Introducing business intelligence 2.0
Jim Honerkamp says there were many reasons for implementing business intelligence—or BI—systems at The Hillman Group, one of which was eliminating employee reliance on the IT department for critical information. “We don't want the IT department to be an information gatekeeper,” says Honerkamp, VP and CIO at Hillman, a Cincinnati-based supplier of hardware items, and a m...
Jim Honerkamp says there were many reasons for implementing business intelligence—or BI—systems at The Hillman Group , one of which was eliminating employee reliance on the IT department for critical information.
“We don't want the IT department to be an information gatekeeper,” says Honerkamp, VP and CIO at Hillman, a Cincinnati-based supplier of hardware items, and a manufacturer and distributor of key duplication and engraving systems. “Instead we want to provide tools that enable people to make good decisions faster.”
That's a common goal among manufacturers, and thanks to the latest generation of BI solutions, it's one that more are finding within reach.
In their quest to make corporate data more accessible—and more useful—to the masses of enterprise workers, business intelligence software vendors have embraced essential elements of what is arguably the most successful form of mass media ever: the World Wide Web.
Almost all BI vendors now offer completely Web-based systems. That means anyone who knows how to use a Web browser—virtually the entire workforce in most companies—can immediately begin extracting meaningful data from almost any BI solution.
Vendors also are modeling user interfaces after popular consumer-oriented Web portals like Google or Yahoo! These sites let users organize information according to their individual preferences. Some of these interfaces accommodate the use of Web 2.0 technologies like Adobe Flash for the creation of animated charts and graphs, as well as converting reports into PDFs or presenting them as Microsoft Excel or PowerPoint files. These developments have caused some to dub this new generation of tools BI 2.0.
Labels aside, users are enamored of the business value these new intelligence solutions can offer. For instance, Honerkamp likes the options for presenting data that are available in the WebFOCUS BI package that The Hillman Group purchased from Information Builders .
The WebFOCUS interface is essentially an IBM WebSphere portal that allows users to aggregate information from multiple sources onto a single desktop. Hillman used this capability to embed the company's financial plan into each of its executives' portals. So when they are examining things like sales by channel or product line, they can see how those items are performing relative to the company's overall goals.
The solution also supports the use of clear visual indicators such as red, yellow, or green lines to highlight the status of the various metrics being examined. For Hillman executives, that leads to quick recognition—and resolution—of problems.
Predicting the future
Vendors say the ultimate goal in harnessing Web-based technology is moving business intelligence beyond the point of giving users reports that summarize past performance—even if those reports are looking at the immediate past. Instead they want to offer ways of looking at leading indicators, which should enable business executives to spot and head off potential problems. ( See sidebar for more on the concept of “predictive BI.”}
“To become more 'intelligent' and remain competitive, organizations need to understand the whole picture: the current state of business, as well as where it's been, and where it's headed,” says Rachel Shortt, director of product marketing at BI solutions supplier LogiXML . “This information can only be gleaned through a combination of reporting and analysis.”
Shortt also believes companies need multiple types of reporting and analysis.
“They need corporate reports created by technical users and delivered to personnel across the organization, and less formal, ad-hoc analysis that any business user can do—on-demand—to get answers to unpredictable and immediate questions,” she says.
To make this happen, Shortt contends, BI must offer robust search capabilities and collaborative tools that facilitate data sharing among groups of colleagues—even the ability for users to receive regular updates on certain types of information pushed to their desktops through mechanisms like RSS feeds.
Other BI vendors share this vision.
“The whole notion of BI for the masses is a key industry driver because companies want to push data in the right format throughout the organization, and solution suppliers are working on technology that can make it happen,” says Mike Newkirk, global marketing manager, manufacturing and supply chain at business intelligence solutions supplier SAS .
“The reality is there's a vast amount of complex information residing on the average company's intranet,” Newkirk explains. “Manufacturers understand that the real power of BI is the ability to make sense of all that data and present it in a way that makes sense to users.”
The result, Newkirk adds, are BI dashboards that resemble rich user interfaces, displaying animated charts and graphs, and “creating a much more personal and interactive user experience.”
Cognos , which describes itself as a business intelligence and corporate performance management software supplier, has moved into this new era of BI by merging all of its reporting and analysis tools onto a single service-oriented architecture (SOA) platform. In addition to offering easier access to traditional Cognos reporting and analysis tools, the new SOA-based software suite—called Cognos 8 BI—allows users to tap into these new solutions:
Cognos Go! Mobile, which enables access to BI reports using a BlackBerry handheld device;
Cognos Go! Search, which leverages Google OneBox or IBM OmniFind search applications; and
Cognos 8 BI Analysis for Microsoft Excel, which enables multidimensional analysis of Cognos-generated data in Excel spreadsheets.
The HallStar Co. , a Chicago-based maker of materials used extensively in the production of rubber, plastics, adhesives, and coatings, chose the Cognos BI solution because it offered an easy way for users to get meaningful data out of the company's Lawson ERP system.
Prior to adopting the Cognos solution, IT had become the query department, with employees requesting access to numbers, data, and statistics from every facet of the business.
Chuck Redpath, HallStar's director of IT, was attracted to Cognos BI because “the way the data was put together and presented to end users made a lot of sense. The Web front-end also was important because everyone knows how to use a Web browser. Due to this ease of use, we knew we could get users up and running with only about a half-hour of training.”
Today HallStar is among a growing number of manufacturers that consider BI a “killer app” that drives significant business value. The Hillman Group is another.
More than 800 Hillman employees—including 500 who work remotely—access WebFOCUS reports via Web browsers. They also use the same interface to conduct queries, change formats, and drill down and export data that can help achieve company goals such as reducing inventory and increasing sales.
Hillman also combined BI capabilities with GIS (geographic information system) technology to create an application for managing product shipments. On a single screen, the solution displays Hillman's 12 distribution centers, UPS route maps, and data about Hillman's upcoming shipments.
“We've got about a half-dozen applications being developed with a geographic motif,” Honerkamp says. “The overlay with UPS maps unearths exceptions so we can tell, for instance, if we are shipping out of the correct distribution center for a specific shipment. We also have the ability to evaluate product penetration by geographic areas, which allows us to see where we make sales—and where we don't—so we can target any missed opportunities.”
While BI 2.0 is giving users more ways to access data than ever before, some industry experts say this is only the beginning.
“The next step is making all this data available on-demand,” says Steve Williams, senior director of product marketing with BI solution provider Business Objects . “That means not only allowing remote workers to access BI data via mobile devices, but allowing your partners—suppliers and customers—to have that same kind of access.”
Some manufacturers already are moving in that direction. Ogden, Utah-based Petersen Inc. offers custom fabrication and precision machining, as well as warehousing & distribution services. In addition to its in-house manufacturing capacity, the company's Small Precision Machining division employs fabrication partners to keep pace with high levels of product demand.
When Petersen's partners asked for a way of getting quick feedback on how well they were meeting performance expectations, Petersen's IT department responded with a supplier portal linked to the LogiXML business intelligence platform.
James Beames, Petersen's IT systems engineer, already had built nearly 100 Web-based reports for internal users on the platform. For Petersen's suppliers, he simply created a report that generates numbers related to on-time performance and other supplier metrics, and made it available through a separate secure portal. This portal also lets suppliers drill down for in-depth information about factors that are affecting their performance, allowing them to take action for meeting—or beating—Petersen's expectations.
“Because this is a pure Web-based system, I'm able to constantly add new features without having to change any software on the partner side,” Beames says. “Plus, as LogiXML regularly pushes out new functionality, I can easily incorporate it. We're very happy with the portal, and our partners have enthusiastically embraced it.”
Manufacturers seem to have the same general reaction to the emergence of Business Intelligence 2.0.
The next stage: predictive BI
The idea that business intelligence (BI) tools can have a significant positive impact on the corporate bottom line is now a widely accepted fact. Yet some industry observers say these tools haven't even come close to reaching their full potential because they still are used primarily to assess current or past business performance.
These observers believe BI's full value will surface when it can make companies proactive—rather than reactive—problem solvers. The Hillman Group , a Cincinnati-based supplier of hardware items, and a manufacturer and distributor of key duplication and engraving systems, believes it is on the road to developing such “predictive BI” solutions.
“We've literally changed the way we do business using BI,” says Jim Honerkamp, a Hillman VP and CIO. “Our goal has been to reduce the time from identification of a business issue to reaching a decision point—and in some cases we've reduced the time frame from weeks to minutes. However, we're looking for more.”
Honerkamp says in the past, if the company's margins shrank due to raw material price increases, Hillman would raise its prices—but it would only be able to do so after its bottom line already had taken a hit. Today Hillman is able to see when raw material prices are climbing so it can increase prices accordingly, but that's still reactive, Honerkamp says.
“Following a more predictive BI model, we could raise our prices before our margins are affected,” he says. “Predictive BI is intriguing—and we are investigating it—but it's also a challenge to identify true leading indicators outside our four walls, such as housing starts and material costs, and then link them to lagging indicators like margins. We clearly see the opportunity, and we're exploring it.”
Jim Fulcher can be reached firstname.lastname@example.org