SAP Thought Leadership Business intelligence

Why Business intelligence Makes sense for Midsize coMpanies

Following the Road Map to SucceSS

Business intelligence also referred to as decision support allows you to better understand, analyze, and even predict whats occurring within your company. Business intelligence helps you turn data from financial, manufacturing, and sales systems into useful and meaningful information and then distribute this information to those that need it, when they need it.

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Executive Summary Why Business Intelligence Maintaining growth achieving Speed Staying Focused Relying on Facts, not instinct taking the next Step intelligently Deployment and Investment in Business Intelligence Starting Small and Building on Success Use-Case Scenarios for the Three Phases phase 1 (crawl) Scenario phase 2 (walk) Scenario using ad hoc Query and analysis accessing data across Multiple Sources phase 3 (Run) Scenario Critical Requirements for a BI Solution Supporting the pervasive use of Business intelligence a comprehensive Footprint ease of use ability to access information through Microsoft excel low cost of ownership while Supporting growth how Sap addresses these Requirements Summary For More information

executive suMMary

uSing BuSineSS intelligence FoR gRowth and pRoFitaBility

Most large enterprises significantly improve their revenue and profitability by deploying business intelligence (Bi) technology. But if you are a small or midsize enterprise (SMe), does an investment in business intelligence make sense for you? in this paper, we discuss how business intelligence can enable your SMe organization to grow and profit by leveraging its core strengths. Business intelligence should be a key component in your it portfolio. however, once you decide to invest in business intelligence, you are confronted with the next decision how should you deploy the various components of Bi technology to achieve success? we share a road map that can help you start small, gain key learning and success, and then build upon this foundation to make fact-based and Bi-driven decision making pervasive within your company.

SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

Why Business intelligence

addReSSing youR Key challengeS

as an executive at a small or midsize enterprise (SMe), you face a unique set of challenges in running the operations of your company. your response to these challenges is the difference between a remarkable success and a fight for survival. Some of the unique challenges you face involve growth, speed, and focus.

Achieving Speed
as an SMe, the ability to move faster than larger companies to take advantage of a new market opportunity is one of your biggest advantages. however, your organization has limited

benefit of such information, you may either take longer to make such decisions and continue funding poor performers or make incorrect decisions because your intuition about the performance of such products may be influenced wrongly by a single data point.

Maintaining Growth
profitable and sustained growth is critical for an SMe. otherwise you risk either being made irrelevant by competitors or being swallowed by a larger company. however, profitable growth is a balancing act of multiple levers that you have at your disposal. pulling the right levers on a consistent basis requires clear insights into your business, so that you can prioritize the most important issues and then make diligent and informed decisions to address them proactively. For example, clear and accurate understanding of which products, industry segments, and customer profiles are yielding higher profits and revenue and showing higher demand can help you allocate more resources for them to drive higher and faster organizational growth. then on an ongoing basis you should be able to monitor and validate that your incremental investments are indeed delivering the expected increase in sales and profits and that you are not sacrificing a better growth opportunity.

Business intelligence enables a sharper focus by providing every manager within your organization with the same version of truth, so there is alignment between strategy and operations, and any disconnects can be eliminated.
resources, and it cannot afford to move quickly in the wrong direction. taking advantage of speed requires that you have clear visibility into what is working well, so it can be capitalized upon quickly, and into what is not working well, so it can be addressed rapidly. For example, if you have visibility into planned-versus-actual revenue, costs, and spend for new products introduced in the last 12 months, you can easily identify poor performers and quickly shift the spending away from them until their issues are addressed. without the

Staying Focused
unlike large companies, your organization sells a narrow range of products and services and has a limited number of resources. as a result, you dont have much room for errors. this requires that your organization stays very close to your customers, products, and the market. continued success lies in getting everyone in the company on the same page, using the same set of assumptions, and seeing the same version of the truth. For example, if employees in engineering, sales, finance, and marketing use the same analysis on marketing pipeline trends, quarterly sales performance, and profitability by various segments, they are more likely to share the same conclusions and be aligned on priorities to maximize growth and fix problem areas.

SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

Relying on Facts, Not Instinct

Business intelligence (Bi) also referred to as decision support allows you to better understand, analyze, and even predict whats occurring within your company. Business intelligence helps you turn data from financial, manufacturing, and sales systems into useful and meaningful information and then distribute this information to those that need it, when they need it. this enables every manager within your company to make timely and better-informed decisions. Business intelligence gives you the speed advantage by explicitly and succinctly surfacing what is working

and what is not working on an ongoing basis. By seeing the impact on your business, you can prioritize correctly and act or react rapidly. Business intelligence enables a sharper focus by providing every manager within your organization with the same version of truth, so there is alignment between strategy and operations, and any disconnects can be eliminated. in addition, business intelligence acts as an enabler for profitable growth by providing your managers and you with an in-depth analysis of your business, so everyone has a finger on the pulse of your operations and can make decisions based on facts rather than instincts.

Taking the Next Step Intelligently

once you decide to deploy business intelligence within your organization, you are confronted immediately with the next set of decisions in what order should you deploy the various components of Bi technology? as someone new to Bi technology, you can benefit from a road map that guides you through the process of deploying Bi components. Such a road map enables you to start small (crawl), experience key learning and success, and then build upon this foundation with more diverse but high-impact uses of Bi components (walk), so that fact-based decision making becomes pervasive within your company (run). in the next section we discuss the various Bi components and the road map for a phased implementation.

you can benefit from a road map that guides you through the process of deploying Bi components. Such a road map enables you to start small (crawl), experience key learning and success, and then build upon this foundation with more diverse but high-impact uses of Bi components (walk), so that fact-based decision making becomes pervasive within your company (run).

SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

deployMent and investMent in Business intelligence

taKing the RightS StepS in the Right oRdeR

the scope of Bi technology is quite broad. Some of the functionality offered by Bi technology includes: Reporting that surfaces operational data for specific roles and can be run either on a schedule or on demand dashboards that complement reporting by showing information in a powerfully visual manner advanced query and analysis tools that allow users to slice and dice data and view it across multiple classifications or dimensions, such as product, customer, location, time period, and salesperson Search-based ad hoc queries that enable users to get specific data from various systems based on keyword searches and then use the data returned as a starting point to drill into the details data integration and data quality that allow Bi software to pull data from multiple sources and ensure that the data is complete and that there are no redundancies the degree to which Bi technology is used within a company can vary from one end of the spectrum, where it is

deployed solely for creating executive dashboards on desktops, to the other end of the spectrum, where it is pervasive via desktops, laptops, and mobile devices and facilitates decision making at all levels of the company.

Starting Small and Building on Success

if you are faced with limited it resources, a small it budget, and the inability of operational and executive staff to take on multiple new initiatives simultaneously, we recommend that you break down

the implementation of Bi technology into several phases. you can start with small, manageable steps; achieve buy-in and success; and then build on that success. Such an approach provides for organizational learning on a small budget, where mistakes are not expensive. in addition, it also ensures that the lessons learned from the initial Bi deployment enable you to build an approach for a broader company-wide Bi implementation, one that prioritizes high-impact areas and incorporates potential change management issues.

Phase 1: Become comfortable with business intelligence (BI) Executive dashboards Simple reporting

Phase 2: Get an integrated view of operations Operational dashboards Operational reporting Search-based query Ad hoc analysis (initial)

Phase 3: Make BI pervasive Expansion of ad hoc analysis Mobile BI

Figure 1: Three Phases of BI Deployment

SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

your Bi solution should make it extremely easy for you to create or modify packaged as well as ad hoc reports, queries, and dashboards in order to obtain key operational and business insights from your business applications. this requirement is critical since your it resources may be limited and numerous demands are continually placed on them.

From our experience, there are three phases of a Bi deployment, as shown in Figure 1. Phase 1 (crawl) the objective in this phase is for organizations to become comfortable with Bi technology. you should focus on deploying those aspects of Bi that can have an immediate impact on daily decision making, while providing the basis for organizational learning. For this phase, we recommend that you deploy executive dashboards and simple operational reports using Bi technology. Phase 2 (walk) the objective in this phase is to build upon the success in phase 1 and expand the scope of Bi such that your organization becomes comfortable using various facts and insights from the Bi technology deployed (dashboards and operational reports) for decision making across various functions. in this phase

your organization should implement operational reporting, operational dashboards, ad hoc search query, and ad hoc analysis. For example, implementing operational dashboards for cross-functional processes, such as order to delivery, requires integrating data from multiple systems to provide managers with an integrated view of their operations to make trade-off decisions. Phase 3 (run) the objective in this phase is to achieve pervasive use of Bi components so that all decision making is based on facts rather than intuition. SMes in this phase expand Bi components to mobile devices and roll out ad hoc query and analysis to business analysts in all departments. in the next section we paint a picture with use-case scenarios that show how an SMe can use Bi technology in each of these three phases.

SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

use-case scenarios for the three phases

illuStRating how Bi technology can Be uSed By SMes

your specific Bi use case for each of the three phases depends on many factors, including your core business (such as manufacturing, distribution, or services), your industry (such as electronics, industrial products, entertainment, or financial services), your key business and operational drivers (such as global procurement, supply chain complexity, or product innovation), and your level of comfort using new technology within your environment. For the purpose of illustration in this paper, we use a midsize company that makes and sells technology and other consumer products through a direct sales force as well as through distributors. the core operational driver for our example company is competing on service-delivery levels and customer loyalty.

Phase 1 (Crawl) Scenario

when our example SMe implements Bi technology in phase 1, it deploys key executive dashboards and basic departmental reports that focus on its core competencies service delivery and company loyalty. as a result: the Vp of sales gets weekly pipeline reports for various sales regions and channels. the Vp of finance gets a weekly report of new revenue from current and new customers, receivables, and payables. an executive dashboard provides visibility into budgetedversus-actuals for revenue and expenses at various levels of detail.

the ceo and staff have access to executive dashboards such as sales pipeline and week-over-week pipeline changes; total revenue for the week, month, or quarter by geographies and channels; and repeat revenue from top 50 customers. with Bi functionality like this, access to basic data about the business is just a click away and is readily available to help the staff make the right decisions quickly and intelligently. this phase enables the management team to evaluate the value of Bi investments in its day-to-day business operations and determine the readiness of the organization to implement the technology on a broader scale in the second phase and benefit from it.

information required for certain analytics may reside in locations other than your core business system, such as in spreadsheets, on e-mail servers, or in individual databases. an effective Bi solution should make it very easy for you to incorporate such information into reports and dashboards while hiding the complexity of accessing information from such sources.

SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

Phase 2 (Walk) Scenario

with success from executive dashboards and reporting, the value of Bi technology proven, and readiness to expand its usage validated, our example SMe is now prepared to deploy additional Bi components more broadly. in the second phase, this SMe organization begins to implement operational reporting, operational dashboards, and ad hoc search query and analysis. as a result: the Vp of operations and staff get operational dashboards and reports that provide up-to-date information on inventory turns and gaps between demand and supply for key customers. the finance department gets access to reports and dashboards for margin analysis, cash-flow projections, and departmental performance versus budgets at various levels of detail. the sales organization gets detailed sales force activity, commission, and pipeline reports, as well as moredetailed dashboards containing sales pipeline and forecasting data, sliced by distribution channels, customer type by industry, and sales regions. Security in the Bi software ensures that each sales manager can view the pipeline entries in dashboards or reports only for his or her sales team. executive dashboards provide information on profitability by customer, product line, sales channel, and geography.

using ad hoc Query and analysis executives can perform search-based ad hoc analysis by entering keywords, such as sales of fusion fridge, in a search box. the search function of the Bi software finds and presents the most relevant results first and then automatically generates the visualization, such as a table or a bar or pie chart, that optimally presents the information without requiring previous knowledge about the data structure or where to find it. using the intuitive user interface (see Figure 2), the executive can rank the top sales districts by direct sales revenue, drill for detail at a product level, and determine if the company is making its numbers by selling a higher volume of lower-margin products. with this information, the executive can

decide whether to push higher-margin products and then determine what type of incentives might be needed to motivate the sales organization. accessing data across Multiple Sources operational dashboards, search-based ad hoc analysis, and reporting require a company to get information from enterprise resource planning (eRp), customer relationship management (cRM), and budgeting systems as well as from other data sources, such as spreadsheets and databases. our example SMe now has developed expertise to bring information from multiple systems like eRp and cRM into its Bi solution. having gained this

Figure 2: Search-Based Ad Hoc Analysis

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SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

expertise, the organization can roll out additional Bi functionality, such as ad hoc analysis, to a select number of business analysts. the process is easier than you might expect, because leading Bi solutions, such as Sap Businessobjects edge Bi software, come with a data integration component. Business analysts can use the functionality to: View product sales across multiple dimensions, such as product line, customer type, sales region, time period, and salesperson Slice and dice the data to look at various combinations, such as the sales in each region for a specific month or the products each customer purchased last year perform period-over-period or yearover-year comparisons for dimensions such as sales region, customer, or salesperson Filter data to look at the top 15 or bottom 15 (or any other number) or best- or worst-performing products, sales districts, or salespeople with such insights, business analysts can make specific recommendations to the Vp of sales and Vp of finance to help improve overall sales performance.

Phase 3 (Run) Scenario

in the second phase, the organization begins to use a broad set of Bi technologies across various organizations. Based on this success, the third phase is about making Bi pervasive within the company, deploying it on mobile devices, and using it for predictive analysis. in this phase, our example SMe organization begins to leverage Bi on smart phones to make faster decisions. For example, while in a meeting with a customer, the Vp of sales can perform a series of queries on a smart phone to

see how much additional revenue the team needs to make its numbers, how profitable the product line has been, and how loyal the customer is in terms of repeat purchases. with this data in hand, the sales manager can decide to offer another 15% discount to the customer for signing the purchase order before the end of the quarter. in addition, the organization starts to roll out ad hoc query and analysis to all departmental business analysts so that its pervasive, enabling everyone in the organization to make better-informed decisions more quickly.

Midsize organizations have limited resources, so a Bi solution should deliver low cost of ownership through off-the-shelf integration. in addition, the solution should provide templates and other tools that simplify and accelerate the creation of custom reports, queries, and dashboards, eliminating the need to hire expensive outside consultants. the Bi solution should also have relevant components built into the solution to reduce the need to buy additional software.

SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

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critical requireMents for a Bi solution

gaining the edge

Supporting the Pervasive Use of Business Intelligence

in order for an SMe to start small with executive dashboards and basic reporting and grow into a pervasive user of such technology, a Bi solution must meet several requirements. a comprehensive Footprint perhaps in the early phases of Bi technology you had a choice of selecting reporting-only or dashboard-only products in the market. however, if you went with that option, you were forced to buy multiple products and build multiple skill sets an expensive proposition for an SMe. now a single solution should be able to take you through all three phases from crawl through walk to run so that all the various components fit together and you do not have to buy different products for different functionality. the solution should also be able to scale as you do more with it across your organization. ease of use the Bi solution should make it extremely easy for you to create or modify packaged as well as ad hoc reports, queries, and dashboards to obtain key operational and business insights

from your business applications. this requirement is critical, since your it resources may be limited and numerous demands are continually placed on them. Furthermore, information required for certain analytics may reside in locations other than your core business system, such as in spreadsheets, on e-mail servers, or in individual databases. an effective Bi solution should make it very easy for you to incorporate such information into reports and dashboards

while hiding the complexity of accessing information from such sources. ability to access information through Microsoft excel Most executives around the world are comfortable using Microsoft excel for a quick analysis. as a result, they want to make sure that their Bi solution can export data into Microsoft excel on their laptops and desktops. Such functionality has the potential to significantly enhance the productivity and the effectiveness of all business users (see Figure 3).

Figure 3: Improve Productivity by Accessing and Refreshing Data with Microsoft Excel

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SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

low cost of ownership while Supporting growth Midsize organizations have limited resources, so a Bi solution should deliver low cost of ownership through off-the-shelf integration. in addition, the solution should provide templates and other tools that simplify and accelerate the creation of custom reports, queries, and dashboards, eliminating the need to hire expensive outside consultants. the Bi solution should also have relevant components built into the solution to reduce the need to buy additional software.

How SAP Addresses These Requirements

Sap delivers a very compelling Bi solution for SMes through Sap Businessobjects edge Bi software. this product allows SMes to get up-to-date intelligence from multiple information systems to improve decision making throughout the organization. it provides comprehensive Bi functionality, including ad hoc query, reporting, and analysis; integration with Microsoft office and Sharepoint solutions; and ease of integration with portals and external sources of data.

as a result, your organization can start small and grow with the software as your requirements, knowledge, and expertise increase. the software is designed so that business users can create and modify reports, queries, and dashboards without the need for support from your internal it staff or expensive third-party consultants. in addition, the software provides low cost of ownership, a critical criteria for SMes. as a result of a broad footprint, the ability of users to create or modify reports and dashboards, and low cost of ownership, Sap Businessobjects edge Bi has become one of the leading products in the industry.

SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

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achieVing peRVaSiVe, Fact-BaSed deciSion MaKing

suMMary

Sap Businessobjects edge Bi enables SMes to leverage their core strengths, such as speed and focus, by enabling them to gain deep and clear insights into their company that help them proactively identify, prioritize, and address issues; improve organizational alignment; and enhance resource utilization. you can use the road map provided in this paper to start small, experience key learning and success, and then build upon it so that fact-based decision making becomes pervasive throughout your company. For More information to find out how Sap Businessobjects edge Bi software can help your organization on the road to pervasive business intelligence, contact your Sap representative or go to our web site at www.sap.com/solutions /sapbusinessobjects/sme/edgeseries.

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SAP Thought Leadership why Business intelligence Makes Sense for Midsize companies

SAP Thought Leadership Business intelligence

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