RSM Resources

When it comes to fueling growth, few things can turbocharge a company’s prospects faster than the right information at the right time. Business intelligence (BI) — the technical engine that allows users to slice and dice vast quantities of data to generate real-time reports or forecasts — can provide that information.

Technology that corrals a higher level of BI is increasingly available; however, experts say leaders of midsized companies should address the "why" before investing in the "how."

"CIOs are struggling to figure this out, especially since they are being asked to make business intelligence happen," says Mark Smith, CEO of Ventana Research, in a recent interview with CIO Decisions magazine. "The first step is to think about the foundation of BI, to look at it from a people, process and information perspective in order to understand the business need."

In 2005, the BI market grew by 11.5 percent to $5.7 billion worldwide, and experts estimate 2006 delivered another double-digit increase. That growth is especially noteworthy when compared with overall business software sales, which increased just 8 percent in 2005, according to research firm IDC.

BI software sales are increasing partly because newer systems are much simpler to use than previous versions. Earlier mainframe-based technologies quickly languished, so major software providers, including SAS, Cognos, Outlook Soft and Infor, have introduced Web-based tools that can standardize information-gathering in companies with $100 million to $1 billion in annual revenue.

In one of the most recent enhancements, Google paired its One Box for Enterprise tool with several BI software packages to offer enhanced search capability for both structured and unstructured data. The latter, experts say, is an important advance, because it can pull up key information that may not cleanly reside in a regular data file.

However, improved technology is only part of the story. According to Jim Cashin of RSM McGladrey CFO Advisory Services, BI tools are not a substitute for solid strategic thinking.

"It’s really important for a company to think through its current and future needs for business intelligence," he says. "If the company’s leaders are thoughtful about identifying a desired future state — in terms of growth or business goals — and defining key performance indicators that will help create competitive advantage, BI software is a great tool to help them get there."

Defining standards

As a general rule, midsized companies have some advantages over larger firms when it comes to selecting BI products. For instance, smaller businesses typically have lower volumes of data to manage and fewer IT platforms to maintain. That makes it easier for them to deploy tools that provide BI data to management and selected staff.

On the other hand, don’t consider relative simplicity a license to cut corners.

"Companies make the mistake of shortchanging themselves on BI design," Cashin says. "Failing to truly define performance measures and information requirements can lead to a system that’s neither flexible nor scalable enough to handle future needs," he says.

One key way to avoid these traps while increasing the software’s strategic value is to build a standard platform that allows BI to operate more efficiently with lower training and implementation costs. In the white paper "Standardizing Business Intelligence," Ventana Research offers the following checklist on selecting a BI platform that will meet current and future needs:

Broad coverage. BI standards must meet the big-picture needs of the company, which helps to minimize the need for "legacy" or other nonstandard technologies. Look for software products that cover production reporting, business reporting, adhoc query, online analytical process reporting, and dashboards or scorecards.

Modern service-oriented architecture. Standards for BI systems should build on other IT standards where possible, so look for technologies that use Web standards such as SOAP,XML and WDSL. It may be easier to integrate these architectures with existing systems, and they’ll adapt better as new technologies evolve.

Scalability. Look for products that can support both UNIX and Windows environments, and architecture that distributes load balancing across multiple servers.

Heterogeneous data access. Because most organizations have multiple data sources, a BI standard should support queries across all of these areas.

Global capability. As midsized companies grow and expand, an important consideration is whether a BI product can be deployed in multiple programming languages. Look for UNICODE throughout the software, not just in support of data sources. Also, choose a solution that doesn’t require separate reports for each language.

Security. Choose a BI standard that supports your company’s existing enterprise security approach.

Is your company ready to reap the benefits of an enterprise wide business intelligence software system? If so, consider the following business,technology and culture tips from CIO Decisions magazine:

Business

• Work across your organization to understand the kinds of information users need to make better decisions.
• Be willing to take a stand when demands regarding reports and analytic tools don’t match business objectives.
• Establish yourself as a partner in making the company better by offering practical alternatives to unrealistic requests.

Technology

• Understand your data — from where it resides to whether it’s clean enough to analyze.
• Pick an analytics solution that matches your business. For example, is a data warehouse overkill or necessary?
• Use IT resources efficiently by building interfaces and report structures that you can use for other purposes.

Culture

• Be willing to bend. The best BI system in the world is no good if users don’t like it or use it.
• Build success by starting with a small number of query options or reports and making sure they work.
• Find a high-level expert outside IT who can bring trust and legitimacy to a BI launch and implementation.

By taking these steps, you can effectively define your company’s BI needsand begin to choose and implement the best solution for the organization.