The ERP/BI Connection

Nowadays, with the complexity of the business, the companies have a lot of data, but the most companies don't transform effectively the data into information to make better decisions. Based in this issue and with the necessity to do "more with less" in this time of tight economy, the Aberdeen Group published an interesting report entitled The ERP/BI Connection: Adding Value through Actionable Intelligence, written by David Hatch and Cindy Jutras, both Vice Presidents of the Aberdeen Group.

They published in the Executive Summary: "Prompted by volatile markets and a troubled economy, the need to reduce costs is the top business driver impacting Enterprise Resource Planning (ERP) strategies. Combine this need with the ever-increasing need for transparency to both public and privately held companies and the marriage of ERP with Business Intelligence (BI) becomes the perfect storm, igniting improved performance and visibility. This report serves as a benchmark to those companies seeking these results."

According the report, the main requirement behind BI Deployment is to improve the speed of access to relevant business data, and it is the key to transparency, visibility, and informed decision-making.

The report makes some recommendations to the companies:
- Take an integrated approach: Form cross-functional teams for implementation and continuous improvement of ERP; use BI to extract intelligence at each step
- Form a "competency center" or "center of excellence" that is comprised of key management from both IT and line management
- Provide formal BI training
- Develop a mechanism to notify decision makers of exceptions; use BI, workflow, and event management to manage alerts and notifications

"ERP can transform data into information but BI tools are required to complete the transformation from information to intelligence," defines the report.

"The good news is that BI tools have reached a level of maturity which can elevate executives from the depth of the details, bringing them to a higher operating level where they can add strategic value to the organization. The ability to provide better decision support with integrated enterprise data is an important factor in turning data into actionable intelligence. The synergistic relationship between ERP and BI can indeed be the perfect storm, igniting improved performance and visibility", the authors conclude.

The report can be downloaded in the Aberdeen's site (registration required).

Pervasive BI: Steps to Enterprise-Wide Business Intelligence

The Aberdeen Group recently conducted a research and wrote a good benchmark report, entitled Pervasive BI: Six Steps to Enterprise-Wide Business Intelligence, by David Hatch, Vice President, Group Director, Technology Research of the Aberdeen Group.

In the Executive Summary of the report, they define: "Organizations are facing pressure to deliver actionable information to the enterprise that is timely and effective toward meeting business goals. This requires that companies have access to the information, the ability to combine, aggregate and integrate the information, and deliver self-service access to BI for non-technical end-users when, where, and how they need it.

Aberdeen research conducted among over 7,000 users of BI during the past 18 months has revealed that a lack of IT resources and BI skill sets has resulted in projects that are delayed, over-budget, and are often lacking the data and information necessary to meet business goals. This study, conducted among 370 business professionals, will reveal the specific methods and approaches that top-performing companies are taking to improve the pervasiveness of business intelligence access, usage, and effectiveness."

Aberdeen begins the report defining a benchmarking for the Best-in-Class. In the report, they also define a benchmarking requirements to success, and the required actions. They uses 3 key performance criteria to distinguish Best-in-Class companies: Self-Service Delivery of BI Capability, Penetration of BI Capabilities in the Company, and Time to completion of BI Projects. In the required actions, they make some specific recommendations, considering the companies must: solve data integration and modeling issues, wean users off of spreadsheets, and integrate BI within existing enterprise applications.

The report can be downloaded in the Aberdeen's site, with free registration required.

Several executives trust gut

CIO.com published this month, a post by Thomas Wailgum, entitled To Hell with Business Intelligence: 40 Percent of Execs Trust Gut. He wrote about a recent research from Accenture. According the research, nearly half (40 percent) of major corporate decisions are based on the good 'ole gut. Accenture surveyed more than 250 executives in July 2008 about their companies' use of and investment in business analytics to remain competitive.

He started his post with: "The gut. That amazing piece of the human body's digestive system has influenced personal and business decision-making for centuries.

And apparently, the gut is still alive and well as a business tool inside today's corporate environments—even with the server farms' worth of enterprisewide business intelligence (BI), CRM, ERP and supply chain data that companies have amassed over the years."

Some numbers of the research:
- 61 percent said it was because good data was not available.
- 55 percent said their decisions relied on qualitative and subjective factors.
- 23 percent said "insufficient quantitative skills in employees" were a main impediment at their company.
- 36 percent said their company "faces a shortage of analytical talent."

He also mentioned a recent report from Aberdeen Group, by research director David Hatch. According him, the report examines why companies struggle with "one version of the truth" and how BI reporting and analytic tools fit into the picture. "Many organizations spend months and endure significant costs to obtain the reporting and analysis capabilities that BI promises," Hatch writes, "only to find that different 'versions of the truth' still exist without any definite way of determining which one is real or accurate."

Some numbers from the Aberdeen's report:
- 36 percent wanted to replace "gut-feel" decisions with "fact-based" ones.
- 72 percent said they are striving to increase their organization's business analytics and BI use.
- Two-thirds surveyed recognize their decision-making failings and want to fix them.

He finished with: "So, given all these data points, companies are starting to put their "money where their mouths are," when it comes to BI and analytics tools. But losing that gut-first instinct isn't going to be easy, and I'm not sold on whether companies can stomach the change required."

In my opinion, those numbers of the mentioned researches are reflecting how is difficult to implement a business intelligence and performance management initiative that works effectively. One of the main reasons is the lack of executive sponsorship and active business involvement. The BI/PM initiative should be designed thinking on business and with an active participation of the business people. The companies should to develop a BI Competency Center and also rethinking BI for processes. Last but not least, the companies need to concern about the data quality, establishing a policy of data governance. After all, if executives don't have accurate data to make decisions, left only to trust gut.

BI: Is One Version of the Truth Still Out There?

I read an article called BI: Is One Version of the Truth Still Out There? , in CRM Buyer, written by David Hatch, vice president and principal analyst of Aberdeen Group's business intelligence practice. He talks about the common issue that the organizations have, when spend months and endure significant costs to obtain the reporting and analysis capabilities that BI (business intelligence) technology promises, only to find that different "versions of the truth" still exist without any definite way of determining which one is real or accurate.

He answered "Yes" to the question: Is "One Version of the Truth" achievable?, based on a research from The Aberdeen Group.

Managers are questioning their level of trust in corporate data: Do the reports, charts and analytic tools in use today represent "the truth?" During August and September 2008, Aberdeen Group surveyed over 200 professionals from 155 companies and interviewed a diverse range of senior executives and operational management professionals working in different industries and geographies. Aberdeen published the research study, called One Version of the Truth 2.0: Are Your Decisions Based on Reality?.

He said that the majority of problems arise at the data source and integration levels, which explains why master data management (MDM) and data warehousing technologies and services are at the forefront of technology investment today, and also emphasized the importance of "data stewardship."

He recommended some actions:
- Start with end-user information requirements
- Build a working group or committee
- Focus on understanding data relationships to the end application
- Establish a formal data stewardship role
- Apply integration techniques to all data types from internal and external sources
- Security is not a job
- Develop and manage milestones.

In my opinion, the main challenge to the companies obtain a single version of the truth is to have a data management well implemented, it includes the concepts of data governance, data integration, data quality, and master data management.