IT Brief New Zealand - Technology news for CIOs & IT decision-makers
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Sat, 1st May 2010
FYI, this story is more than a year old

What, in your mind, is business intelligence?

Business intelligence falls broadly into two categories: business reporting and predictive or forecasting business intelligence. Both offer an organisation detailed and insightful views into how their business is operating and how it can be improved.

  • Business reporting: The ability for an organisation to use business intelligence solutions to consolidate data and create a view across that data. This is done through reports that make information easier to view and comprehend. An example would be using the reports to determine who a company’s most profitable accounts are while taking into consideration costs of sale, or to define what margins are actually needed to be profitable.
  • Predictive or forecasting business intelligence: This takes the consolidated view of data and, using processes of norms and other more advanced algorithms, gives a business forecast or predictive information on which to plan business activities. An example of this would be market growth predicted on company expansion and types of markets.

What percentage of businesses use a BI tool?

Not enough! As recently as 2006, 72% of businesses still used spreadsheets to monitor their critical business profitability. Simple reporting does not answer the really important questions. In Gartner’s predictions for BI between 2009 and 2012, it was suggested that more than 35% of the top 5000 global companies will regularly fail to make insightful decisions about significant changes in their business and markets. This would be a result of lack of information, processes and tools.

What are the major trends in business intelligence technology at present?

There has been uptake of the BI technologies, in particular uptake of predictive business intelligence for business development purposes. The same Gartner predictions suggested that by 2012, business units will control at least 40% of the total budget for business intelligence rather than IT, demonstrating the significant direct impact BI has on business profitability.

What is the future of business intelligence and how has it evolved?

We’ve seen a progressive move from simple reporting, to a consolidated view of data across an organisation, to predictive/forecasting information, to benchmarking. We expect this will soon move into a more collaborative decision-making process where BI is used in an interactive manner to effectively plan a company’s strategy solutions.

What imperatives are driving business intelligence and how has the recession affected those imperatives?

Businesses tend to function on approximate knowledge of profitability and cost base, with the true picture of the company’s financials being revealed during end-of-year reconciliation. More and more companies are demanding to know minute-by-minute the state of play for their business so that they can manage risk proactively, whilst taking advantage of new opportunities.

What role does benchmarking play in business intelligence and what does that mean for organisations that use it?

We perform our business roles in a competitive market. In recent times the economic squeeze has highlighted the cost of not being competitive. On its most basic level, benchmarking puts performance in perspective. In a management context, businesses use benchmarking to identify those areas where they are either under-performing or exceeding the performance levels of their peers. This means they can effectively focus on areas of growth and those that need remedial attention.

How does business intellegence help companies that have strict compliance or regulatory policies to adhere to?

BI has the ability to give a company real, effective and meaningful information, either historically or through forecasting the future. We often look at this as seeing opportunities to expand or improve our business profitability. However, companies existing in a regulatory world with potential loss through non-compliance have quite substantial opportunities available to them that can be highlighted through simple monitoring of their compliance. Discovering gaps in this compliance early enough so that they can be managed is the realm of BI.

What role, if any, have social networking and the web 2.0 trend played in business analytics?

Many companies involved in the new markets are young, and are large users of BI solutions. Companies like Amazon and Google, for example, have demonstrated the ability to gather information from their very large user bases, with low costs and high information returns.

Another example of the effective blending of BI and social media is the Tourism Holdings Limited website,, which creates a sense of community, with users of the site able to post photos and comments which then act as a draw to young travellers to the excitement of hop-on, hop-off bus travel around New Zealand while integrating to popular social networking sites such as Picasa and YouTube.

What are the stumbling blocks of pushing CRM and ERP solutions out into the mobile environment?

Imagination! To a large degree, what is possible today with BI tools exceeds businesses’ ability to comprehend, and therefore take up, the opportunities that are available. We’re seeing more clients interested in pushing their existing BI solutions out to the mobile as the mobile workforce grows and the popularity and capability of the smartphone increase.