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Issue of December 2006 

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Telescope 2007

Business Intelligence

The use of BI by India Inc. is becoming quite sophisticated. As companies come to rely upon BI, they can choose one out of two divergent routes—go in for a dedicated BI solution from a pure-play vendor who focusses only on Business Intelligence or add BI tools to an existing ERP system. Priya Jain interprets the kind of BI requirements that companies have and how available options fit into their set parameters of cost, functionality, flexibility and RoI. The decision of these companies is also based on the credibility of a vendor, the complexity of analytical reporting that is required, heterogeneity of applications, and enormity of the business.

Indian enterprises have woken up to the need of analytical reporting to make successful decisions and carry through a profitable and competitive business. Business Intelligence (BI) solutions have tremendous potential to deliver the right value and provide the required ‘intelligence’ to these organisations. A variety of BI tools in the market serve this purpose. They are either available through pure-play vendors as pure components of BI or through ERP vendors who add BI tools to the existing ERP system.

Today companies are turning to BI to derive better return on investment from ERP and other operational implementations, by unlocking the wealth of information stored in these systems

Today companies are turning to BI to derive better return on investment (RoI) from ERP and other operational implementations, by unlocking the wealth of information stored in these systems. Shopper’s Stop uses its BI platform for CRM analysis and operational performance analysis for some of its retail formats.

Krishnan T M

Unni Krishnan T M, Customer Care Associate & CTO, Solutions & Technology Team, Shopper’s Stop states, “Currently we are in the second generation of BI evolution. We have always recognised the need for BI to drive better customer interaction and gain operational efficiencies.”

Dewan Housing Finance is presently using a core finance application on its in-house built ERP for reporting purposes, but has recognised the need for detailed analysis and ease of reporting. For the same, in the next financial year it is planning to go in for a BI tool through a pure-play BI vendor.

Analyst’s Eye View
  • Alok Shende, Director, ICT Practice, Frost and Sullivan:
    The choice of the type of BI depends on the requirement of the company. Organisations that are not keen on any further advancement than ERP prefer to have an add-on layer of BI. And organisations that have a lot of heterogeneity in terms of applications and complex requirements for decision-making opt for pure-play BI tools. Their requirement is about sophisticated decision-making in a complex environment

    Trends of Adoption

  • Companies that have implemented CRM easily understand the BI needs and hence are the most potent customers for the BI solution
  • Companies which do not have analytics embedded in their CRM applications are likely movers to BI
  • Enterprises that have implemented ERP and SCM, and now implementing CRM solutions, are bound to generate huge operational data, which can be easily converted to strategically important information using BI tools
  • Query and Reporting (Q&R) is gathering momentum in the Indian industry. However, the problem areas continue to exist in the form of obsolete and un-cleansed data warehouses
  • Technical challenges have stopped many Indian businesses from implementing BI solutions

    Hallmarks of a Successful Implementation

  • Choosing a user-friendly tool for business-users to be able to use the BI system effectively
  • Extracting, transforming, and cleaning the data from different sources to bring it to a uniform format is key in building a successful BI system
  • From the consulting point-of-view, domain expertise in building a successful BI system is the key
  • Training is another key component in any BI

Centurion Bank of Punjab has gone a step ahead and is implementing a total solution of Enterprise Data Warehouse, Data Quality, KYC (Know Your Customer), Analytics, BI and Customer Intelligence. This solution is the SAS 9.x and Banking Intelligence Solution (BIS). It is an enterprise solution and not a simple BI tool. It integrates with all their 14 main Banking Business Solutions.

Sanjay Narkar

Sanjay Narkar, Chief Technology Officer, Centurion Bank of Punjab elaborates: “Being a private bank with a presence across 160 locations and 249 branches in India, the need of BI plays a key role in achieving our business goals. While offering various customer services and 50 plus banking and financial products to three million customers, it is important for the bank to do business with a long-term customer relationship benefitting both the bank and the customer.”

The solution is being used in the bank to support all the decisions, future-planning, monitoring, customer relationship management, budgeting and planning, marketing, predictive analysis, profitability analysis, new customer acquisition, campaign management, customer transaction analysis, performance management and enterprise MIS requirement.

  • Sanjay Deshmukh, Country Sales Manager, India / SAARC, Business Objects:

When companies implement a number of heterogeneous applications it becomes a laborious and time-consuming task to collate and analyse data from these applications for reporting purposes. To fulfil this need the customer has the option of going either to a pure-play BI vendor or an ERP vendor to add a BI feature to the existing ERP system. Adding a BI tool is a good bargain in terms of logical discussion, but not practically helpful.

The fact remains that the core competency of an ERP vendor lies in building a good ERP product and not in building an efficient BI tool. Moreover an ERP integrated BI does not provide a user-friendly interface between heterogeneous applications and does not facilitate the flexibility that is required to do complex analysis.

Another aspect that should be considered while going in for BI are
parameters, such as the time of implementation, RoI, functionality, flexibility and cost. A customer opting for a BI tool added to ERP will only be profitable by 25 percent taking into account the parameter of cost, while the other parameters can successfully be achieved only through a pure-play BI tool.

  • Arun Ramachandran, Head, Presales and Professional Services, India and Subcontinent, Sybase:

Pure-play tools are generally preferred as they add more in-depth functionality, and give a rich application framework to the customers such as churn, credit score etc.

Both the options i.e. BI components and BI tools added to the existing ERP are equally well positioned for delivering low-cost, ease-of-use as well as a good RoI. Interoperability is no longer an issue in this space.

  • Sudipta Sen, CEO and Managing Director,
    SAS Institute India:

By the SAS definition, a platform doesn’t offer true business intelligence unless it satisfies the following criteria:
Breadth: It integrates functions and technologies from across the enterprise
Depth: It reaches all in a way that is relevant to them
Completeness: It is a comprehensive, end-to-end platform
Advanced analytics: It delivers predictive insights, not just hindsight
Data quality: It gives applications a validated and verified version of
the facts
Intelligent storage: It meets the information needs of intelligence

It is important for an organisation to consider and evaluate BI solutions based on the above attributes for achieving the desired business objectives.

  • Nagaraj Bhargava, Director, Marketing and Strategic Operations,
    SAP India:

Earlier, organisations were leveraging ERP for standardisation and improvement in organisational efficiencies.

Today, we observe companies using ERP to address an extending set of business requirements and improve the competitiveness and performance. ERP is no longer being used for only financial or cost accounting. It is being used for financial management processes and enables CFOs to improve insight, strengthen internal controls for financial reporting and provide transparency to all operations and manage and expose risks to the enterprise.

In the area of human capital management, ERP is now used to recruit and engage new employees, train and deploy talent accordingly, and support new business models that involve shared-services and outsourcing. Therefore Business Intelligence is an important tool in this mix and organisations are leveraging BI to seamlessly integrate business information across their organisations, improve transparency, speed up decision-making and better target their specific markets.

This or that?

The choice between going in for BI components and adding a BI tool to the existing ERP depends on the volume of data, complexity of analysis, type of industry, business processes to be analysed, company maturity and most importantly the budget available. Moreover the maturity of both these versions in the market, and the core competencies of the vendors also play a major role in the goodwill of the product in the market and its acceptance by the customer.

Satish Kotian

Satish Kotian, Head, IT, Dewan Housing Finance informs, “With BI our organisation will have the capability to do business with absolute flexibility. All users and customers will have the privilege to deal with the right set of data.”

Krishnan points out, “ERP applications are increasingly moving into this space, but it will take time for them to attain the expertise that pure-play ones have gained over a period of time. There are certain inherent challenges that arise from the architecture of an ERP application, which will have a limiting effect on delivering what BI pure-play companies deliver today. When one is looking at complex stimulatory, what-if, predictive modelling and high-end mathematical analysis one would still need pure-play solutions when the base data runs into several terabytes.”

Narkar says, “Adding the tools to the existing core solution will always have limitations, because core systems are never expected to work for lengthy analysis. It will affect the performance of the application. Further, getting the BI requirements done through the core solution never satisfies the BI needs of the analytics users. If you have more than one major business solution, then getting the right BI results becomes difficult. Therefore in our view, it is always a better option to have the BI solution separate from the core solutions, which gives the advantage of management, maintenance and on-going development.”

Giving a perspective of the banking industry, Narkar explains, “There is not a single solution, which will support all the businesses done by the bank and therefore the existence of multiple business solutions is a reality. Thus in the banking business the BI solution needs to sit outside the core solution, since it requires to consolidate the data from different source systems to produce the expected BI results.”

Matter of choice

The Indian market has become competitive with a number of players in a given industry segment. The customer is being presented with far greater number of choices and in such a scenario it is important to get closer to understand the demands of the customer.

“If you are a small organisation which is on the lower end of the technology adoption curve, it makes sense to go in for built-in BI modules provided by the ERP vendor,” opines Krishnan.

Kotian makes it clear, “Price is not an issue for us while going in for BI components, the need for analytical information for decision-making has overpowered the price issue. Moreover a BI tool added to our existing ERP would not give us the flexibility and features provided by the pure-play vendors.”

Narkar states, “We took a decision to deploy an enterprise solution based on our requirements and did not consider a BI tool approach. The criteria for selection were as follows; industry proven solution, open architecture, future roadmap, stability and credibility of the solution provider, reference and site visit of the installations, implementation partner’s domain knowledge and required skill-sets. The successful completion of a Proof-of- Concept with our existing core solutions is also a decision-making factor.”

Nonetheless, in the near future the decision of choosing what is better in BI will depend on the management of new business dynamics, time-to-market, customer service and internal process improvement. Most importantly it will catch the attention of companies that want to increase marketshare with an accurate and factual database of customers and trend analysis of their past transactions.

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