Get smart with BI

Business intelligence (BI) is in the eye of the media, no longer as the industry's new buzz word but as a technology fast attaining maturity. With market consolidation on the rise, the technology is gaining momentum in Asia.

IDC last year forecast that Asian companies would spend US$642 million on BI projects in 2003 and grow through 2007 at a compound annual growth rate (CAGR) of 12.2 percent to US$1 billion.

The numbers reflect growth in the adoption of BI which is triggered by increasing demand among Asian companies to analyze and prospect for customer and partner information to make business decisions.

"Companies can no longer afford to provide the same service to every customer," said Thomas Ng, general manager, head of information technology division, at Dah Sing Bank (DSB). "Segmentation will become critical for any business to succeed and BI plays a significant role in this process."

Ng said the bank is currently aiming its BI projects at creating customer segments so that they can decide which services and products to offer to which segment. Although the bank has established a data warehouse through SAS Institute and Oracle, he said it is taking time to roll out an enterprise-wide BI project.

"On one hand BI is very important to the bank, but on the other hand it is quite an unfamiliar technology," said Ng. "But that doesn't mean we won't proceed to adopt BI. It only means we need to spend more time to study and ensure that we won't fail when we roll out the project."

He noted the bank is moving cautiously to implement BI because both internal IT staff and the vendors are not entirely conversant with the technology.

The other major challenge for BI, Ng said, was to handle change management of business process. Business involvement being a critical given to BI, senior management and users would need to take the lead to ensure a successful BI story.

The involvement of senior management and users brings business metrics into the system and raises the need for coordination to enable any business process re-engineering that may be warranted.

More than enabling data access, BI is a business process that uses technology to glean business value from information lying across the enterprise. Coordination among users in adopting this new process is essential for maximum return, Ng said.

"BI is like a gun. And, it's useless to hit someone over the head with a gun," said Ng. "Users need to know how to fire a gun to make it a killer application."

Like loading a gun and taking aim, users need to be able to extract the right kind of data and establish a strategy to turn the gained insight into an impressive ROI.

But not every company can afford to be slow with implementing BI.

At Tom Group, for instance, BI has been the linchpin for business since the company adopted a new business model three years ago.

Started up as an Internet content provider, Tom restructured to become a multimedia advertising company. The company grew through mergers and acquisitions of online, print, outdoor advertising, television and sports management industry entities in the Greater China region.

While the acquisitions strengthened the company's bottom line, they messed up the pan-organizational IT infrastructure. Under Tom's IT umbrella there were 40-plus subsidiaries with IT systems at various levels of sophistication. Running on the overblown network were 20 different financial applications, developed by global software companies and local independent software vendors (ISVs).

"It was a real mess that made it almost impossible to generate any reports," said Tan Zhi, senior advisor with extra charge of the corporate IT strategy.

The hapless IT team had to cull data individually from each subsidiary in order to generate enterprise-wide reports. It took three long months to generate a year-end report; quarterly reports took about a month to generate, he said.

As information was stored all over the infrastructure, data loss was common, making it particularly painful for Tom because as a listed company, it needs to provide accurate financial reports to public shareholders every six months.

Tom was desperate to quicken the pace of information capture from across the enterprise. This was enabled through the BI application and consultation firm Business Objects SA (incorporating Crystal Decisions). The company created a central data store with historical and new data which allowed users to create comprehensive financial reports.

Apart from facilitating financial reporting, BI has helped Tom to recognize business opportunities, said Zhi. With the help of data consolidation, sales can identify available media assets within the group-which include available advertising space among different media, their locations, sizes and prices.

"For example if Motorola would like to start an advertising campaign for its new cell phone in the region, we are able to provide a package to place advertisements on outdoor billboards, in print, online and television commercials," he added.

Tom is not the only media company to take advantage of BI in locating business opportunities. Television Broadcasts (TVB) has also deployed SAS's BI application at its marketing research and information department to keep track of the station's rating and advertising expenditure.

Previously, users had to wait for the IT team to write programs even for simple requests from the system, said KC Leung, manager, Marketing Research and Information Department.

Now, the system downloads updated data from the mainframe at the beginning of each day. It then converts that data from a DB2 format into a data warehouse format so that when, at 9a.m., the office opens, marketing and sales managers can slice and dice the figure as they choose, from the word go.

"Now that the reports are online and available first thing in the morning, our users are far more likely to view them now, compared to when they were presented with a stack of paper reports," said Leung. "The system also means there is less pressure on the department, because we don't have to spend so much time producing reports for management."

The IT team at Cathay Pacific Airways has also had its workload reduced after the airline adopted BI applications provided by Hyperion Solutions.

The applications at Cathay Pacific allow the revenue management and airline planning departments to access data for analyzing revenue and route data with minimal IT administration support.

The open architecture supports relational, multidimensional and operational databases, enabling analysis of data from customer, cargo and in-flight services.

"The staff can now access business information and get query results back within a short period of time," said Samuel Lo, IT services specialist of Cathay Pacific. "We were enabling our staff to do their work efficiently, and this will help us to better serve our customers."

There is another area where BI software is helpful: the optimization of business performance.

At CLSA, apart from helping management to identify trends in securities trading, and generate sales reports, BI also tracks the company's performance.

Timeliness is extremely critical in securities trading. CLSA ensures that orders are made at the right price at the right time by tracking total transaction duration and time taken for each stage of transaction.

With Hyperion's (formerly Brio Software) BI applications, the management can now generate trade time reports in different dimensions to keep track of business performance, said Rebecca Tang, IT development manager CLSA.

With data consolidation through BI, CLSA can generate reports not only for management, but for clients, too.

At the conclusion of each transaction, the company is required to send a confirmation message, a legal document to inform clients of the details of the transaction. The process cuts across the front-end trading platform, middle office and back office to provide information on the investment tools selected, trading volume, prices and service charges.

Apart from automating the process, BI also provides alerts on unavailable data, like the Japanese name of the client or information required from a database that has not been connected to the BI system.

"The most powerful aspect of Hyperion is that it helps us to combine data from multiple data sources," said Tang. "The ability to drill up and drill down the overall business view is extremely empowering, allowing CLSA managers to instantly spot trends.

Cleaning up the mess Their success notwithstanding, the BI implementations did not come easy.

At Tom, Zhi's team spent almost a year and a half picking through historical data.

He initiated Project Light Speed in July 2002 aimed to speed up data transfer and loading by setting up standards, a metadata library and platform to connect all the involved applications.

It was a tough project because the level of technology sophistication among applications varied, Zhi said. The dotcom startup acquisitions, for example, used Excel to handle sales, while other traditional media companies used different brands of enterprise resource planning (ERP) applications.

The Tom Knowledge project followed, in which the team worked with business users to design the structure and architecture of the central database. Zhi's team spent another six months to manually load historical data from each individual application into the central database, to create that single view of data.

"The entire process was a long and complicated one," said Zhi. "But it was very important to handle the historical data before starting any BI implementation."

He said BI is a technology that turns data into knowledge. On lines that are similar to creating a book where words are arranged in a certain fashion to create meaning for readers.

"If you don't put data into an organized pattern, that data doesn't mean anything," said Zhi. "Because knowledge is built upon connections and relationships between data."

After the cleaning was completed in November 2003, Tom started to program an automated process to upload relevant data into the central database. Phase two ended last month, allowing business users to generate financial and media asset reports.

The BI project at CLSA started off easier thanks to a mature IT infrastructure pulled together by enterprise application integration (EAI).

The company began with a proof of concept exercise. Four vendors participated in testing for multiple database access and reports generation across a few departments, Tang said.

"The selection was based on ease of deployment, connectivity to multiple databases as well as fault tolerance," said Tang.

The deployment was a gradual one. BI was first applied within a single department, like HR for tracking headcount movement, payroll and management leave reports, as well as treasury department for handling cash flow management and settlement.

Daphne Chung, senior analyst at IDC, noted that companies should start off with BI carefully. "But (they) must bear in mind to extend the application across the enterprise. In other words, long-term and short-term strategies on what BI needs to achieve for the business."

Choosing the right vendor is also important, Zhi added. "At Tom, we look for local support, variation of presentation as well as software architecture to ensure easy customization when needed."

User training is particularly important to Ng at DSB. Only when users employ the right tools to generate knowledge from data can business benefit from BI, he said.

"After all, BI will be a killer application only when users know how to aim and pull the trigger," Ng concluded.