It’s a Win-Win: Best in Class Companies Benefit More, Dedicate Fewer People to BI

July 21, 2009

David Hatch on How Best in Class Companies Handle BI:

Organizations are facing pressure to deliver actionable information to the enterprise that is timely and effective toward meeting business goals. This requires t hatch_dave hat companies have access to the information, the ability to combine, aggregate and integrate the information, and deliver self-service access to BI for non-technical end users when, where and how they need it.

Survey results from Aberdeen’s April 2009 report Managing the TCO of Business Intelligence show that the firms enjoying Best-in-Class performance have overcome two major obstacles in achieving pervasive BI:

Best-in-Class companies are far more likely (96%) to provide self-service access to BI capabilities to non-technical users than Average performers (68%) and Laggard performers (7%)

69% of Best-in-Class companies have delivered access to BI capabilities to line-level knowledge workers (internal and customer-facing) compared to 44% of Average companies and 22% of Laggards

This new study, conducted among 370 business professionals during May of 2009, reveals the six specific methods and approaches that top-performing companies are taking to improve the pervasiveness of
business intelligence access, usage and effectiveness. Aberdeen group investigated several business pressures that are driving companies to seek increased availability and access to BI reporting, analytics, and performance management capabilities. The predominant pressure driving this is the need to make business information more readily accessible to end-users.

Click here to access a free copy of the study.

About David Hatch: David Hatch leads the Technology Research practice areas at Aberdeen Group. The team focuses on the role of technology, and the disciplines, processes and strategies that companies implement to improve financial, customer, and organizational performance. Hatch personally oversees research projects focused on Business Intelligence (BI) and Performance Management (PM), and the investigation of end-user organizations’ abilities to collect, assemble, secure, manage, communicate and deliver actionable information to the enterprise.

Hatch has 22 years of expertise as a user, marketer and analyst of information management technologies and applications within several vertical market environments including healthcare, manufacturing, publishing/media, retail/CPG, and wholesale/distribution. Hatch’s topic coverage has included a broad range of primary research studies, such as BI deployment strategies, operational BI, BI in retail, managing the TCO of BI, financial planning, budgeting and forecasting, and data management for BI. A full collection of David’s work can be found at www.aberdeen.com.

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Quick Takes for the Week of May 11, 2009

May 15, 2009

May 15: Ajira Technologies’ Nari Kannan, writing at ebizQ, makes a bookend point to Bradbury’s piece noted yesterday. Kannan says that despite all the great sounding terms and concepts thrown around by BI folks, in many instances a company ends up relying on Excel based “skunk works.” The reason, he feels, is that the various tools still are evolving and in most cases don’t satisfy all of an organization’s many needs. The natural response, then, is to create homegrown Excel-reliant solutions to solve specific problems.

May 14: British site Silicon has a nice roundup, written by Danny Bradbury, of important steps to healthy BI. The five are to have a clear set of user-driven goals; to train and encourage users to take advantage of the platform; to start with small and achievable goals; to think in terms of a wide-ranging program, not a isolated project and to ensure clean data through a master data management function.

May 13: This is a long but very worthwhile piece in Intelligent Enterprise by the Aberdeen Group’s David Hatch. Hatch, whom The IT-Finance Connection has spoken to before, discusses the rising costs of BI implementations. The story, based on a new report from Hatch and firm, describes how best-in-class companies finish projects on budget, shorten project completion times, reduce the cost per user and cut the time it takes to change or modify a report or analytic view.

May 12: This posting by Matt Richtel at The New York Times doesn’t directly mention BI, but it has significant ramifications for folks in the business. According to telecom researcher Chetan Sharma, during the first quarter of the year the United States became the first nation to reach $10 billion in mobile data services revenue. The post offers a lot of details, including precisely how Sharma defines the category and which wireless carriers are ahead. The bottom line for business intelligence clearly is that cell phones and smartphones will be an increasingly dominant conduit for the data with which they deal. Richtel points out that the arrival of the Palm Pre, the possible arrival of a new iPhone this summer and various other gadgets will accelerate the trend.

May 11: The South African site ITWeb offers a piece from IS Partners–a Microsoft Gold Certified Partner based in New Zealand–that looks at the differences between integrated and point BI approaches. The jumping off point for the discussion is the integration of Microsoft’s PerformancePoint into SharePoint. The writer argues that the platform approach is simpler, more cost-effective and offers greater feature flexibility.

–Carl Weinschenk

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Podcast: Aberdeen Finds that Agility is the Top Budgeting Priority for Best-in-Class Companies

February 23, 2009

Editor’s Note: Aberdeen Group Analysts David Hatch and Cindy Jutras recently released research that looks at the impact of the recession on budgeting priorities. An excerpt of the report follows and the attached podcast offers additional comments. The full report, Financial Planning, Budgeting and forecasting: Managing in Uncertain Economic Times, is available at no cost from Aberdeen’s web site through March 2009.

Today’s economic uncertainty is making it difficult to set clear goals and objectives and sustain a financial plan which supports them. Aberdeen’s survey of over 150 companies finds that organizations must become more agile with their planning, budgeting and forecasting capabilities in order to contend with a volatile environment.

Listen to the Podcast:

The business climate is characterized by change and compounded by global influences spawning distributed environments and squeezed margins. While speed, agility and accuracy dominated the business pressures driving planners in 2008, the need to improve agility to adapt to changing conditions has risen from the number two pressure last year to number one this year. While still an issue in 2009, last year’s top pressure – the need to improve budget accuracy – has plummeted to the bottom of the list for top performers, and fourth overall among all other respondents (Figure 1).

Aberdeen used four key performance criteria to distinguish the Best-in-Class from Industry Average and Laggard organizations. We evaluated the budget process itself, including year over year improvements in the cycle time, which influences the organization’s ability to finalize budgets prior to the beginning of the new fiscal period. We looked at the accuracy of the overall budget and respondents’ ability to grow profits over the last 24 months. The top 20% of performers have been identified as the “Best-in-Class” companies that are approaching their planning, budgeting and forecasting initiatives differently than Average and Laggard performers.

Successful budgeting initiatives are measured in many ways, and respondents have indicated that the cycle time from initial draft to final approved budget and forecast is important. Best-in-Class companies have reduced their cycle times by 24% in the past year-over-year period, compared to only 5% of all others. In fact Laggard companies have seen virtually no decrease at all. Interviews with respondents reveal that one of the top methods for reducing cycle time is to formalize and automate the planning, budgeting and forecasting steps and offer end users a guided step-by-step process. This is an organizational, not technological, approach to addressing process performance, and Best-in-Class companies clearly understand the difference between throwing technology at a problem vs. institutionalizing a solution within the culture of their respective companies.

The Role of Spreadsheets
Best-in-Class companies are less likely to use spreadsheets in almost every aspect of planning, budgeting and forecasting than their Industry Average and Laggard counterparts. Interestingly, 15% of all respondents report that spreadsheets remain their primary method today despite having purchased and implemented another solution or solutions intended to replace them. One of the most popular features of operational applications is the ability to export data directly to a spreadsheet application, so it is not surprising that this is the most popular role that spreadsheets play. But it is the level of control and access to this data that is critical to understand. Best-in-Class companies are far less likely to export data into manually shared spreadsheets at the initiation of a planning / budgeting / forecasting project, and are also less likely to use spreadsheets as the input mechanism for the first and possibly subsequent iterations of the overall process.

Forecasting - Lessons Learned from the Best-in-Class
The increased need for agility puts a higher priority on the ability to forecast… and re-forecast, either on a periodic basis or on demand as business conditions change. However, not all elements of the budget or plan receive the same level of focus and frequency. But the real value of re-forecasting is provided by the ability to perform “what-if” analyses. What will be the impact on the business if there is a decline or surge in revenue? How will it impact marketing staff or headcount, or research and development? Best-in-Class companies are significantly more likely to apply “what-if” scenarios during the re-forecast process, but not all elements are treated equally. Revenue, being the basic driver that fuels the business is most likely to be analyzed on this basis. In addition, the ability to align sales forecasts with the overall business revenue and cost forecasts, compensating for external (industry trends or financial indices) and internal (contract fluctuations, missed schedules, lost or late orders) are all leading indicators of whether companies will succeed or perhaps even survive in these turbulent times.

A full copy of Financial Planning, Budgeting and forecasting: Managing in Uncertain Economic Times is available at no cost from Aberdeen’s web site through March 2009.

Cindy Jutras is Vice President & Group Director and David Hatch is Research Director, Business Intelligence Research for the Aberdeen Group.

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The Smartest Companies Don’t Stovepipe BI Projects

December 15, 2008

David Hatch, a Principal Analyst for the Aberdeen Group, says that best-in-breed retailers break down stovepipes between different areas of the organization by implementing enterprise-wide business intelligence guidelines. Hatch recently released a report — written with Senior Research Analyst Sahir Anand — entitled Increasing Retail Productivity: Enterprise-Wide Business Intelligence. The report says that IT and business departments have to sit down before projects being and have a conversation that, Hatch says, “actually is very difficult.”