Dec 21, 2009

What does Business Intelligence do?

Making best use of business intelligence to stay ahead of competition. / EJ

Business benefits from user-friendly Intelligence, SAP

Zatni Arbi ,  Contributor ,  Jakarta   |  Mon, 11/16/2009 2:34 PM  |  Sci-Tech

The word "intelligence" often gives us butterflies in our stomach, as the British say. Each time we hear the word, we think of the CIA, the KGB, Mossad and even our own Badan Intelijen National (BIN). Those agencies consist of highly trained, high IQ people for whom death is just an ordinary affair. We had better not mess up with any of them.

But, whether we like it or not, the word "intelligence" has for several years invaded the business world as well. That is why we have applications and tools that we call Business Intelligence (BI). What do they do?

First, remember the age-long concept called Enterprise Resource Planning (ERP), which automates transaction processes. When a customer places an order, for example, a chain of reactions takes place. The finance department will check the person's credit line to see whether their order can be accepted or if they have to settle a previous debt first. Sales will check whether the goods wanted are readily available and, if not, production will have to manufacture them. Production will also have to be able to tell everyone how long it will take until the goods are ready for shipment.

After ERP, people started to think, "Now that transactions are taken care of, why don't we capture all the transaction data and create a huge data warehouse?" That is when Data Warehousing came into the picture. Credit card issuers, for example, keep track of every single purchase we make.

Then they use the information for various purposes, including cross-selling. If you have a fetish for buying branded bags, for example, they will make a note of it and send you catalogs of luxury bags from other brands - and perhaps the shoes to match.

However, data and information are not limited to what the Data Warehouse can supply. What about what is going on in the market? What about changing customer behavior? Which bottled tea sells most in East Java, for example? Which model of car sells most in Central Kalimantan? For strategic decision-making, such external data is also as important as internal transactional data.

External data can be purchased. That is what independent research firms like Bloomberg and Nielsen do. They capture data, clean it and verify it, and then sell it to businesses at premium prices. Research firms also customize their data based on the needs of their customers. "To collect external data, people have also been using data crawlers, a robot-like program that crawls through the web and go after the data it has been programmed to find," said Singgih Wandojo, Operations Director, SAP Indonesia, during a recent lunch with a small group of IT reporters.

Certainly, having mountains of data will only defeat the purpose. Businesses require powerful analytical tools to extract the relevant data and to make sense of it. Such tools are known collectively as Business Intelligence, or BI. "Banks, financing institutions and telco operators are the top users of BI solutions," said Singgih.

Three to four of the biggest BI players in Indonesia are IBM with its Cognos, Oracle with its Hyperion, SAP with its BusinessObjects and SAS - the company that, during my student days, used to be known for their very advanced statistical software.

BusinessObjects used to be the name of a company founded by John Schwartz. When it had a market value of US$1.5 billion, $8 billion SAP acquired it, which clearly indicates how SAP needed great BI tools to complete its business software portfolio. Schwartz joined SAP in 2008.

But, when the analysis is done, there is still another horrendous task: How do users get to the extracted data they want without depending too much on their IT division? SAP has SAP BusinessObjects Explorer. Hasso Plattner, the company's co-founder, has a lot of influence on its development. Although he has retired, he still challenges his mind with software and application development. He even suggested that the data be placed in the memory for faster processing.

BusinessObjects Explorer can perhaps be described as an interface that casual users can easily customize to suit their individual requirements. "The emphasis in the Explorer is the ease-of-use," said Singgih. Eddy Then, business development manager, SAP Indonesia, added that the Explorer has been designed to be as familiar as Google. Eddy gave us a demonstration of the Explorer during the lunch briefing.

So, if you want to know how well pretzels were selling in Germany in the second quarter of 2008, for example, you can enter the keyword "food" and keep drilling down by selecting the relevant items until you get to pretzel. As the accompanying screenshot shows, you can also see the data in chart forms.

Do all BI products have the same power? Goenawan Loekito from Oracle Indonesia does not really agree. "Oracle's Hyperion has stronger analytical tools," he told me over the phone. But he admits that combining Hyperion with BusinessObjects Explorer will be like adding caramel to your pretzel.

Nonetheless, no matter how easy it is to use BI with the help to great software like BusinessObjects Explorer, the reality in the business world remains the same. Ignore intelligence, and you will be swallowed by your rival. That is why, in the uncertain business environment we find ourselves today, it is critical to have an easy to use BI solution.

Sumber: Jakarta Post, 16 Nov 09

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