cooling system fails or a to which they are being alerted. What business intelligence data As Mr Rayner says: “You need machines doing the manufactur- seat-belt is unbuckled. An alert could relate to inventory add is the ability to explore the more performance management ing or the purchasing manager Business intelligence displays levels, risk, cash balances or even information easily with mouse applications to help people model placing orders for materials. need to follow the same precepts. a cost or time over-run on a clicks to discover what happened, options.” This is where a lot of Yet these glorious, information- They have to provide appropriate project. where, and why. corporate IT investment is now rich data are so often compart- “mission critical” information for That list highlights the impor- A typical NetSuite display is going, he says. mentalised in fragmented systems, all; to enable users to call up infor- tance of delivering relevant infor- presented on a series of tabs, with But if you are going to start each designed to serve a particular mation relevant to their role or mation to the responsible individ- pages that might include a meter, making decisions about business business or organisational func- task; and to provide appropriate ual. To be valuable, it has to con- top selling items as a bar chart, strategy based upon conclusions tion. Bolting them together to turn alerts when things go wrong. tain signals that the recipient may key performance indicators that drawn from computer software data into information about corpo- There is no one-size-fits-all system. need to act upon. The IT boss may provide pop-up graphs, and com- you need clean data, and answers rate or organisational performance In a car, every driver is engaged need to know if the system is parative sales as a chart with vari- to current questions, rather than can be an IT chief’s nightmare. in a similar task, but in a com- able time-spans. If you have relia- whatever the system was set up to It might seem as though a few pany, some users – typically the ble real-time data, you can sort measure five years ago. wires and some simple software chief executive or finance chief – ‘Most organisations and display it any way you like. “Most organisations have far too could enable data to flow seam- need access to a broad range of have far too many As IBM’s Mr Fuessler says, if a many metrics, without being able lessly between systems, enabling information, while a departmental retail company’s sales fall, it is to plot cause and effect relation- the chief executive to see the head might be interested in partic- metrics, without being handy to be able to uncover ships,” Mr Rayner says. “These basics, such as sales, deliveries, and how much cash the business ular sub-sets of data. Almost eve- rybody also needs alerts relating able to plot cause and quickly that it happened because of a holiday in Boston that closed are pure business problems, and more technology is not the is using, when they log-on in the to their own areas of responsibil- effect relationships’ three stores, for example, and is answer.” morning. ity. not the start of an alarming trend. So departmental bosses have to Yet Bill Fuessler, IBM Global That information, as distinct Inadequate information can lead sit down together and agree the Financial Management Lead for from data, may have to reach likely to crash, but it’s the finance to false conclusions. questions they want answered, business consulting, says this can them wherever they are. Mr Neale, director who cares about the cash Nigel Rayner, research vice-pres- and what they want to measure to prove stunningly difficult. “One of at SAP, says that increasingly, balances, while the IT department ident at Gartner, says: “When you get them. the biggest issues is getting com- dashboards are being delivered overrunning its budget may mat- get the dashboard in, that is when To move from mere dashboards monality of data definition,” he not just on desktops, but on ter to both. you start to get awkward ques- to directing the course of an says. “And that problem will last mobile devices, including smart- The desktop remains the presen- tions. The chief executive can see organisation by drawing on all the for several years more.” phones. tation location of choice because revenue is going down, or up, but information squirreled within its Standards, and even digital defi- The latest generation of SAP the size of its display permits a lot doesn’t know why. Dashboards are systems, Mr Rayner elaborates a nitions of commonplace business BusinessObjects software enables of information to be shown. always about reporting. They four-stage process. Start by moni- words, may differ in the sales users to have “widgets” on their Historically, many organisations don’t help you make decisions.” toring performance, set up an department from those used in desktops that highlight particular have relied on Excel spreadsheets By definition, dashboards only enterprise metric framework, and marketing, or finance. Combine features of organisational perform- or Microsoft Office tools to present present current or historic data. add analytic and modelling capa- the data sets, and the “informa- ance. business information to users. But decision-makers want to be bilities with performance manage- tion” simply doesn’t add up. What It can also deliver a sophisti- Today, using modern software, able to predict the future. People ment applications. Only then, he chief executive would drive a car cated alert to a smartphone, as a the information can be displayed running large companies, public- says, can you go develop a pat- whose dashboard said it might – graphic display that enables the in the form of gauges, pie-charts, sector organisations and even not- tern-based business strategy.
  5. 5. 8 FINANCIAL TIMES FRIDAY NOVEMBER 27 2009 FINANCIAL TIMES FRIDAY NOVEMBER 27 2009 9 Digital Business | Managing Intelligence Digital Business | Managing Intelligence Lighting up the road ahead MONITORING late risks missing the replenish- ment window. Advanced analytics give “Information and the time taken a view of the future but to make a decision can be perisha- ble,” says Bill Hostmann, a can prove costly and research vice-president at Gartner. complex, reports “There are examples where it does pay off: Continental Airlines Stephen Pritchard is an example of a company that has to make real time decisions, R unning a business with- for example if a plane is forced to out business intelligence divert. They spend millions but it (BI) is often likened to kept them in business,” says Mr flying an aeroplane with- Hostmann. out instruments – you can get At Continental, better business away with it in clear skies and intelligence made for better com- with a following wind. But mat- munications with passengers ters can take a turn for the worse affected by delays and diversions, if you hit clouds, or turbulence. and this helped the company Few businesses, of course, risk retain the loyalty of its highest- flying blind. The question is spending passengers, the frequent whether the instruments they business travellers. have give them the full picture of But at the same time, Mr Host- Passengers waiting at Shanghai Pudong International Airport inspired Joakim Franzen of Roxtec, a Swedish manufacturer, to install plasma screens dispaying the flow of goods Alamy what lies ahead. A good pilot can mann concedes that management fly with instruments and a map, teams can quickly become but most of us are much more comfortable in a craft equipped with radar and GPS. In a business, monitoring data as they move through the organi- sation provides the equivalent of addicted to faster information flows. “The latency [the time delay when data are sent from place to place] is an important dis- cussion. “But if information is monthly, IT aims to overcome the blind spots the aircraft’s GPS co-ordinates, they want it weekly or daily; if it SUPPLY CHAIN “We take every order, altitude and air speed. Advanced is daily, they want it hourly,” he Please check the arrival and departure screens for your goods every bill of lading or ship- analytics takes on the role of the says. Smoother operations ment, and every freight bill radar, pointing out what lies As organisations act to reduce could lower costs Two years ago, while scanning the of goods in and out of Roxtec, with completed an upgrade of its ERP that’s paid, and in the mid- ahead. latency, and to push that through arrivals and departures screens at colour­coding to indicate how each system and one of the main aims was dle of the night, we transmit But creating accurate real-time their monitoring systems so that and make customers Shanghai Pudong International Airport, individual order or delivery has been to improve supply chain visibility. that electronically over to pictures of where a business is, let managers can act on it, costs usu- happier, says Joakim Franzen had a moment of prioritised. The data that feed these The first screen was placed between Oco, where it’s used to pop- alone predicting where it is going, ally increase. insight, writes Jessica Twentyman. screens comes from its IFS enterprise the desks of employees from the ulate our mini data ware- is stretching the capabilities of This is a real barrier to moving Jessica Twentyman As chief information officer for resource planning (ERP) system, via purchasing and customer order house,” he says. conventional BI, and forcing ven- to advanced analytics, when IT Roxtec International, a Swedish bespoke business intelligence (BI) tools departments. “There were some This, he says, has enabled dors as well as data analysts to budgets are constrained, and busi- A lack of visibility into sys- manufacturing company, he’d been built in house at Roxtec by Mr tensions between these two groups,” he Welch’s to tackle a number look at emerging technologies in nesses are no longer willing to tems data is the number one looking for a way to make its internal Franzen’s team. recalls. of problems – not least order to sift through ever-larger spend multi-million dollar sums challenge facing supply supply chain conditions more visible to Roxtec makes sealing systems for By erecting screens that displayed annual spending of about quantities of information. on enterprise-wide IT projects that chain professionals today. its employees around the world. cables and pipes that are laid in some pending orders and inventory levels, the $50m on transportation and In some fields, businesses are take five or more years to deliver. That’s the main finding “It occurred to me that passengers of the world’s most unforgiving two departments were able to work out distribution. For example, turning to stream computing, There are exceptions: according from a 2009 IBM survey of arriving and departing on flights aren’t environments, including offshore wind potential issues as soon as they arose. staff use the data warehouse where powerful machines analyse to Jeff Jonas, chief scientist at 400 supply chain executives so different from the inventory that farms and oil rigs. “Now, there’s no chance of pick lists to build full truckloads car- data in real time as they move IBM’s Entity Analytics business, worldwide. arrives at our company daily and the With a specialised product set and a and shipment information getting lost, rying as many cases and as through a system, looking for trig- some of the latest analysis sys- More than two-thirds (70 finished products that we ship out to workforce scattered around 13 because it’s all up there on screen,” much weight as possible, so ger points or anomalies. tems become not only more accu- per cent) reported that mak- our customers,” he recalls. subsidiaries, making sure everyone is says Mr Franzen. that trucks are not heading A stream computing system rate, but faster, as they process ing sense of “overwhelming With that in mind, he has since set aware of any problems that arise in the out to retailers half-full. developed by IBM, known as Info- more data. and fragmented data” about up 15­inch plasma screens around the supply chain is a challenge, he says. To A full version of this feature is at: “By analysing the number Sphere, is already being used to “The problem of trying to apply supply chain performance is company’s offices that display the flow address the issue, the company of orders and volume by day analyse “space weather”, a phe- an algorithm to an individual costly, difficult and too and comparing overloaded nomenon that creates interference transaction is like trying to time-consuming. days with days where with radio communications. squeeze knowledge out of a pixel. According to Sanjeev cal boardroom issue with tions: Where is a specific ning, manufacturing and esses approximately 50,000 trucks were lightly laden, Closer to earth, brokerage TD So we allow organisations to Nagrath, global supply direct links to financial shipment? When did it leave order fulfilment. customer orders a year for we found we could reorgan- Securities is using stream comput- weave together different pieces of chain management leader results – rather than a back- the warehouse? Is the order Increasingly, he says, cli- its grape-based juice and ise our shipments to even ing as the basis for an options Leading the way: retailers are using trend­spotting software to predict what will be in fashion next season Getty data from across the enterprise.” for IBM’s global business room operation – that imple- complete?” ents are using this kind of jelly products, had run up volume out across the days trading system it believes is the Again, the idea is not so much services arm, that creates menting BI to improve it is A vital step before BI tools platform not only to assess against what Mr Coyne saw of the week and to send out world’s fastest. are, however, there are downsides. Information management profes- used to synchronise other busi- to provide real-time data, but to “blind spots” at many com- seen as a priority. are chosen, is discussions current performance but as shortcomings in the fewer, better utilised trucks In the area of advanced analyt- The greatest is the sheer cost of sionals draw a distinction between ness processes, such as in a deliv- remove latency or delays that can panies, causing them to fall Those that do embark on between employees from also using for its simulation transportation and logistics per week,” he says. ics, significant work has already building systems that can provide systems that genuinely need to ery company, or when a retailer lead to less than optimal decision behind on customer orders, such projects often find that around the company – not capabilities to model modules of the company’s If supply chain visibility been done by governments in pre- real-time information to manag- work in real time, and those places a stock order. making. with potentially damaging applying BI to supply chain just supply chain operations “what-if” scenarios that Oracle enterprise resource is still an issue for many dicting what could happen in the ers. Another is the human ability where the information is merely An airline looking to fill its cab- However, the complexity and consequences. data is inherently more – on what data are required. demonstrate the likely planning (ERP) system and companies, it isn’t for future, for example in the field of to respond to real-time signals. timely, or has to be delivered at ins will need increasingly timely cost of such systems has tended to Business intelligence (BI) complex than applying it to “True supply chain visibil- impact of a disruption to the difficulties in integrating its Welch’s – or for the compa- counter-terrorism. There is little point in spending the “right” time. and accurate information as the limit their deployment to specific technology provides an data in other departments, ity needs to be a cross-de- chain. bespoke freight pay system nies that make up AMR And companies are looking what can easily be $1bn, or more, Often, the immediacy and value number of seats fills up, in order circumstances where the cost is answer to this lack of visi- such as the finance office, partmental initiative if it is Another approach is to that it uses to track trans- Research’s Supply Chain beyond relatively simple tools, on a BI system if the organisation of information changes through not to overbook and face paying justified, such as complex finan- bility, he suggests, by col- according to Kevin to get the significantly bet- portation costs. Top 25, an annual assess- such as regression analysis, to it serves is not agile enough to act the business process, creating a compensation to passengers. cial trades, security, or fraud lecting critical information O’Marah, an analyst with ter results that are achieva- Mr Coyne had worked ment of best practice among identify complex patterns in data on the insights provided. A distribution company will detection. about supply chain perform- AMR Research. ble,” says Mathieu Clerkx, ‘True supply chain before on supply chain prob- some of the world’s biggest and make increasingly accurate Some experts go as far as to say ‘If you can’t pull the need to deliver goods to a super- Some of the more advanced fea- ance from disparate sys- “To date, BI has been an executive advisor to Tata visibility needs lems with Bill Copacino, for- companies. predictions of customer demand, that real-time systems only have a market’s hub or to a factory tures, such as faster processing tems, consolidating it and more widely taken up in Consultancy Services (TCS) merly group chief executive Topping the list are Apple, the movement of market prices, or role to play in decisions that can levers and respond in within a narrow time window, or and better scenario planning, are presenting it to supply parts of the business where and a former senior vice- to be a for global business consult- Dell, Procter & Gamble, IBM even traffic patterns. Retailers are using trend spot- be made entirely without human intervention. real time, don’t make face financial penalties. But if it takes two days to deliver an item becoming part of mainstream BI. But by no means all emerging chain managers in the form of meaningful reports and information is more readily available and often held in a president specialising in supply chain operations at cross­departmental ing at Accenture, where he specialised in both BI and and Cisco and one of the major traits they have in ting software to enable them to “There is a case you can make, the investment’ by truck, information needs to be monitoring technologies will do metrics. departmental database. In electronics giant Philips and initiative’ supply chain management. common is their use of BI to predict what will be in fashion for automated decision-making, at its most accurate as the deliv- so, not least because businesses But in IBM’s survey, only supply chain operations, the microprocessor company When he heard that Mr analyse supply chain data, next season, and the technology is where real-time [analysis] is neces- ery window approaches. will only benefit from them if they 16 per cent of respondents data you need may not be in STMicroelectronics. Copacino had been says Mr O’Marah of AMR even being used by Hollywood stu- sary,” says Jeanne Harris, a BI further challenge when it comes to In a similar way, a retail store can act on the information. said their organisations the system at all or be held He has worked with TCS use one of the growing appointed chief executive of Research. dios and their financial backers to specialist at Accenture’s Institute developing advanced, analytical or manager ordering goods made in “You don’t want to invest in were effective at integrating in numerous disparate sys- to offer its clients in mar- number of BI tools offered Oco, a small but fast-grow- “These companies are predict the next blockbuster. for High Performance Business. prediction systems. Information Asia might need to do so six real-time information infrastruc- data across the supply chain tems, both internal and kets such as retail a hosted on a software-as-a-service ing BI-as-a-service company, masters of ‘balanced excel- These systems use pattern anal- “A tsunami warning system, or need not be real-time to be timely. weeks before they are required, to ture if you have a batch decision- in this way. “Cost and those of your key supply analytics platform that (SaaS) basis. This is what he was quick to make con- lence’. What they are able to ysis, often mining non-conven- a credit card fraud detection sys- Areas where the value of infor- avoid running out of stock. making process,” warns Gartner’s resource issues are largely chain partners, such as sup- includes information about Bill Coyne, director of pur- tact. Together, teams from do is slice and dice data to tional sources such as consumer tem, needs to work in real time. mation changes over time include Placing the order too early Bill Hostmann. to blame,” says Mr Nagrath. pliers or freight companies,” procurement and financial chasing and logistics at Oco and Welch’s built a find ways of running their sentiment or weather predictions, But the number of cases, com- perishable goods and commodities, means tying up cash and valuable “If you can’t pull the levers, and It is only at companies he says. spending, supplier perform- Welch’s, the US food manu- hosted data warehouse that supply chain in such a way to provide forecasts and advice. pared with these that work in such as airline seats or hotel beds, stock room space. Whereas, plac- can’t respond in real time, don’t where the supply chain “That makes it very diffi- ance, inbound and outbound facturer, has done. draws data from several key that costs are low but cus- Attractive though these projects ‘nearly real time’, is small.” as well as the information that is ing the order even a few hours make the investment.” operation is seen as a criti- cult to answer key ques- logistics, inventory plan- The company, which proc- back-office systems. tomers stay satisfied.”
  6. 6. Historians asked to become forecasters ACCOUNTING INTELLIGENCE value finance should bring to the advanced accounting systems, table is helping businesses look were unable to produce real-time Many companies cannot forward.” data on fundamental metrics relat- produce reliable internal Bill Fuessler, IBM Global Finan- cial Management Lead for busi- ing to risk and counterparty expo- sure. financial intelligence. ness consulting, concurs: “In the Yet business trends have hugely Ross Tieman reports last 10-15 years most companies have put in some kind of financial multiplied the scale of risk. Neil McGovern, Director of Product system for general ledger. Strategy at financial systems spe- T he biggest challenge in “But the past 18 months have cialist Sybase, points out that accounting intelligence pushed the CFO to the forefront – “markets have speeded up five- centres upon the mis- they have shown it is important fold in the past 10 years, so they match between the data also to have information about do the same amount of trading in and the changing role of the chief business risk and metrics. People a day that they used to do in a financial officer (CFO). are looking for forward-looking, week”. Since the days of ledgers and predictive measures.” By simple arithmetic, any trad- quills, the accountant’s role has In a business environment of ing institution that is not there- been essentially that of financial unprecedented uncertainty, execu- fore checking its value at risk (a historian, preparing reports to tives want every clue they can get measure of the probability of loss) present a year-end snapshot of the five times more often has seen the state of a company’s finances. VAR increase. With the advent of IT, corporate ‘Only about 20 per cent The need for real-time account- accounting systems were therefore of companies with ing data is particularly acute in A simple example of sclerosis is regularly use business intelligence How much are we owed, and what achieving this closed-loop.” The collapse designed to capture data and do financial markets. Regulators and a failure to attribute new codes to functions.” are the numbers and trends in Today, he says, technology ena- of Lehman the adding up. In recent decades, the capability risk managers are demanding new types of materials purchased, Many finance chiefs still rely on accounts payable and receivable? bles companies to start posing the Brothers market demands for more infor- mation – statements of cash flow regularly use business much closer monitoring of VAR and counterparty risk. or even expenses claimed by employees, which leads staff to old-fashioned spreadsheets to keep tabs on the company’s finances. But as James Fisher, senior director of solution marketing at question: “What if?” – that is, to model what would happen to sales highlighted shortcomings and more detail on liabilities – intelligence functions’ Yet data volumes are so huge make “approximate” entries under No wonder providers of business SAP says, as soon as current infor- and profitability if they raised or in risk added to the data crunching task. that until recently, uploading the most-similar existing code, intelligence systems report strong mation is available, directors want lowered prices, reduced a product management But the financial crisis has crys- information to accountants in the leading to budgets appearing to interest from potential clients. forward indicators, from sales, range, or added a new line within across the tallised a fundamental shift in to likely changes in their operat- middle-office only took place over- grow even as real spending on a Clearly, the first task of boards marketing and production, so that a particular price bracket. sector Bloomberg expectations of the CFO’s role: col- ing environment, and contingency night. particular item is falling. and IT chiefs is to find ways to they can extrapolate future finan- It is only once data become use- leagues want the historian to turn plans to respond to possible sce- Many corporate accounting sys- As a result of fragmented legacy make a harmonised and accurate cial performance. ful information of this sort, says forecaster. narios. tems are also inadequate for show- systems, poor data quality, lack of set of data available, preferably in Only once future financial Accenture’s Mr Meade, that the “For far too long, accounting Many of the key unpredictable ing accurately the state of the standard definitions and so on, real-time. Then directors have to trends in the business are clear, CFO can really start adding value has been historic,” says Andrew factors are financial: changes in business today, let alone providing many companies simply do not choose their key metrics and look can directors start to monitor indi- in the way boardroom colleagues Meade, managing partner for commodity prices, currency valua- clues to future performance. have reliable internal financial at how to answer the questions cators and model strategies to want. finance and performance improve- tions and interest rates, for exam- Financial data are often stuck in intelligence available to the arising about the future of the improve future performance or With the right financial informa- ment UK and Ireland at advisory ple. functional silos, cannot be recon- C-suite executives, analysts say. business. react to challenges such as falling tion, he says, a finance chief could firm Accenture. The abruptness of the credit cri- ciled, and quality is in any case Even when the data are there, In the first instance, a finance customer satisfaction. help them make better decisions “Companies spend too much sis unleashed by the collapse of compromised by “sclerosis” – the Nigel Rayner, research vice-presi- director needs answers to current “You have to include monitoring across the organisation, from time sorting out and reconciling investment bank Lehman Broth- failure to modernise systems or dent at Gartner, says: “Our esti- questions: how much working cap- and build in remediation plans,” reshaping business models to sign- their history before trying to sort ers in September 2008 showed that even simple data definitions, to mate is that only about 20 per cent ital is tied up in the business? says Mr Fisher. ing tomorrow’s stars in the music out future trends . . . The real even banks with the most match organisational changes. of companies with the capability How much in the supply chain? “Many organisations are not industry.