Businesses turning to intelligence technology

Market grows as companies aim to improve efficiency

The technology of business intelligence (BI) is coming of age, with Canadian companies expected to spend about $200 million on it next year.

That’s a 4.2-per-cent increase in the amount spent on the purchase and use of BI software in the previous year, according to research firm IDC Canada.

“Business-intelligence tools remain an attractive market for software vendors and one of the top investment priorities for end-user organizations.

“The market grew 11.5 per cent (in 2006) to reach $6.25 billion in worldwide software revenue,” says Dan Vesset, vice-president of IDC’s business analytics.

In a recent report, IDC Canada suggested that more companies are dealing with complex IT structures and require ways to integrate paper-based processes in order to boost efficiency.

This is because more businesses face multiple internal and external data sources (from customer information, to shipping addresses, to service providers, etc.) and this puts pressure on business owners and CEOs to reduce IT costs.

This is where BI steps in. From a competitive perspective, BI is positioned to help firms move away from traditional isolated data-collection centres toward delivering cross-functional reports in real-time.

For example: The creation of the Alberta Supernet, which is a government initiative designed to provide high-speed broadband access to public facilities (and through service providers to businesses and residences).

Construction for the project started in 2002 and, to date, more than 425 communities across Alberta are now connected, at a total cost of $295 million.

The Canadian Association of Petroleum Producers (CAPP) CIO forum informed the Alberta government that, if built properly, the network would not only benefit health, education and government, but could also be a cost-effective service to the oil-and-gas industry – especially given that most production comes from remote areas of Alberta (and Western Canada).

While the network has not yet been adopted by all companies or organizations, it is gaining popularity.

“I still believe that there is lots of work to be done to streamline business process within oil and gas” in particular, but in all industries in general, says Clay Radu, director of Executive IT Solutions based in Calgary and chair of the CAPP CIO forum.

“(But, for example) by automating data capture over cellular, satellite, and cost-effective networks now in place, field operators can spend less time entering data and more time focusing on the optimization of field production.

This also reduces data-entry errors and creates more accurate information, which, in turn, helps key decision-makers to make better-informed decisions.”

In its simplest form, BI is technology that helps companies gather and analyse data to enhance the business decision-making process.

“The biggest hurdle in the resource industry, or any industry for that matter, is finding resources to fill the increasing demand for staffing,” explains Radu.

“IT can play a vital role in the automation of processes to reduce the need for these resources.”

This vital role means BI can turn collected data and daily decisions from silo-based approaches to decisions based on a clearer picture of a business’s process and client needs.

“Technology is really a form of automation,” says Radu. “Technology allows companies to do more with less, bring product to market more efficiently, and be able to react to market changes and supply and demand more effectively.”

All of this is essential if a company wants to stay competitive, says Gary Harpst, founder and CEO of Six Disciplines, and author of Six Disciplines: Execution Revolution: Solving The One Problem That Makes Solving All Other Problems Easier, scheduled for release in July.

Steve Clarkin, a financial services sales executive with Microsoft Canada, says companies that particularly benefit from BI technology are those with stand-alone systems – systems that were not designed to share information with other systems – such as insurance companies, financial advisers, health-care professionals and construction companies.

This is because BI surmounts one of the major hurdles to many of these proprietary data-based companies – how to overcome integration challenges without abandoning the massive IT investments they have made over the years.

One way this is happening is the use of BI in tandem with web services.

When used jointly, they enable mission-critical information to become integrated into other systems and applications, without losing critical confidentiality, and this allows businesses to take advantage of overall company metrics.

Harpst suggests each business owner adopt three simple concepts when examining how technology, and BI, can help build their business:

* Invest in long-term technologies.

“The best approach is to view technology strategically, not just to choose technologies because ‘everyone else uses it’,” says Harpst.

“This involves taking a look at the overall objectives of the business and aligning the use of technologies to support the strategies and goals of the organization.

“For example, for some smaller organizations, the use of communications and messaging technologies such as Internet-driven instant messenger technologies or Skype might be appropriate, while others should look to rely on more robust voice-over-internet protocol (VoIP) solutions or wireless mobile phones.

“We must be diligent in our efforts to use appropriate technologies that support our strategies and goals and not succumb to technological fads.”

* Select technologies that help you measure the effectiveness of key processes.

Know the value of internal processes to increase staff productivity.

Examples of things you should measure include: Time it takes to close a lead, employee turnover trends, average duration of projects.

* Leverage the internet.

The internet is more than a revenue stream; it makes you better at executing your organization’s long-term strategy.

Harpst believes that, through the internet, competitive business owners can conduct online comparisons and reviews with other entrepreneurs – businesses in a similar industry or with a similar size that speak about their experience with different technologies.

“Entrepreneurs should always view technology as a means to an end, the end being the execution of their strategy. If there is no return on investment based on what it can do to execute the strategy, move on,” he says.

The ultimate goal of BI is to consolidate data, transform it into useful information and get it to the right person, at the right time, in the right format.

While companies may need to discover what they require, through discussions with key users, many business owners and executives are predicting that BI will deliver the comprehensive dashboard view into a business’s productivity, operational performance and efficiency.

“From an oil and gas standpoint, technology allows producers to analyze and find oil and gas in place and to optimize this production while reducing operating costs,” says Radu. “It gives key decision-makers access to their required information and creates better awareness of day-to-day developments and changes.”

Harpst agrees.

He is confident that technology is the “single biggest asset that levels the playing field between small and larger businesses.”

While BI was originally introduced as a data-collection method, it has evolved into an aggregated view based on collaboration and access to real-time transactional data. In this way, firms not only make better business decisions but can become more adept at attracting, retaining and expanding customer relationships.

“Technology has successfully brought together workers in different geographies and different industries, creating more opportunities and increased efficiency,” says Harpst. “When used strategically, the right set of technologies can enable an organization’s workforce to execute their strategy on a consistent basis, giving them competitive advantage.”

Originally published in Business Edge on June 13, 2008