Enterprises look to BI tools as performance management demands rise.
Business intelligence at its most basic means giving managers a historical picture of the state of their operations.
But organizations are increasingly demanding that their BI systems give executiveschief financial officers, especiallya higher-level view of how a company is performing, from individual business segments to departments to product lines and even employees.
Several vendors, including Hyperion Solutions Corp., Cognos Inc., Brio Software Inc., Adaytum Inc. and Comshare Inc., have announced new products or strategies in recent weeks to meet this demand.
This growing segment of the BI space is called different things by different vendors: corporate performance management, business performance management, strategic performance management or business metrics. But they all have a common goal: to give users a complete, up-to-date view of business performance.
Mike Burkes, data access manager for enterprise data management at Toyota Motor Sales U.S.A., in Torrance, Calif., saw the demand for this kind of product firsthand after he recently showed a group of corporate vice presidents at his company a prototype of Brios Metrics Builder 7, released last month. "We got tremendous support from them," said Burkes. "They said, This is exactly what we need."
Burkes rattled off the business activities the prototype system gave the executives: customer call center volume and why it was up or down, how business responded to an ad campaign or news item, what the cost per unit of a model was, and what factors were causing price increases from suppliers.
"You can see the numbers in a second," Burkes said. "Before, youd have to roll up numbers from several different departments. We showed it to our executives, and they wanted it immediately."
Like many organizations, Toyota uses multiple BI tools in its departments. In addition to Brio, Toyota runs software from Cognos and MicroStrategy Inc. scattered throughout the enterprise. "They do their job in their world, their silo, but we dont have a way to pull the information together to give to our executives," Burkes said. "We have no way to get everybody on the same page, give them the same picture."
And tools such as Brio Metrics Builder wont do it all themselves. Organizations still have to build databases for all the data required to make the system work.
Brio isnt home free at Toyota. Despite the success of the prototype, the company plans to do a "bake-off" to see what other vendors products can do, Burkes said. Hell have no shortage of software to evaluate.
SAS Institute Inc., Hyperion, Adaytum and Comshare showed new versions of their business performance management software at their respective user conferences this spring. Cognos, of Ottawa, recently announced an alignment of its BI products around the business performance management paradigm.
SAS, of Cary, N.C., in addition, formed a Performance Management division last month and added activity-based costing to its software with the acquisition of ABC Technologies Inc. in March.
Quaker Chemical Corp. deployed SAS Strategic Performance Management application early this year, giving its executives a look at a number of performance indicators, from return on investors equity to results of employee and customer satisfaction surveys to customer churn.
The company hopes to eventually use the technology to extend the view of its business performance down to each employees performance, said Tom Baker, manager of BI development at the Conshohocken, Pa., company. "It gives you a look at how everything fits together and how that fits your strategy," Baker said.
In addition to giving Quaker Chemical a better idea of how business performance is going and how it meets the companys strategic objectives, the system cuts down on information overload, Baker said. "You can find whats useful and get at what you need to know across the board," Baker said. "You can see the key performance indicators, where you need to focus and where you need to ask questions."
While business performance management software is typically used in combination with other BI tools, customers sometimes find that it can replace those tools, too.
Baker & Taylor Inc., of Charlotte, N.C., licensed Comshares MPC (management, planning and control) product to manage its budgeting process. The software tracks the companys financial systems to see how well financial performance is meeting the budget. But Vice President of Finance Brad Lucas found other uses for the software. "We needed a budget system, but its grown into something more than that," said Lucas. "Its become a management reporting tool for us as well."
The need to adapt to rapidly changing business conditions is one of the drivers of the growing market. "We need to be able to get the data out faster to make the decisions we need to make to manage our business," said Aaron Walcott, an analyst at Deluxe Corp., in Shoreview, Minn. Deluxe is using Adaytums e.Planning software for budgeting and planning. "Thats the never-ending challenge of short cycle times."