There comes a time in any organisation’s development where the managers start to feel that, despite all the data they have access to, they can’t quite figure out what was going on.

A recent survey by Business Week magazine found over 60 percent of people used “gut feel” to make decisions more than 50 percent of the time. And 77 percent of respondents said they were aware of bad decisions managers had made because of insufficient information.

A general ledger can only tell so much. If you want to dig deeper, you need a different kind of spade. That ‘spade’ is generally referred to as a Business Intelligence (BI) system. “Clients come to us to get visibility about how their organisation is working,” says John McDermott, a senior manager with the business intelligence division of HP Services.

He says all medium and large firms will now have an ERP system, which captures and processes business transactions. “ERP is operational. It’s about getting the day to day business running. But at some stage you have to see how the organisation is performing.”

Everyone involved in BI has a similar definition – it’s a way of turning your data into knowledge, into information, into business benefit.

It’s being able to do iterative “what if ” scenarios without having to wait for weeks and months while your information systems team processes your queries.

HP Services works with a range of tools and platforms. McDermott says his team will investigate what the client company is trying to achieve, what its business is, whether it is selling products or selling services. HP Services then builds a strategy for extracting the required data from core systems.

It is important to get the architecture right. Typically, a Business Intelligence system will involve sucking data out of one or many production databases and other systems, cleaning it up, and loading it into a specially configured database called a data warehouse, before running reporting tools through it.

“The majority of time you need to suck the data out because what you are trying to achieve with Business Intelligence can impact on day to day transaction processing because of the amount of processing power required,” McDermott says.

The value in Business Intelligence can also come in being able to compare different sets of data which may not normally need to live in the same system.

“At one end of the scale we have worked with small organisations with a single ERP application doing core transaction processing. At the other end we have worked with large organisations with disparate systems around the globe, a multitude of different ERP systems, different implementations of systems, and the requirement to present the value of that data at different levels – locally, regionally and globally,” he says.

Add to that the challenges faced by franchise-based businesses which may want to drill down as far as retail sales figures in their franchisees, and the potential scope of the challenge becomes clear.

There are a range of Business Intelligence tools and solutions in the New Zealand market, some home grown, some from the United States, and some from Europe. ERP and database vendors also package business intelligence tools into their suites, but the usual dynamics of best-of-breed versus suite apply – specialist vendors are often able to create a better match for an individual business, rather than a solution which may be just okay.

Important players in the market include Applix with TM1, Business Objects, which now includes Crystal, Cognos, whose suite now includes Adaytum, a budgeting and forecasting tool developed by New Zealanders, Q4Bis - another New Zealand-designed product , MIS DecisionWare, and Targit.

Business Objects
Eagle Technology has implemented Business Objects, one of the longest established products, to customers like Sky City and Noel Leeming, Vodafone, Telecom and McDonalds. Business Intelligence manager Carl Harris says such tools allows management to get up to date information on performance.

“It keeps them on the ball. They don’t have to wait three months for a techie to pull out the reports,” Harris says. “Business Objects becomes a broader and broader answer as time goes on. It is much more than a reporting tool.”

Harris says the whole Business Intelligence market is growing, not just in volume but in the breadth of the offerings. “Gone are the days when you used to print out a 50 page report and scroll down looking for one number at the bottom. Now we provide tools and capability for people to understand their business, look for trends or exceptions, work out what their business is really doing,” he says.

But Harris warns that for many companies, a successful business intelligence project will require a mindset change, requiring that managers come to expect to have information at their fingertips and use it to make decisions, rather than falling back on “gut feel”.

August 2006

By Adam Gifford

Applix TM1
Management consultants Cortell is the New Zealand agent for Massachusetts company Applix, whose TM1 OLAP (online analytical processing) tool is used by more than 70 percent of Fortune 500 companies.

Matthew Hill, Cortell’s Asia Pacific sales director, says New Zealand users include Telecom, Fonterra, ASB Bank and Ministry of Defence, as well as a large number of local bodies. TM1 is a proprietary multidimensional database sitting on a dedicated server. Rather than replicate the data in production systems, it just keeps a track of input elements in the model. That means it doesn’t need a data warehouse or data mart to operate.

It can store extremely large models in memory and make the calculations in real time, rather than the batch processing of competing OLAP designs.

“Most organisations would use TM1 for budgeting, forecasting and planning analytics. If you are using it for reporting, it can drill through down to the individual transaction level,” says Hill.

“We walk into any organisation and see the waste that goes on with the budget process. People are doing it in Excel, which means they spend a lot off time dragging stuff off the core system, then manipulating it. There is no integrity.” Excel can be used as an interface to the TM1 application, but data integrity is protected because the data continues to ‘live’ in the ERP system, and all the ERP controls and security are replicated through the model.

Applix was originally designed in 1984 for Mobil. It has been used in New Zealand since 1996, and has about 100 users here. New Plymouth District Council is one of the latest local organisations to install TM1, linking it in to its Fujitsu Corporate Vision financial system.

Graeme Trevathan, the council’s manager of business advice, says TM1’s first major test was preparing financial budgets for the community plan. “We used to do it with 105 Excel workbooks. We would then manually copy and paste the summaries into a master. “With TM1, we have linked it with the financial register which is Corporate Vision, and we bring the structures and the actuals out of that.”

He says it took six months to implement TM1 and build all the processes required to do the budget round. The project will cost over $100,000, but Trevathan says it is already cutting down the time required for the budget process. Any changes can be audited, which is not so easy when dealing with mounds of Excel spreadsheets.

He says the Excel route is no longer tenable. “We could have come up with the mechanics of the budget, but as soon as we tried to calculate the effects of inflation, we hit a brick wall. If we went back and recalculated the formulas on each of the worksheets, it would have taken 10 man-weeks. We had five days to produce a document,” he says.

Trevathan says TM1 will eventually be rolled out to council managers, so they can do better scenario planning when they prepare bids for projects or resources. “My team used to spend a lot of time reworking data to try to lighten the load for other managers. Now we can do more analysis and question things more thoroughly. It’s a smarter way to work,” Trevathan says.

Hummingbird
Auckland company RTI is the New Zealand agent for Canadian firm Hummingbird, one of the longest established reporting tools.

Director Dave Wakenshaw says the key to business intelligence is being able to sort through data in a meaningful way. He says that can be a regular view, such as a digital dashboard giving executives a set of key performance indicators when they log in each morning, or it could be project based, such as a sales team trying to work out what sort of customers are more likely to buy which products or services.

“What is important is to have a simple mechanism to pull data out and present it. Most business analysts are not SQL (structured query language) coders,” Wakenshaw says. “You also don’t want people like financial analysts doing SQL queries on your production databases. It could be dangerous, if they start altering the underlying data tables.”

Targit
Targit New Zealand director Chris Mitchell says the crunch time for a lot of companies comes when they realise they can’t give stakeholders or directors answers about performance because they can’t get usable information out of their data systems.

“The driving force is when they realise they are not able to run a smart business, as opposed to just completing tasks,” he says.

Most local Targit implementations are on Microsoft SQL Server, because it uses Microsoft’s analytical services, although Targit will deliver solutions on any relational database. “The important thing for a successful BI implementation is you are working with business users, not the IT department, so you need to ascertain the critical points in a business around performance, financial analysis, performance management,” says Mitchell.

He says Targit is positioned as “a business intelligence tool for the masses.” Coming out of Denmark, it has pre-built analytics for Danish ERP systems Navision and Axapta, which are now part of the Microsoft Dynamics business solution portfolio. Mitchell says an implementation can start for as low as $25,000.

“We brought it into New Zealand because we thought the market needed something which is cost effective yet functional. We scoured the world for Targit.” Mitchell says. He says business intelligence systems can pick up anomalies in performance which firms might not otherwise notice. “They also tend to reveal data quality issues, which is to be expected in reporting and analytics.

“It becomes particularly useful when mid-management can have access to information they otherwise found hard to get.” Targit is browser based, so as long as managers have web access, they can get their reports and analytics.

Q4Bis
Locally developed product Q4Bis has just won a Gartner award for best midrange solution software for the second year in a row.

“We have had a huge uptake in the US based on that. We just can’t cope with all the requests,” general manager Sunesh Samarasinghe says. So it can cope with requests, Q4Bis is taking on channel partners in the US for the first time.

Samarasinghe says Q4Bis is playing a major role in redefining Business Intelligence. “In the past when people spoke about Business Intelligence, there were visions of dollars signs. People thought ‘this will cost me half a million, and it will only be used by a special breed of people called analysts.’

“We have revolutionised the Business Intelligence industry, taken it from being the domain of highly skilled people to being for anyone.

“Our training manual is our mousepad. We call it the two-minute training programme.”

On many sites, Q4Bis lives alongside other more expensive Business Intelligence tools, says Samarasinghe. “People say it is good to have the expensive tools which are used by their technical people, but they have nightmares getting their executives to use them.”

Q4Bis has a simple interface that allows users to build query cubes without having SQL coding skills, he says. This means a basic implementation can be completed within two weeks. “We don’t sell consulting. We put our money where our mouth is and give a fixed price implementation,” Samarasinghe says.

Paul Martin, IT manager at Golden Bay Cement, says his firm put in Q4biz in 2000. “We started off using it for sales figures. It helped us to look deeper into sales,” Martin says “With the detail we could pull out of our JD Edwards ERP system, we were able to look right down to pricing by customer and product. We needed to understand who was buying what and when.”

Martin says one of Golden Bay Cement’s biggest costs was distribution, “we had to know our deliveries and sales were economical. Having the information out of Q4bis means we could decide whether to hold stock at consignment stores around the country or get it over to our own sites.”

The team then started looking at other areas in the business, so it could identify at a user level where costs were being incurred. “Rather than managing expenditure retrospectively, line mangers and team leaders can now manage costs as they are incurred,” Martin says.

“Then we took it a step further and moved to rationalise our suppliers. Knowing what you spend with suppliers helps with negotiation. And every supplier costs money to maintain a relationship with, so the fewer the better.”

Golden Bay Cement also uses Crystal Reports, which Martin says allows it to check the information it is getting out of Q4bis has integrity, and the Cognos Adaytum tool, which is used by the commercial team for budgeting and forecasting.

Fonterra churns Out KPIs to maintain quality

Fonterra’s ingredients business has integrated data from 20 disparate applications using an Oracle business intelligence system to give the organisation a clear and coherent picture of its performance.

onterra’s ingredients division provides dairy-based ingredients to the food industry worldwide, and oversees the entire process from milk collection, through manufacturing and logistics, and marketing. To maintain high product quality, reduced costs and manufacturing yield efficiency on a global scale, the Operations Ingredients business unit within Fonterra relies on key performance indicator (KPI) information.

Until mid 2003, the division’s KPIs were spreadsheet-based and prepared at various factories and sites. Each required manual entry and manipulation. The resulting information was disjointed and made it difficult to obtain accurate and up-to-date KPIs.

All this changed when Fonterra selected Oracle Database and tools to deploy a business intelligence solution that delivers accurate and timely information to key analysts and decision makers.

The data warehouse draws on data from more than 20 transactional systems, including Oracle Financials and Fonterra’s Materials Requirement Planning System, GEMMS, and it serves as the basic infrastructure for the KPI reporting system.

Once the specifications were agreed upon, the initial set of 23 KPIs were delivered in just 16 weeks and within budget.

Fonterra is now able to deliver its KPI reports to management faster because its Oracle data warehouse delivers reports directly from the database without replicating data to another server for user access. Eliminating these extra servers also simplifies maintenance, and managers can easily generate their own reports without the help of IT administrators by using Oracle Discoverer.

Oracle Portal updates portlets daily from the data warehouse which provide KPIs relating to 26 sites and over 40 factories. Additional portlets provide financial reports to cost centre managers throughout the organisation.

For more information on Oracle Business Intelligence Solutions Contact Paul Bacon on 09 977 2179