Smart and cheap: Business intelligence on a budget

You don't need new tools to gain insight into your business -- here are eight ways to make the most of what you've got.

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Those efforts paid off before a single new report was created. The business saved on software support and licensing costs, and the simplified tools portfolio made user training on the tools easier.

Standardizing on a single set of tools also facilitated model reuse between different groups. Before, for example, the sales and finance groups had profitability models created in different tools. "If they got different results, you'd spend time trying to rationalize why that was," Abbattista says. Now the process is much more straightforward -- and different business groups can feel confident they're comparing apples to apples.

Let business take the driver's seat

As the downturn continues to reset goals and business strategies, it's more important than ever for companies to make sure that BI technology is being applied to solve the right problems. IT organizations still fall into the trap of putting their technology out front, rather than creating models that respond to changing business needs, says Accenture's Millman.

Work with the business first before developing new information models, he advises. "Start with a clear vision of how information will generate value for the organization," he says. "Think about what business interventions you hope to derive from BI tools. Understand where the business benefit is going to come from, then configure the tools and processes."

At Allstate, two areas of focus are managing loss expense ratios and measuring the effectiveness of the call center. "We've taken experts in the tools and methods and put them together with the business people to find these high-value targets," says Abbattista.

The temptation in larger organizations is to try to do too many things with BI, he observes. Having fewer tools helps with that problem, and management also needs to prioritize what is most important.

"These times have been good because they've brought focus on measuring fewer things well," says Abbattista. At the highest level of the business, Allstate's management is watching 10 or 12 different metrics, he says. While business intelligence tools used by the business units use a wider range of metrics, all of those are designed to support those upstream metrics that management is watching.

New markets call for new data models

Right now, says Gartner's Hostmann, "there's a big strategy change in many organizations from high-value product offerings to low-cost offerings." But businesses that can't compete in the low-cost market must figure out a way to move up the value chain -- and they're using BI tools to get there.

Which is what Creativity Inc. did. To combat the commoditization trend in its core markets, it used the IBM Cognos 8 BI suite to identify and develop high-value products that couldn't be easily commoditized by its low-cost competitors.

It started by purchasing transactional data from retailers in the toy, fashion and apparel segments, adding that data to its existing data warehouse, and analyzing current buying trends. Creativity also uses Smart Software's SmartForecast forecasting software against the data as well.

All that analysis has lead to more "design-oriented, fashion-oriented" products, such as a line of paper dolls based on the popular Project Runway television show.

The strategy appears to be working. Creativity's fashion-based and other unique designs have become the dominant portion of its business -- more than 50% -- and contribute an even greater proportion of its margins, Mulholland reports.

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