Time to Leverage That Data

To get at that data stuck in big-ticket enterprise systems, many companies are turning to BI software. "We've seen a number of companies that invested a lot in ERP or CRM that have not necessarily seen the big returns they expected," says Rebecca Wettemann, vice president of research at Nucleus Research. "They're looking to BI as a way to, with a small additional investment, squeeze additional value out of those systems."

FiberMark North America spent $US4.5 million on ERP software from JD Edwards and $US3.5 million on Oracle, but the manufacturer of specialty packaging and paper couldn't easily get at the data. "Typically, ERP systems collect data wonderfully, but don't report out worth a darn," says Joel Taylor, director of IS. "We were desperate to get good information quickly." Taylor spent less than $US75,000 on QlikView - BI software from QlikTech that grabs FiberMark's data from JD Edwards, Excel spreadsheets, and Oracle and Access databases, and stores it in the server's RAM (eliminating the need for a data warehouse).

Now, instead of printing 1000-page monthly sales reports for each of FiberMark's 29 salespeople, Taylor's staff has shown them how to access the data from the corporate intranet any time they want. "With a very short training cycle (15 minutes), they're up and flying," says Taylor. "They print four pages, not 1000." He says the system paid for itself in nine months in saved paper, toner, and printer wear and tear alone. More important, though, salespeople and executives can get at data that's refreshed daily.

When Quaker Chemical began operating as a global entity in 1999, newly appointed CIO Irving Tyler suddenly had to create a single global view from 14 transaction systems. Tyler had already built data warehouses for US and European customer and product information, so he decided to scale up into a global data warehouse, giving users access through an Internet-based BI tool from SAS. The whole process took three months.

He put plans for a three-year migration to a common ERP system lower on his priority list. "In reality, an ERP system is not very clever," he says. "If we hadn't put in the capability of business analytics tools for the data warehouse, we couldn't operate globally. Because suddenly, a global manager responsible for sales and product results literally would have had to go to 14 sources for information."

Besides making data accessible, BI software can give companies more leverage during negotiations by making it easier to quantify the value of relationships with key suppliers and customers. Given a corporate directive to cut purchasing costs by $US2 billion in 2002, Motorola needed a consolidated view of its global supplier network. It used Informatica's PowerAnalyser to analyse purchasing data to ensure that buyers around the world were taking advantage of negotiated deals. The tool automatically alerts buyers when they exceed spending thresholds that entitle the company to discounts. "It should jump out at you that the next $US10,000 worth of spend with this vendor should be 5 per cent less," says Chet Phillips, a director of IT at Motorola. "When you've got tens of thousands of vendors, that's an issue. You want that information to be pushed to you." Motorola surpassed its goal of saving $US2 billion last year, and Phillips says its BI tool was directly responsible for as much as $US140 million of those savings. Motorola has now begun collecting procurement data from its manufacturing outsourcers. The idea is to ask suppliers to extend all negotiated deals to those business partners, who are then expected to pass along some of those savings to Motorola.