Gathering and understanding accurate information is the lifeblood of businesses across all industries today. Critical data must be aggregated, searched, presented and analyzed — no doubt, a complex process. Although technology is only part of the story, something big is happening in business intelligence.
As we move forward in fast-paced business and low-margin manufacturing, it is important that manufacturing and business are careful not to adopt technology for technology’s sake.
Of more than 200 manufacturers recently surveyed by Aberdeen Group, 54 percent plan to adopt manufacturing intelligence (MI) within the next 24 months. Moreover, 56 percent of those manufacturers with manufacturing execution systems (MES) implemented these tools within the past two years. As IMT noted last week, Aberdeen’s recent “The Enterprise Value of Plant Floor Visibility” benchmark report found that best-in-class manufacturers:
• Are 26 percent more likely than other manufacturers to be providing plant floor data to executive decision makers;
• Are 31 percent more likely than other manufacturers to have integrated plant floor data with ERP; and
• Are four times more likely than other manufacturers to be utilizing Manufacturing Intelligence/Manufacturing Process Management (MI/MPM) and 40 percent more likely to have real-time plant-floor data capabilities.
Meanwhile, according to Aberdeen’s March 2007 “There is no Execution without Integration: MES Adoption Drives Performance” report, 77 percent of best-in-class manufacturing firms use automated data collection for production, inventory and quality data.
Yet gathering data is critical for all businesses beyond only those in manufacturing.
Business intelligence (BI) suites provide the platforms from which critical data is aggregated, searched, presented and analyzed. If you boil BI down to its basics, it is derived from two things: data and reports. Most of the effort in BI in the last decade has been focused on the data issues — integration, quality, cleansing, warehousing, modeling and governance. BI tools depend on these efforts. And up-to-date information helps drive business processes.
Nearly half of the 500 information technology (IT) professionals recently surveyed by InformationWeek Research plan to increase spending on software for viewing and analyzing business information above 2006 levels. Another 40 percent said they would maintain business intelligence (BI) spending at last year’s level.
Meanwhile, Forrester estimates that BI platform revenues will reach $7.3 billion by 2008, and CIOs surveyed by Gartner identified BI as their No. 2 technology priority last year, up from No. 10 in 2004, according to Network Computing‘s “The State of Business Intelligence” in March 2007.
So far, though, many companies are still slow to expand the use of BI tools beyond their finance and IT departments, due in part to the software being costly and difficult to use. (However, most will consider a software-as-a-service, or SAS, model for BI, presumably to eliminate some of the upfront implementation costs.) The InformationWeek survey found usability, the time and expense of training, and up-front and ongoing costs as barriers to BI adoption.
Moreover, data must also be pulled from disparate sources such as ERP, order entry and inventory management. Indeed, it is a complex process.
Part of the reason for the relatively low penetration rate of BI tools — generally pegged at less than 20 percent of potential customers — may be that “too many BI platforms are mired in historical analysis across siloed back ends,” according to Network Computing:
The action is in a new, more integrated world of dynamic, real-time information that’s emerging from Microsoft, Oracle and other BI vendors. These suites empower real users — not IT pros drafted into duty — and let them draw valuable data from processes, events and other sources beyond conventional data warehouses.
In fact, something significant seems to be happening in business intelligence. There is “a transformational change going on,” Network Computing’s “The State of Business Intelligence” states: “Next-generation BI promises speedier, automated decision-making, thanks to affordable computing and storage platforms and advances in business activity monitoring.” It promises “simplicity, universal access, real-time insight, collaboration, operational intelligence, connected services and a level of information abstraction that supports far greater agility and speed of analysis,” according to Intelligent Enterprise.
The next era of BI goes far beyond only data and reporting, extending beyond the organization’s boundaries, becoming proactive and operational, integrated with business processes, Intelligent Enterprise proposes.
The catalyst for this shift, or transformation, is the need to move analytical intelligence into operations and to shrink the gap between analysis and action. Typically, BI has been a disconnected activity, with users unable to traverse the big gap between information and action.
“Many organizations have realized that their investments in BI have not been viewed as important when compared to annual IT investments overall,” notes Mark Smith at the Intelligent Enterprise Weblog.
Although this is beginning to change and CIOs rank it as important, BI spend has not yet reached significant levels. For BI to become pervasive, it must provide simple, personal analytical tools on an as-needed basis with a minimal footprint and cost.
Major challenges to more widespread adoption include software/implementation complexity and unclear ROI. These are non-trivial challenges from both a technical and business perspective.
BI tools may be improving, but technology is only part of the story. To succeed, says Intelligent Enterprise, “you must develop measures, set a strategy, manage effectively, ensure executive support, choose the right tools, standardize on a platform and align the BI strategy with business.” The following are Intelligent Enterprise’s “Seven Pillars of BI Success”:
“If deploying modern tools to ensure optimal business performance is one of your priorities,” writes Smith at the Intelligent Enterprise Weblog, “ensure that your organization has a comprehensive strategy for BI that includes making your operations more intelligent putting in place the right set of tools to make this happen.”
Recent findings seem to indicate that although everybody is talking about BI, not everybody is seizing the opportunity — or are failing to succeed at it — at least to the extent expected.
At its inaugural BI Conference in Seattle earlier this month, Microsoft touted its “BI for everyone” message, vowing a “ten-fold” increase in BI adoption.” Also this month, Business Objects proclaimed BI for “all individuals” in introducing new products.
Yet only one in four respondents to the InformationWeek survey said their companies provide BI tools to more than a quarter of employees, the same level as in the prior year’s survey.
To Intelligent Enterprise, it seems more like a natural evolution, not quite happening in a smooth, continuous fashion.
The Enterprise Value of Plant floor Visibility: Empowering Executive Decision Makers
by Mehul Shah and Matthew Littlefield
Aberdeen Group, March 2007
There is no Execution without Integration: MES Adoption Drives Performance
by Mehul Shah and Matthew Littlefield
Aberdeen Group, March 2007
Many Companies Plan To Increase BI Spending
by Mary Hayes Weier and Lisa Smith
InformationWeek, March 17, 2007
The State of Business Intelligence
by David Stodder
Network Computing, March 29, 2007
Business Intelligence 2.0: Simpler, More Accessible, Inevitable
by Neil Raden
Intelligent Enterprise, Feb. 1, 2007
Do You Have Business Intelligence?
by Mark Smith
Intelligent Enterprise Weblog, May 1, 2007
The Seven Pillars of BI Success
by Cindi Howson
Intelligent Enterprise, Sept. 1, 2006
Microsoft Vows Ten-Fold Increase in BI Adoption
by Doug Henschen
Intelligent Enterprise, May 10, 2007
Analyze This: How Many Employees Really Need Business Intelligence Tools?
by Mary Hayes Weier
Intelligent Enterprise, May 5, 2007
Six Steps Toward Spreading BI
by Rajan Chandras
Intelligent Enterprise Weblog, May 3, 2007