You are on page 1of 6

BUSINESS INTELLIGENCE

Nowadays, economic organizations are subject to external forces that they must live with and react
to: increasing sophistication of competitors, customers and suppliers, globalization of business,
international competition.
Perhaps the most critical component for success of the modern enterprise is its ability to take
advantage of all available information - both internal and external. It’s a real challenge, due to the
tremendous flow of information it’s facing every day. Also, the nature of information itself has changed,
in terms of volume, availability and importance. The data to be considered becomes more and more
complex in both structure and semantics.
With the Internet, Intranets, Groupware systems the volume of available data increases each day –
customer communications, internal research reports or competitors web sites are just some sources of
electronic data. Intellectual property and assets, knowledge are contained within the huge volumes of
information and leveraging this value is increasingly important in the competitive market.
Making sense of all this information, gaining value and competitive advantage through represents
real challenges for the enterprise. The IT solutions designed to address these challenges have been
developed in two different approaches: structured data management and unstructured content
management.
We can even think at these approaches in a more general perspective as being information
management technologies and knowledge management technologies – being aware in the same time that
information management it’s a part of knowledge management, as information can be considered a type
of knowledge (explicit knowledge).
Knowledge management technologies, while less mature than information management
technologies, are more and more capable of combining content management systems and the Web with
vastly improved searching and text mining capabilities to derive more value from the explosion of
textual information.
Integrating Business Intelligence and Knowledge Management in order to respond to the
challenges the modern enterprise has to deal with represents not only a „new trend” in IT, but a
necessity. Over time, techniques from both technologies blended, Competitive Intelligence Systems are
a direct result of such integration.

Business Competitive Intelligence


Competitive intelligence has undergone a raising interest in recent years as a result of the
information explosion and the sharpness of information technologies. Trying to define the scope of
competitive intelligence, a lot of definitions proposed by business intelligence professionals and
strategic analysts were summed up in the Competitive Intelligence Handbook. The general opinion of all
these business information professionals is that Competitive Intelligence deals with the collection,
selection and interpretation of publicly-held information that emphasize competitors position,
performance, capabilities and intentions.
Business Intelligence is a broad field of study. The major thrust of business intelligence theory
looks at certain factors to make high quality decisions. These factors include customers, competitors,
business partners, economic environment and internal operations. Here is some more information on
how these factors help businesses make quality decisions.
Competitive intelligence is the analytical process that transforms scattered information about
competitors and customers into relevant, accurate and usable strategic knowledge on market evolution,
business opportunities and threats. It is focused on environment and uses public sources to locate and
develop information on competition and competitors, information later used as references, benchmarks
or any other basis for strategic analysis. Competitive Intelligence is the natural exploit of the increasing
availability of commercial databases world-wide, the on-line mass-media and the development of
cutting edge information technologies: business intelligence and knowledge management.

By its very nature, no business is isolated. In doing its activity, the business will need to deal with
customers, suppliers, employees, and others. In almost all cases there will also be other organizations
offering similar products to similar customers and seeking similar objectives: growth, profit and fame.
These other organizations are known as competitors. Competitiveness is a natural relationship
between businesses. Business competitors are other organizations offering the same product or service in
the present time but also in the future and also organizations that could remove the need for a product or
service by offering substitutes or changing habits. Monitoring competitors worth a lot because it
provides necessary knowledge to be able to predict their next moves, exploit their weaknesses and
undermine their strengths. According to Arthur Weiss, founder managing partner of AWARE company
which has an international reputation within the Society of Competitive Intelligence Professionals
(SCIP), there are four stages in monitoring competitors - the four "C"s:
1. Collecting the information
2. Converting information into intelligence
3. Communicating the intelligence
4. Countering any adverse competitor actions (making use of gathered intelligence)
This approach is war-like, with terminology taken from the military field (intelligence,
counterintelligence and techniques as well).
All businesses are fighting to gain the same resource and occupy the same territory: the market.
And like in war, it is necessary to understand the enemy: his vision, his strengths, where he is
vulnerable; where he can be attacked; where the risk of attack is too great and so on. The war-like
approach of the business relationship with the competitors led to a new branch of IT applications
designated to support competitive intelligence - CI information systems.

Customers: Without customers a business can't survive. Businesses need to sell their products and
services. Business intelligence helps businesses understand their customers better, looking at their
preferences, helping businesses adapt to their customers demand. Business intelligence is used to collect
data from customers usually within the marketplace. There are many ways to collect data from your
customers; it can be as easy as a POS system (point of sale), collecting data on what customers are
buying and which products they are not interested in, collecting data on customer habits and preferences
by asking them in surveys or polls. There are even marketplace specialists that watch customers
behavior in the marketplace and report back to the companies giving them insight into how their
customer respond to stores, personnel and product and services that a business sells.
Once this data is collected, it is up to an organization to use this data appropriately. Business
intelligence is a process in which vast amounts of data can be viewed and vetted giving managers and
business owner's important information that can be resourceful.
Competitors: Not only do businesses have to keep customers satisfied buying their products, they
also have to compete with competitors that are constantly looking to poach a business’s customers and
make them their own. Businesses today must constantly evaluate the effectiveness of their competitors
and choose smart strategies that not only hold their competitors at bay, but also grow their own
businesses market share. Business intelligence can help a business determine the strategies that your
competitors are using to steal customers away, as well as help your own business to differentiate itself
from others, effectively growing a larger and more profitable customer base.
Business Partners: Business partners are essential to any business, whether it is suppliers,
payment processing companies, customer support companies or delivery companies that help your
business throughout its cycle, it is important to make sure that all businesses partners associated with
your business are in balance with you. Having a supplier that isn't able to keep up with your demand or
having a customer service contractor that is unable to help you with certain support problems can cause
your business to fail. If you want your business to work smoothly and effectively, all business partners
must be in line with each other. For instance, today many businesses share key data with their suppliers
so that their suppliers can anticipate present and future inventory levels and make adjustments, which
inevitably help your business. Sharing information is key and being able to gather information and
sharing appropriate information is where business intelligence is important.
Economic Environment: Another way that business intelligence can help an organization is by
taking into consideration key economic indicators such as consumer spending, inflation, unemployment,
upturns and downturns in the economy, etc. Without business intelligence, your organization can't
process information effectively in order to modify strategies that fit the current economy.
Internal Operations: Internal operations are usually defined as the ongoing day to day activities
of a business or organization. If you want your business to be successful, you need to be able to view
your business's strengths and weaknesses on a daily basis. You also need to see at any moment, just how
much profit your business is making and your liabilities. Without decent foresight, you might make
hasty decisions such as commit to new spending or paying off debt when your business could allocate
those funds somewhere else. Business intelligence is extremely important to gauge your current state of
business, as well as all parts that constitute the whole of the business together to see where funds are
needed, what part of a business is weak and what parts of your business is strong.
Once businesses know what to look at to give them information that they need to analyze, it is
important to gather this data and then use business intelligence methodologies to sift through the data to
provide solutions to common everyday business problems. One of the ways to accomplish these tasks is
with Key Performance Indicators. KPI, are a way that business intelligence can analyze and evaluate the
current state of a business and then use this information to choose a strategy and then execute this
strategy.
Some businesses track Key Performance Indicators each year or quarter, some each month or week
and if you have the means, many corporations try to track specific data daily in order to fine tune or
tweak their strategies.

SAP Brings Business Intelligence and Business Analytics Advancements to Industry


At the 2009 SAP Influencer Summit, the executives at SAP outlined their overall future (See:
“SAP Broadcasts New Enterprise Software and Applications Strategy“), but also the advancement of not
just business intelligence (BI) but also business analytics. As everyone should know by now the
importance of these technologies are for not just finding out how and where your organization is
performing but what might happen in the future too! It should be no surprise that one of the largest
enterprise software vendors like SAP has invested and grown significantly through the acquisition of
Business Objects with also organic development of new business intelligence technology and analytic
solutions for business and IT. In fact just recently at SAP Sapphire conference, the demonstration of
SAP BusinessObjects Explorer (See: “SAP Announces New BI Explorer: Even a CEO Can Use It“) was
on the main stage. Now BI has not come at a low cost for SAP who has had to make many tough
decisions on their product roadmap for integration of platforms to simplify deployment and management
of the technologies as well having to compete aggressively in the market.
SAP is moving along in advancing their current release of SAP BusinessObjects XI 3.1 portfolio to
their next major release which is most likely going to be XI 4.0 and what you might hear as code named
aurora and pioneer that is expected in second half of 2010. This release will bring a common platform
that will support a range of BI capabilities well beyond today’s SAP BusinessObjects Explorer that was
until recently only accessing data from SAP BW through SAP Business Intelligence Accelerator
technology. The new release in 2010 will bring a new and improved semantic layer to their platform that
will blend the best of Business Objects and SAP BW technologies but more importantly provide
enhanced flexibility for dynamically accessing data from across the enterprise. In addition the
advancements of usability are significant with the new version along with expanded support within
Microsoft Office and web editions. The interactive analytic set of capabilities operates in high scale by
using in-memory technology of their accelerator and 64 bit computing technology that will also operate
against traditional OLAP cubes. SAP will also be upgrading the embedded BI within the SAP Business
Suite of applications to address those direct needs of operational BI for which they compete against
Oracle the other large enterprise applications vendor.
More capabilities will be in this release as SAP finalizes capabilities and readiness through their
beta software program. I personally would like to see better use of events from complex event
processing (CEP) into the BI offering for which I call Operational Intelligence and our benchmark
research shows is a growing priority and where the use of geography could enable what I call Location
Intelligence can help pinpoint issues and opportunities quite easily. What is still not obvious is how this
release will foster collaboration across business and IT from a data perspective who should be working
together more closely for assembling and advancing BI for the enterprise. This new release is a
significant step forward as it is the culmination of significant technology rationalization into a common
platform for which will be a new generation of business analytics and performance management
solutions. SAP has spent significant time to ensure that both the usability and administration are simpler
than ever before.
Coming out next in the SAP BI portfolio is the upcoming new release of their cloud computing
offering that is code-named Kona which will bring SAP directly into the BI software as a service (SaaS)
market. This on-demand offering will bring a suite of capabilities from uploading and integrating data
including spreadsheets to the ability to build queries, reports and metrics that can be used in dashboards
along with accessing this information via mobile devices. SAP has done a very nice job of integrating
additional web services and capabilities that will simplify the integration of other types of content and
functionality which has been demonstrated over the last year. This release is significant as current efforts
in the on-demand SAP BI using Crystal Reports have not addressed the full breadth of BI capabilities
necessary to meet customer need and also compete against other BI SaaS vendors currently in the
industry like BIRST, BlinkLogic and GoodData who will have a new and very big competitor. My quick
review of this new on-demand offering from SAP looks like it has been well designed and should be a
great method for many organizations of any size to get BI quickly and easily.
SAP also has stepped up their focus on providing business analytics which is nothing new for SAP
who has for well over ten years been improving upon a range of line of business and vertical industry
solutions. Analytics is not just a data computational exercise though many in the industry would think so
but it is providing business and analysts the ability to optimize a range of business process and topical
focused area through specific capabilities. This area of focus is one of the largest investments by IBM
who through recent acquisition of SPSS is planning to ensure they can become more business solution
centric. SAP for example has a solution for Spend Analytics that has been gaining adoption like that
discussed by Johnson and Johnson (J&J) at the Influencer Summit that globally manages direct spend
used in their consumer products division. The automation of analytics in this area has helped J&J
maintains a best in class for industry spend but also reduce the time and resources to maintain this
critical set of measurements but also reduce errors from use of spreadsheets. In fact in most organization
the plague of personal spreadsheets has hampered the efficiency and effectiveness of analytics which I
have long espoused and found in our spreadsheet research. This focus on spend as mentioned by my
colleague (See: “The Spend Analytics Imperative You Need To Perform”) is an area of great
opportunity for improvement across all organizations.
SAP is not chancing anything in their mission to grow and expand the market for business
intelligence and business analytics. SAP continues to demonstrate and introduce a range of innovations
for BI at their SAP Innovation Center for which they just released access to their BI from Apple iPhone
on the iTunes Store that I had a chance to take for a test drive and provides the simplicity that business
executives and management should have with their BI investments though most do not. It is also clear
that SAP is continuing to harvest their base of customers using SAP applications which is a highly
competitive area for BI (See: “Leverage Every Transaction from SAP for BI”)that many other large and
small BI vendors have focused their sales and product efforts like that from QlikView. SAP does not
take this lightly since this was part of the rationale for spending over $6 billion in acquiring Business
Objects. I am hoping to see more from SAP in the need for more information management
advancements from their current portfolio though they believe is better than anything else in the industry
which I am not yet fully confident of that statement.

SAP has a multi-prong strategy with these two new major releases in 2010 to meet the needs of business
and IT while ensuring the usability and simplicity of their offerings can reach the broadest set of
individuals across an organization and their customers and partners. It is great to see the level of passion
and commitment from SAP at all levels of management at the Influencer Summit. This strategy and set
of products will help SAP ensure that it can advance the cause of BI and business analytics by helping
organizations to more broadly deploy these capabilities as a basic business necessity.

Competitive Intelligence application for Romanian environment


The proposed Competitive Intelligence application is based on a central datawarehouse build
mainly on Financial statements of enterprises published by the Finances ministry. The financial data are
collected for companies along 5 years and completed with CAEN code of the main activity and Product
code associated with CAEN classification taken from the PRODROM master file. There are also added
data on company location and other data provided by a specialized company Listafirme that exploit data
from Trade Register and some data from financial statements

Even if classification information on many companies regarding activity object and delivered
products are not always accurate, many cross analysis could give some insights on Romanian economy.
Future developments aims to insert statistical references provided by National Institute of Statistics and
could be expanded to accommodate data from other countries economies. The utmost use of such
competitive intelligence application could be done if implemented inside a governmental organization
like Finances Ministry. The exploiting possibilities vary from market segmentation and benchmarking to
estimated value chains and trophic chains. The application is an attempt to apply business intelligence
technologies to economic environment analysis making use of Romanian public data sources.

1. Mike Biere - Business intelligence for the enterprise


2. David Loshin - Business intelligence: the savvy manager's guide, getting onboard with Emerging IT
3. Cindi Howson - Successful Business Intelligence: Secrets to Making BI a Killer App
4. Nils Rasmussen,Paul S. Goldy,Per O. Solli - Financial business intelligence: trends, technology,
software selection, and Implementation
5. Brian Larson - Delivering Business Intelligence with Microsoft SQL Server 2008
6. Gloria J. Miller,Dagmar Bräutigam,Stefanie Virginia Gerlach - Business intelligence competency
centers: a team approach to maximizing Competitive advantage
7. Larissa Terpeluk Moss,Shaku Atre - “Business intelligence roadmap: the complete project lifecycle
for decision – Support Applications”
8. Albescu, Felicia, Pugna, I. Paraschiv, D. –Business Information Engineering - an approach in
integrating Business & Information Technologies – International Conference on Accounting and
Management Information Systems (AMIS)–vol.2 June 2007, Bucharest
9. Kahaner, Larry -Competitive Intelligence : How to Gather, Analyse, and Use Information to Move
Your Business to the Top – Touchstone, 1997
10. Porter, Michael- Competitive Strategy: Techniques for Analyzing Industries and Competitors,
FreePress, 1989
11. Richard Comb, & assoc. Competitive Intelligence Handbook - Grolier Scarecrow Press,1992
12. Weiss, Arthur A brief guide to competitive intelligence – Business information Review , (ISSN -
0266-3821) vol 19, nb 2 June 2002
13. Bolloju,,N & Khalifa, M. & Turban, E. (2002) “Integrating Knowledge Management into Enterprise
Environments for the Next Generation of Decision Support”, Decision Support Systems
14. IBM Global Business Intelligence Solutions (2006) “Knowledge management – overview”,
available on line at www.ibm.com/bi
15. Knut, H.R. (2005) “ Knowledge integration as “performed achievement” and its application for
knowledge management systems”, Draft paper presented at the AKSIO workshop in Trondheim,
feb.2005
16. www.scip.org
17. www.marketing-intelligence.co.uk
18. http://www.tech-faq.com/business-intelligence.shtml
19. http://www.sap.com/solutions/sapbusinessobjects/index.epx