In this podcast, industry expert John Hagerty addresses business intelligence (BI) analytics in the midmarket. He identifies key strategies, technologies and tools midmarket CIOs need to get the most out of their BI labors.
BIOGRAPHY: Hagerty brings more than 25 years of experience in enterprise applications, performance management and compliance to his role as vice president and research fellow at AMR Research Inc. He is responsible for leading AMR Research's analysis on strategies, practices and trends driving governance, risk and compliance, BI and performance management initiatives in corporations worldwide.
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Read the full transcript from this podcast below:
BI analytics on steroids: Expert podcast
Karen Guglielmo: Hello my name is Karen Guglielmo, the special projects editor for SearchCIO-MidMarket.com. And I'd like to welcome you to today's expert podcast on BI (Business Intelligence) analytics. I'm joined today by John Hagerty. John brings more than 25 years of experience in enterprise applications, performance management and compliance to his role as vice president and research fellow at AMR Research.
He's responsible for leading AMR Research's analysis on strategies, practices and trends. Driving governance, risk and compliance, business intelligence, and performance management initiatives in corporations worldwide; John joined AMR research in 1998 to cover financial and administrative applications. Before taking over the SAP practice in 1999. He spent the last several years covering performance management and compliance. Welcome John.
John Hagerty: Hello Karen it's a pleasure to be here.
Karen Guglielmo: Great. And as I mentioned earlier, we're here today to talk about BI analytics in midmarket companies. And I'll spend the next 10 to 15 minutes asking John to answer a number of questions about today's topic. And today's discussion will cover key strategies, technologies and tools midmarket CIO's will need to get the most out of the BI labors. So John, we can get started. First question I have for you is; in addition to help with sales and marketing forecasting and analysis, can BI tools also help optimize initiatives such as financial reporting, server utilization and risk management?
John Hagerty: Yeah, without a question Karen. You know, the interesting thing about business intelligence is that as a technology it can be applied to any content area whatsoever. So although it's well known in the areas of sales analysis and customer analysis, it's also very well applied in financial. And increasingly being applied to areas of system administration like understanding how your infrastructure is actually performing.
One of the things that we see as a big trend is that companies are looking to understand places where they're exposed. It's kind of another name for risk management. And the key fundamental for anything with risk management, has a lot to do with visibility. And that's just what business intelligence does. It gives people the ability to understand what risk they're facing, and then potentially what actions they should take following that.
Karen Guglielmo: Interesting. So do you think, in your opinion, are BI tools being used to their fullest potential in midmarket companies? Why or why not?
John Hagerty: No. I think that what you'll see in midmarket in general is that business intelligence is really more of a relatively new phenomenon. Customers have implemented in some cases, some pretty straightforward query and reporting capabilities. But query reporting is really only one aspect of business intelligence.
We see a lot of people stress the fact that some of the infrastructure issues like around data quality is one of the key determinants of whether they get a lot of value from BI or not. So we see that that will be something the midmarket will be using more of over the next couple of years. And there's also this emerging area of analytic applications, which allow business intelligence tools to be fixed towards very specific types of content, be it manufacturing or supply chain or operations that give companies more visibility into what's happening within the core of their business. So we see that really, in the midmarket environment, business intelligence is really kind of at an early stage of maturity with a long way to go in order to get back some value.
Karen Guglielmo: So for those midmarket companies who are not investing in BI as of now, what would you say is the main reason? Is it cost, lack of resources, not educated enough on the tools, etc?
John Hagerty: Well there are two reasons. Regardless of what size company that people point to as why they are blocked from using business intelligence. The first one is the availability of skills. And I think that has a lot to do with the fact that there are a lot of different things that people can spend money on. And BI resources, because they're so hot at all different levels of the marketplace, they're inherently not available or expensive. So a lot of companies have had to defer BI plans because they can't get the people at a reasonable cost.
The secondary thing is well as a lot of people think that business intelligence is really just Microsoft Office or Excel. And I think that when they start realizing that there's a lot of infrastructure work to be done to make BI really work effectively as well as lots and lots of different ways to analyze and look at information around key metrics of the business, they start to realize that it's a bigger problem than they thought. Or a bigger scenario than they thought. So sometimes the scope of what BI can include sometimes scares people away as well.
Karen Guglielmo: It's funny that you mentioned Excel because my next question I had for you is, I had recently read a report that said that many users are still using Excel and other spreadsheet programs to analyze their data. And the report did even note that these users are also saying that they spend much of their time correcting out of date data, yet they still can't get away from using these types of programs. Is there really that much of a learning curve for users to move away from traditional spreadsheets and do they not realize the benefits of other real-time data programs like BI?
John Hagerty: Well you brought up a good point. Which is, people are using these tools because Excel in particular allows them to kind of wash away a lot of the underpinnings that maybe aren't working correctly. So data quality, which I mentioned earlier, which is a key issue that companies deal with, a lot of people say, "You know I'll worry about it when I deal with it in Excel."
Well I think that when people start looking at where they spend their money and they realize it's all about data aggregation and data prep, they recognize that "Jeez it's really not business intelligence or analysis at that point it's more of the rudimentary work about getting data together."
So although Excel tends to be the focal point for a lot of people to do that work, it's not like the other products require a complete training in order to use them effectively. In fact, one of the things that have happened over the last couple of years is that virtually every one of the business intelligence vendors has gotten much better in terms of creating what I would call a ‘walk up and use interface’.
Now, can you be an expert in a walk up and use interface? Probably not. But I think that they're much more approachable then they used to be. And the other thing that I would say is that as opposed to casting Excel and Microsoft Office in a negative tone and then BI in a positive tone, I think what you're really seeing is a marrying of those two things together. Whereas some of the structure and models that might be created in business intelligence about how your business really ticks can be represented within Excel. So it's not like you're starting from scratch every single time with a blank workbook. What you're doing is you're going to be diving right into the data in context with the type of information you're looking at.
Karen Guglielmo: So using both is probably most beneficial.
John Hagerty: I really do. And I think that it's always better to how people work rather than force people to change. And I think that most people do work in Excel. The idea is to enable Excel with better business intelligence.
Karen Guglielmo: Got it. Could you comment on the big players or vendors for midmarket companies who are looking at BI analytics software today?
John Hagerty: Sure. I think that you have to mention Microsoft. Microsoft is an absolutely huge player in the midmarket as well as other sectors of the marketplace as well. But you'll also see that the other names in business intelligence have very considerate efforts to spread their products to the midmarket. And I'm talking specifically about Business Objects which is now owned by SAP. Cognos, which is now owned by IBM. And Oracle, which has products at all different levels of the enterprise.
So I think what you see is that before there may have been companies that specialize in the midmarket and companies that specialize with the upper end of the marketplace. Now everyone recognizes that the differences aren't as stark any more. And the same products really apply to two different places.
Karen Guglielmo: Okay. And I actually have one final question for you today. How can BI analytic tools help with compliance, and even the auditing process?
John Hagerty: Well that's an interesting one because I want to take the approach around compliance really more from a risk management standpoint. One of the things about compliance is you have to understand places where you have certain anomalies. Business intelligence is great at showing you what actually has happened. So I think BI can be used really well to be able to allow an organization to understand the places where they have some exposure. And feeding it to a compliance frame of reference.
When it comes down to auditing, auditing is really about verifying that certain business transactions happened the way that they were supposed to. And secondarily that if fraud is being committed you can spot that fraud. Well business intelligence allows you to extract and look at this information in a business context, I think in some cases you need to rely upon more advanced algorithms to determine whether fraud is happening or not. So BI plays a foundational piece in that but it may not be the be-all end-all answer for auditing.
Karen Guglielmo: Okay. And on that note, that does conclude today's podcast. Thanks again to John Hagerty for speaking with us today. And thank you all for listening. Have a great day.