Business Accent

BI: the time factor

Sanjay Shah concludes his article on the necessity for an organization to implement a BI solution at the right time

Sanjay Shah

Mistake 4 : I shall do BI once I am a little free

“I have only 20 working days in a month. The first seven go in corporate reporting. Then a few days go in collaborators reporting. Then a few days go in answering all the queries on last month’s performance, which I get from my bosses in India and abroad. I have to answer the internal and the statutory auditors. I have to see that my excise and indirect returns are filed in time. I have no time or energy for any other initiative.”

Such is the life of a typical corporate executive. They have no time to breathe and are perennially stressed out. They are so busy that that they don’t have time to sharpen their proverbial axe. The result is that their energy and efficiency keep getting lower and lower.

Now let’s analyse.

Why does it take seven days in doing corporate reporting ?

“Well it takes 6.75 days to make the reports, and 0.25 days to read the numbers. I have been employed to analyze the results, but I get no time to do so”.

Why does it take so much time to answer the queries?

“I don’t have the underlying figures readily. I have to refer to so many sheets and workbooks, that sometimes I lose track.”

Why does it take so much time to answer the auditors?

“They keep asking me for comparison ... with the previous month, with same month last year, YTD this month and YTD same month last year, balance to go, ratios, etc. Each time I have to do this in order to satisfy them.”

What if I give you all this in just 30 minutes, automatically and without manual handling of data?

“You must be joking!”

Friends, this is a real life scenario of one of my client. It was impossible even to get 10 minutes of his time. The above discussion took place at a lunch appointment with him which I got after six months of follow-up. I convinced him that if he gave me his trial balance data, I would give him (without involving his IT team) all the reports, with all comparatives and ratios with full drill down to the gl-code level in exactly 30 minutes and that too in his favorite tool .. Excel. He looked at me with great understanding, more like a psychiatrist looks at his patient. But when I bet my whole career on this, and told him that I would take the money only if it is successful, he agreed.

He is still a busy man. But he has risen up several ranks in his organization. And I am welcome for lunch with him any time!

MOTS : BI can free you to do what you are hired for.

Mistake 5 : I have the world’s best ERP, why do I need BI ?

Many managers are still under the impression that ERP and

BI are competing environments. Whenever I show them a multidimensional BI report, they say that they have a foreign ERP, and all the reporting can come out of their ERP. They have probably never actually used their ERP hands on. ERP is a transaction processing system, which automates basic business processes like store keeping, billing, accounting, purchase, and other record keeping. There are a lot of operational reports which it generates, but it is not designed to do reporting like BI does. Making ERP do what BI does, would be like cutting a diamond with a hacksaw!

I once got into an argument with one senior manager to whom I was giving a presentation. I was showing him the capabilities of BI. But each time he mentioned that this can be done in his ERP and was willing to show me that. So I said that let see what is available. He called for his assistant with a laptop, connected to the network in the conference room. He asked his assistant to show him the various reports in Accounts Receivable which were designed.

There was a report which showed a summary of AR by branch, another by region, another by customer, another showing top 20, another showing top 20 for each branch, another at an invoice level and so on. For every different view of the same data, the system required you to go to a different menu option, give parameters and save the report to a text file. It would take approximately 20 minutes for each view. The same views could be generated from a single BI report, in a fraction of a second by just dragging and dropping, slicing and dicing. The solution would cost just one tenth of the cost of developing the 20 reports in ERP. But the manager stuck to his guns. We did not get the account. But then, can one catch all the fish in a pond ?

MOTS: BI, it’s different! In a single report you as an end user can intuitively see multiple views. Intelligent dimensions can be added so that you can quickly go to the problem area. You are no longer dependent on scarce IT resources each time you need a different view!

Mistake 6: I know everything, I don’t need BI.

I know of one person who kept saying that all this BI stuff is just a waste of money. If one knows excel and vlookup, then nothing more is required. I am always amazed at how all-pervasive MS-Excel is. I am also amazed at how little MS-Excel is really exploited. This person I knew was at a senior position in a company and his charge was correct stock valuation. This is a very important task, as with the quantum of stocks the company was maintaining, even a 1% error in stock valuation could considerably change the profit of the company. The company carried a large number of items in stocks, and with multiple factories and warehouses, the number of lines in the report was far in excess of MS-Excel’s (2003) limit of 65k rows.

At the beginning of each month his life would consist of downloading various inventory reports (of each warehouse, each factory, etc.) individually and dumping them in excel. He would then remove the headers and footers if any. Then would come the task of creating a vlookup on another workbook for getting the last month’s rate in another column. Then he would compare the current and last month’s rate to find if there is a difference. All this had to be done carefully. He would get the entire thing cross checked from another person. Four days was the minimum time taken by him for this exercise. The entire finance department would wait with bated breath for him to complete this and announce the stock numbers.

The MD would be breathing down everyone’s back. This gave him a tremendous sense of importance. Nothing can be done till he finishes his task. Because of this, he steadfastly refused any automation help. And then one day he fell ill at the beginning of the month.

We created a small database driven application in which multiple months data was stored in the same table. The user was able to select the current and the month to compare with.

The application created buckets for the difference so that the higher differences could be easily spotted. In the parallel run in the next month, he again took four days to finish his task and find the cause of difference. The BI module took exactly 10 minutes to do the same task.

MOTS: BI gives us a more intelligent way of working, so that analysts can concentrate on analysis rather than doing the routine work. It also makes the routine task of making the report person independent.

Mistake 7: I don’t need a third party BI, my ERP vendor gives me everything

It would be very good to find a vendor who does everything … makes ERP, makes CRM, makes BI, etc. That way clients would have to deal with only one vendor. There would be no multiple vendors pointing fingers at each other, etc.

That’s how IBM, DEC, Sperry Univac, Wang, etc., worked in the 1980s. It is called the ‘vertical’ way of working in a book called ‘Only the Paranoid Survive’ by Andy Grove (Founder Chairman of Intel). Specialization hit the computer industry. Many of these dinosaurs did not survive the “10x force” (as Andy Grove calls it) of the “horizontal” computer industry. After all everyone cannot do everything perfectly. I strongly believe that a day will come when there will be super-specializations.

There would be companies who are good in ERP and some in CRM and some in BI, etc. This would be true of developers as well as implementing partners. I feel all need different and specialized skills. All the systems would come with standard well defined interfaces so that they could work in an interoperable manner ... much like the way the PC developed.

MOTS: It is not necessary that the vendor who has made or implemented the ERP would be the best source of BI as well. Look around and you would find examples of great and more cost effective BI products (which leverage your existing investments) and solutions done by vendors other than your ERP vendors.

(All the above examples are fictitious examples narrated only for the purposes of this article.)

Conclusion

A BI solution done at the right time can save hours of unnecessary and tedious efforts of the information worker, and can save millions for the company in terms of real business benefits like reduced inventory, improved receivables, better gross margins and a more productive shop floor.

Recession is like a time when an athlete prepares himself for the upcoming race. So go for BI… now!

Sanjay Shah is the CEO of Prosys Infotech Private Limited, a Pune based company specializing in developing BI solutions on the Microsoft BI platform. He can be contacted at sanjay@prosysinfotech.com.