Business Intelligence Blog from arcplan

Analytics – Not Gut Feeling – Should Drive Business Decisions


You know the gut feeling that leads you to take a different route to work or accept one job over another? Those gut feelings may have led you on the right path, but they’re personal decisions where you have only so much information (a traffic report on the radio or both companies’ financials) and you would expect to make your decision based on gut instinct. These personal choices affect only you and potentially your family in the case of a new job. But relying on gut instinct alone in your business life is a mistake – there’s simply too much supporting evidence to take into account when making business decisions (decisions that affect much more than just yourself). Why play Russian roulette with these decisions when you’re surrounded by analytics?

Sound business decisions are based on facts, data analysis, trend spotting, or other complex calculations, and yes – a bit of intuition. But your instinct should be used as an indicator, not the basis for your decisions. In every business there are variables and unique scenarios that make planning and analysis imperative; neglecting these factors could have serious implications. Consider this example: The 2010 Report of Anton R. Valukas examined the demise of Lehman Brothers, a formerly dominant global financial institution that went bankrupt during the recent financial crisis. It revealed that the company excluded some assets from routine stress performance calculations (meaning the company couldn’t know how much money it was in a position to lose because it was not performing what-if analysis) and valued some real estate investments on a combination of financial projections and “gut feeling” according to a Lehman Brothers vice president. In essence, the company’s business practices lacked analytic insight, or at least the will to get it. There is no doubt that Lehman Brothers had access to multitudes of data on its assets, on the market, and on its level of risk. Armed with this information, I’d hope executives would have made better choices, taken on less risk, and valued their assets more realistically.

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Big Data for Manufacturers: Customer Feedback Should Influence R&D


In 2001, The McKinsey Global Institute published a comprehensive report on big data, Big Data: The Next Frontier for Innovation, Competition, and Productivity, which explores the value that companies across various industries may yield as result of the big data explosion. So far we’ve explored the impact of big data on retail and healthcare companies, but today I’ll explore how big data analytics impact the manufacturing industry.

The manufacturing sector stores more data than any other sector, according to the McKinsey report. Manufacturers will likely get the most benefit from big data analytics since they have so much “raw material” to work with (from machinery metrics to sales systems). Manufacturing is a relatively efficient industry, with many advances made over the last few decades to streamline processes and improve quality through management practices like lean & six sigma (and lean six sigma!). But big data can be the impetus for the next wave of improvements in manufacturing, especially in R&D.

Research and Development
Streamlining the R&D process results in greater efficiency and reduced costs for US manufacturers and is important for products to be competitive in the global economy. But in 2012 and beyond, manufacturers should be going further, leveraging big data to influence design decisions. This means incorporating customer feedback into the process, designing products and adding features that customers actually want. McKinsey calls this “design to value” or “value-driven design.”

Surveys: I’ve taken consumer surveys that ask questions like “How much more would you be willing to pay for x feature?” and I now understand why companies are asking this. They are culling data from consumers about what features are desired and if they are included in the product/service, what is the value, i.e. how much are people willing to pay for it. Gathering concrete insights is one step toward big data analytics influencing R&D. Manufacturers should be listening to what consumers want and refining their designs accordingly. It’s just smart business.

Here’s a concrete example: Domino’s Pizza. You might not think of Domino’s as a manufacturer, but it is – the company is a serious dough manufacturer, producing and distributing dough to more than 5,000 US stores.

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3rd Annual Wisdom of Crowds BI Market Study Open Now!


Howard Dresner’s Wisdom of Crowds Business Intelligence Market Study was created as a way to give a voice to those actually using BI solutions, creating a new and different perspective for measuring BI vendors and products in the market.

This year’s study is up and running and we invite BI users to participate! If you have 15 minutes between today and April 2nd, please visit the following link and give your feedback:

This year, you can rate up to 5 vendors. Simply loop back through the survey once you’re done to rate additional vendors.

In return, you’ll receive a copy of the study findings. Thank you for your participation!


Don’t Fear Cloud Computing (or Cloud BI)


Cost efficiency, flexibility, and availability of data are key advantages of cloud business intelligence

This year, cloud computing is set to dominate CeBIT, the international IT and telecommunications trade fair held each year near arcplan’s headquarters in Germany. According to a recent survey by the analyst firm IDC, cloud computing will account for 10% of global IT expenditure by the year 2013. While we have taken advantage of cloud offerings in our private lives without hesitation for years (just think of Google Maps and Gmail), businesses have only been comfortable with a few applications (like CRM) residing in the cloud. Many companies still have doubts when it comes to shifting applications into the cloud when security is critical, as it is with business intelligence. Concerns over data security breaches and their consequences are holding some businesses back; however, the advantages of cloud-based BI clearly outweigh the potential drawbacks. Here are our most important reasons for moving business intelligence applications into the cloud.

Cost efficiency is key
Among the greatest advantages of cloud BI are cost savings and reduced capital commitment. Upgrades, maintenance and administration of on-premise software are time-consuming and costly. If companies shift their BI solutions into the cloud, they will no longer have to budget for large, up-front purchases of software packages or carry out time-consuming updates on local servers. In the cloud, upgrades are installed directly by the service provider in near real-time. Using any kind of device (desktop computer, laptop, tablet PC, or smartphone), employees can access the most recent version of their BI solution, independent of location and without having to download upgrades or request updates from the IT department. Users can therefore focus completely on data consumption and analysis, getting the most from BI without having to deal with the infrastructure.

Large- and small-scale flexibility
Companies that manage their own BI systems on-premise have invested in their infrastructure to deal with ever-increasing quantities of data. To analyze data volumes amounting to petabytes or even exabytes and have a 360-degree view of data in real-time, immense processing power and extremely large amounts of memory are required. For processor-intensive BI applications, solutions running in-house can quickly reach their limits. This makes another of cloud BI’s advantages clear: the enormous flexibility afforded by cloud software deployment.

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Guided Ad-Hoc: It’s Not an Oxymoron


Limiting the ad-hoc experience may be best for most business users.

Last time, I wrote about how the concept of self-service is driving ad-hoc adoption and presented the kinds of skills users need in order to effectively take advantage of ad-hoc reporting tools. The conclusion was that even though self-service is great for the power users in your organization, it should not be seen a silver bullet for regular business users. Sure, business users want to be able to answer business questions on the fly, but most ad-hoc reporting tools are going to be too advanced for them. So what can you offer them?

Most people need a guided ad-hoc experience or straight-up guided analytics, i.e. dashboards and scorecards. Guided analytics are suitable for most business users, especially executives and managers, and can contain an ad-hoc component that allows for some on-the-fly report creation. To the right, you can see an example of a dashboard solution whose final tab is ad-hoc.

The other option is to offer “guided ad-hoc” to users, meaning that there is some structure to the process; you have the flexibility to generate your own reports within certain parameters. For example, a guided ad-hoc tool may allow the user to build a report from a list of predetermined columns and rows. This way, the user has a solid foundation for creating their report along with complete flexibility for generating the answers they need.

Whether you choose to implement a guided ad-hoc tool or a guided analytic application with an ad-hoc component, features that are essential include familiar controls like undo and redo buttons. Drill-down, filters, and charts are features users expect. Business users may also want to share reports with their peers or decision-makers, so the ability to create a PDF, export the document to excel, or simply print are useful features as well.

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