As an economic downturn becomes a sobering reality, enterprises look for various ways to increase revenues and reduce costs. While overall IT budgets become targets for cost cutting, business intelligence (BI) applications and infrastructure need not fall into the same category. It's during times of economic downturn that business intelligence (BI) tools really come into their own; because if used strategically, leveraging BI as a corporate asset assists companies to continue to survive, compete, and thrive. That's according to Glen Rabie, CEO of Yellowfin a leading BI solutions provider.
As Warren Buffet said “when the tide goes out it is easy to see who is swimming naked.” And right now the tide is going out. “Companies without BI capabilities need to act quickly, since without it they will be very exposed in the coming months and years” says Rabie. “For those companies without BI it is critical that they rapidly identify their key metrics and implement their BI solution rapidly, and it is highly unlikely that the mega-vendors are going to be enablers in this process”.
“BI provides companies with a central view of what's happening in the business. If a company's bottom line is not looking good, BI tools provide the ability to take a deep look at what's going on and get the nitty-gritty of why and where they are losing money. BI takes the guess work out of it and helps companies make better business decisions to improve the bottom line.”
“Right now companies which have invested in BI can really see a return on that investment. Now is the time to focus on better BI,” says Rabie. “In the face of the global economic crisis, rising costs and slow growth, tightly managing performance becomes even more critical. But without BI to show KPIs in a quick and highly visual manner, executives are left to ponder about who or what area of the business is not performing.
This is underpinned by recent Gartner research which stated that through 2012 more than 35 percent of the largest 5,000 companies will regularly fail to make insightful decisions about significant changes in their business and markets. Not surprisingly the overarching theme of BI will be to combat such errors and to instead deliver greater business value, the research firm said.
An interesting shift by the Analysts recently has been in their view of standardizing BI vendors within organization. No longer is BI tool consolidation seen as a strategic goal for the CIO. Rather there is a realization that given current cost and speed to market considerations, and the segmentation of BI into solution sets there has been a failure by the mega vendors to deliver.
According to Gartner, while some companies have attempted to standardize on a single application or platform to address technology needs, BI cannot be effectively implemented using this type of approach. There are often too many different types of vertical and functional requirements to be restricted to one standardized BI tool from a single vendor. A growing number of companies are recognizing that one size does not fit all, and are turning to a variety of distinctive BI tools. "Businesses should not trust their mega-vendor to solve all their integration problems. Vendors move slowly to integrate the disparate code bases they have acquired," Gartner explained in the report. "Reliance on one vendor also limits the ability to use best-of-breed capabilities."
Forrester, in a recent report, also recommends that companies use a more targeted approach of BI optimization, as well as an evaluation to see if lower-cost technology alternatives provide a strategic fit. This approach can enable organizations to do more with less, leading to a win-win scenario that can contribute to both top and bottom lines.
BI solutions in the coming year will be those that help organizations rapidly tackle specific, immediate business needs without taxing their valuable IT resources. These needs include reducing costs, increasing revenue, eliminating inventory and improving customer satisfaction. To do this, companies need to choose the tools or analytic applications that can be deployed in weeks not months. Forrester point out that the largest component of traditional BI projects has been the implementation not the software cost. However, that said Rabie points out that “the BI landscape is changing. The traditional BI project of months and years is no longer relevant. Solutions such as Yellowfin enable rapid deployment and as a consequence a higher return on investment. “
In the current recession, companies must choose IT initiatives that address specific business "hot spots" and offer a quick payback. Initiatives focusing on increasing revenue, reducing costs or improving customer satisfaction will reign. BI will provide organizations with visibility into opportunities to cross-sell into existing customers, ensure that at-risk revenue is secured, identify new opportunities, rationalize costs and inventory, and meet goals set out by leadership.
As companies are targeting initiatives and solutions sets with a rapid ROI, the luxury of time is no longer a business option.