Data don’t help. Left to accumulate, they just become clusters of 0s and 1s that continue to take up storage and provide no business value. They are globs of glowing potential.
“Big data” has become the phrase du jour. Look at your boardroom buzzword bingo card. “Big data” might as well be a free space in the center. The good news is that more companies are looking at data, but the bad news is that few companies are doing anything with them. To transform data into something valuable, companies must use analysis to develop information that can be extracted as business intelligence (BI), which yields a measurement of how the organization is faring. This in turn lends itself to creating KPIs to quantify progress in efficiencies and productivity.
In July, IFS North America released “Built-In Business Intelligence,” a study it conducted jointly with Advantage Business Media to determine the extent of BI strategies and how they’re used in ERP systems. Survey respondents included 174 manufacturing executives at medium to large companies.
Most participants said they have a BI strategy in place or in progress (64%), while 36% said they had none. The top reasons cited were because it was too expensive and too complicated. Those companies that have implemented a BI program (57%) said that it’s significantly improved their business operations. Companies with revenues of at least $2.5 billion were most likely to have a built-in BI program already in place. From an historical perspective, BI can be used to identify and make operational changes that increase profitability.
Of the companies that indicated they had a BI strategy in place or in progress, almost two-thirds of them said they’re using BI to measure and improve operations. The next highest-rated department was sales, which trailed operations by more than 15%. ERP systems are designed to automate these transactions, so companies can benefit from in-context analytics that are built-in to an ERP solution.
Almost half of respondents (42%) are using a data warehouse to pull data from their ERP solutions for BI purposes with analytic tools not integrated with their ERP solution. This suggests that the full value of real-time BI insight may not be fully achieved. More than one-third (34%) are using their ERP solutions to pull data into an external BI tool for analysis. This may provide the most up-to-date information to the BI tool, but not necessarily in-context with the ERP solution. Only one-fourth (24%) have their BI functionality built-in to their ERP solutions, providing in-context BI with operational processes. Most companies (74%) are using Excel and operational reports for data, which can create data-security and synchronization problems.
|Mike Bacidore is chief editor of Plant Services and has been an integral part of the Putman Media editorial team since 2007, when he was managing editor of Control Design magazine. Previously, he was editorial director at Hughes Communications and a portfolio manager of the human resources and labor law areas at Wolters Kluwer. Bacidore holds a BA from the University of Illinois and an MBA from Lake Forest Graduate School of Management. He is an award-winning columnist, earning a Gold Regional Award and a Silver National Award from the American Society of Business Publication Editors. He may be reached at 630-467-1300 ext. 444 or firstname.lastname@example.org or check out his Google+ profile.|
Most companies are using either a data warehouse or an ERP solution to pull data into an external BI tool for analysis, according to the survey. They’re creating BI analytics from spreadsheets and reports, using one application to process transactions and another disconnected application for additional information. Obviously, this disconnected information begets a clunky process when trying to apply intelligence where it’s needed, and this often dissuades users from turning big data into big profits. At best, they’re only able to see the large wake of missed opportunities left behind.
The survey revealed that most companies use BI to determine what has already occurred and hopefully understand why. This helps to make future process improvements, but it falls short of the agile approach that BI can effect. A more proactive application of BI, with the ability to make decisions in real time, can demonstrate immediate improvements.
Having timely intelligence in the context of immediate production needs helps to make better bottom-line decisions. Combining historical warehouse data with real-time operational data allows organizations to gather analytics in-context with business decisions when they need to be made.
The survey also found that most manufacturers (76%) are either not set up for, or are not using, in-context analytics. Only a minority (24%) of respondents have BI functionality built-in to their ERP systems.