Not too long ago companies suffered from having too little data with which to manage the company's operations. The ERP age has brought in a different problem of too much data, but too little information. This is not unusual because transaction systems, such as ERP, are designed to capture data and make a record of a transaction, principally for accounting purposes. They were not designed to provide insight gained from analyzing many similar transactions.
Financial services and telecommunication companies have pioneered the use of business intelligence (BI) solutions to enable them to analyze massive amounts of data they have accumulated over the years. As a result, considerable insight was gained from data mining and data analysis and thus, the need for BI capabilities grew in the '80s and '90s in other industries as well. But despite being a topic explored and written about extensively, there has been only a moderate uptake and mediocre results. Why? Pure business intelligence (BI) tools suffer from two major drawbacks that prevent them from providing greater value and therefore obtaining greater adoption: They cannot identify causality and, as a consequence, they cannot provide a prediction of future performance.
In the past 5 years, the interest, and indeed the need, for real-time access to operational data has increased dramatically. The promise of real-time operational BI that goes beyond the capturing of static data snapshots and enables users to identify and analyze risks and events, is of major interest to supply chain management (SCM) managers. Driven to improve operations performance, supply chain managers know that better information about their operations and processes lead to better decisions and better supply chain performance.
What do you say when the CEO is asking whether the company will hit its revenue targets for the current reporting period? Can you tell the CEO instantly which customers may be facing late delivery, and which orders may not ship and why? Can you tell the CEO what is causing the late deliveries and how the company could get back on track? You should, because it is in these answers where the business value lies. We just posted a paper that highlights what's at the heart of evolving business intelligence into business value.