• Strategy
  • CFO Europe Magazine

Connecting the Dots

Companies have done a good job figuring out how technology can help them capture and crunch data. Now comes the hard part.

The good news is some of the barriers to preventing enterprise-wide strategic BI are falling fast. Notably, the technology has improved in leaps and bounds. Over the past couple of years, innovation and heavy investment by both large and small vendors — not to mention plenty of end-user customization — have brought a host of BI tools capable of extracting and integrating data from all sorts of sources and turning it into operational intelligence on which to base forward-looking strategy. “Today’s business intelligence should be able to direct you in terms of what sales you should do next — predictive modeling, sales pipelining, forecasting what market segments have the highest propensity to buy a service,” says Andreas Bitterer, a Hamburg-based analyst at Gartner, a market research company.

Stuck in Silos

Now that those capabilities are a given, the next step towards strategic BI is greater standardization. At the moment, says Kellett of Butler Group, companies are awash with BI tools — but most are “silo-based” within individual departments so information is only shared within small groups, rather than across an organization. Why should companies go through all the hassle of standardizing BI tools? “For all the same reasons other technology is being standardized in other parts of an organization: better integration, easier administration and more security. It could also mean lower costs,” he says.

In order to reap the benefits of standardization, however, Kellett says companies should bear in mind that some technology cannot be standardized easily. The key is to probe vendors about whether the technology will be up to the job by finding out whether an application can support, among other things, a growing number of individual users who will require variable access and data manipulation rights; the use of scorecards and dashboards; and third-party applications, portals and web tools.

But beyond the technology, there’s a far greater barrier preventing the development of strategic BI: people. Just ask Jeff van der Eems, CFO since last spring of £1.3 billion United Biscuits, known in the UK for snacks such as McVitie’s biscuits and Jaffa Cakes. As a relative newcomer to the London-based company, van der Eems has been impressed with the amount of performance data — driven by a BI application from Cognos and in-house tools sitting on top of an SAP system — that finance has access to. “It helps me most in understanding brand dynamics — what the relative margins are, what the costs are to grow the brands and so on,” he says. In addition, the plant performance information, such as the per-unit productivity, is also vital. “To be the best brand you also have to be the lowest cost producer,” he says.

The problem is that intelligence isn’t reaching as many parts of UB as van der Eems would like. “BI works very well within finance, because that’s the mindset and that’s the core competency,” he says. “Supply chain individuals use it very well too. That’s just the nature of the beast — it’s an internally controlled environment and they’re very numerically driven.” As for sales and marketing, “that’s not so good,” he says.

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