• Project Manager - IT Relocation...
• Business Program Manager - Large...
• NETWORK PROJECT MANAGER
• Project Manager - 3 days - Part...
• Project Analyst

Reality checks

Heather Harreld, Information Age

10/12/2002 17:13:59

Reality checks

The economic downturn has propelled business intelligence (BI) data to centre stage as companies struggle to transform transactional data into critical performance reports that executives can leverage to ensure the enterprise is meeting strategic goals.

BI vendors that once limited their wares to reporting and querying technologies are increasingly adding business performance management (BPM) analytics on top of their platforms. This extends BI data outside the realm of the traditional "power user", such as business analysts, to propagate the entire enterprise via scorecards and executive dashboardsThe ultimate goal is to ratchet the BI data locked in transaction-system silos up to the executive suite for daily comparison to strategic goals and budget targets. As a result, an executive can be notified within minutes of critical variations in sales or production, instead of learning about them at quarter's end.

"The transaction-capture piece is important, but what companies really want to get to is this information system that gives them a good barometer of where their business is at any point in time," says John Hagerty, an analyst at AMR Research.

Capturing these current updates on company health is becoming even more critical for enterprises seeking enhanced visibility into operations. The struggling economy is applying intense pressure to the bottom line, and C-level executives are increasingly required by the federal government to certify the accuracy of financial reports.

The push for BPM is also sparking a rash of partnerships and strategy changes among enterprise app vendors and BI players. Comshare and Microsoft, for example, teamed in July to link Comshare's CPM (Corporate Performance Management) solution with Microsoft's BI platform to provide execs with an integrated system to monitor company performance.

"The economic downturn has companies whipping out their magnifying glasses to try to find where every penny of their business is going," says Dave Kellogg, senior group vice president of worldwide marketing at Business Objects SA. "We're seeing a lot of interest in BPM. In a perverse way, the recession has actually helped the BI business."

Seeking better visibility

Pushing BI throughout the enterprise creates the foundation for solid BPM capabilities, which means plugging BI into multiple enterprise systems. Hyperion Solutions' Business Performance Management Suite, for example, is based on an integrated BI platform designed to allow companies to set goals; plan targets; and measure, predict, and report results in a collaborative way across an extended enterprise.

The suite is designed to boost the yield from ERP systems, which oftentimes hail from multiple vendors, says Nazhin Zarghamee, chief marketing officer of Hyperion.

"What [companies] are looking for is a platform that can scale across all the ERP systems that can unify all the operational information that comes out of these systems and apply analytics on top of that," Zarghamee says. "It's extending planning outside of the purview of 'just finance' to all the other departments. The CFO is trying to move from [being] a scorekeeper, to a change agent and strategic partner to the business units."

Indeed, boosting visibility into various operating units was the goal for printing company Zebra Technologies. It is leveraging Hyperion's technology to build a performance management system, says vp Todd Naughton.

"Instead of the budget becoming the strategy, it is something to track and monitor the strategy," Naughton adds. "BPM can give that visibility throughout the organisation and get people focused on not just the financial measures ... but where we've always fallen down is on other perspectives, [such as] what about our customers, what about our process, what about our employees?"

This type of overarching view of the business landscape also figures into BI vendor Cognos' CPM framework, rolled out in April, which includes planning, budgeting, reporting, analysis, forecasting, and score-carding -- all designed to provide executives with a "digital cockpit" to run the business.

Crucial to the Cognos approach is allowing users to take action -- such as adjusting budgets midway through a quarter -- based on alerts within the cockpit, says Don Campbell, its vice president of product innovation and technology.

"We can apply the strategy of the company to the data and allow you to get a higher order of understanding of it by rolling it up appropriately against your strategy," Campbell explains. "It really becomes a complex network of business performance indicators. That is where you break away from just financial numbers."

Automatic responses and immediate reaction to new data may be some of BPM's most valuable qualities for executives under pressure to keep a close eye on their company's progress. Navigant International, an international travel management company, is leveraging digital dashboard technology from Brio to provide clients with enhanced visibility into travel expenditures and corporate policy compliance, says Neville Teagarden, CIO of Navigant International.

This allows executives to take immediate action if employees are not booking airfares 14 days in advance or are using hotels that are not under a volume discount contract, Teagarden explains.

"We've got dashboards targeted at a number of different audiences, such as the department manager level, the travel manager level, and the executive level," he says. "It really allows the executive-level management to manage by exception."

Race for performance management

While BI vendors are layering analytics on top of their platforms, enterprise application vendors are moving to embed analytics directly into their enterprise applications to measure overall business performance on the basis of data pulled from across their application suite.

Enterprise vendors are particularly well-suited to business performance management because it requires cross-domain analytics that break through the walls of business silos, says Jagdish Mirani, Oracle's senior marketing director of financial and business intelligence applications. Oracle launched a new marketing campaign in August called "Manage by Fact", designed to promote its performance management framework. The framework is a BI layer within Oracle's e-business suite that collects the metrics spanning various enterprise apps to measure business operations.

Determining customer satisfaction or customer profitability, for example, requires rolling up enterprise data from multiple departments, including marketing, sales, support, and service, Mirani explains.

"We don't want multiple performance metrics that represent shades of things because those shades are difficult to reconcile," Mirani says. "The information has to come together from so many different places, [and] that can only happen when you have integration of your operational applications. We embed the data warehouse within the e-business suite; the information is consolidated at the start, and you don't have to go through all these protracted refresh cycles."

PeopleSoft has also launched an initiative to embed analytics into the business process portion of its business applications. It will ship embedded analytics in its customer relationship management suite this year, and in its supply chain and financial management applications in the first half of 2003, says Chuck Teller, PeopleSoft product strategy vice president of financial management and enterprise performance management.

Adding analytics to these applications will let PeopleSoft provide access to information and more interaction with the apps. A dashboard into the field service applications, for instance, would display analysis of field service technicians, parts, and other resources, allowing an executive to view the current utilisation rate and test various potential app-usage scenarios on the fly to analyse their possible impact on operations, Teller adds.

"The BI vendor can't get that far into the business process," Teller says. "We're going to work with [BI vendors] ... on top of our enterprise warehouse to deliver reports."

In the end, though, the ultimate victor in the BI and enterprise application vendors' race for the BPM arena might depend upon a company's particular IT environment, notes AMR's Hagerty.

For those with a heterogeneous environment, relying on one vendor might not be feasible, so a BI vendor would have an advantage, he says. As the space evolves, however, the pendulum may swing back to the enterprise vendors as the next generation of BPM analytics evolves to perform corrective actions automatically, Hagerty predicts.

"If you want to be able to cut spending because you've discovered that the order you thought would come in isn't going to happen, [BPM analytics] would bring you to the system to cancel a purchase order. The enterprise application vendor can bring you to a place in their application that makes sense [for that correction]," Hagerty explains.