By Brian Kilcourse, Managing Partner
5/19/2009
There’s nothing like being on a burning platform to get you focused on what’s important, or at least that’s what “change” gurus like to say. Another useful analogy is that when you’ve got your eyes on the white line while driving through the fog, it’s hard to see more than a car length or two ahead. Perhaps that’s more applicable to what’s going on in retail during these economic times, because it implies something about the environment (foggy) and something the driver (focused on one white line segment at a time, not the curve coming up). The guy on the platform is just jumping, while the driver is still trying to move towards the planned destination.
Retail Winners are really focused on the white line, and want to get actionable information into the hands of operations management so that they can react very quickly to real-time conditions in the selling environment. RSR’s recent research shows that this push for real-time operationalized business intelligence affects both the customer-facing side of the business and the supply chain side. But just being more agile isn’t quite enough; Winners also want to use the data collected from operations to see farther ahead.
Switching from analogies to a truism (this one attributed to Plato, no less), “Necessity is the mother of invention.” It’s the need for greater visibility into current conditions as they are happening and beyond the horizon, that has pushed business intelligence to the top of the agenda for retailers. Fortunately for retailers (who like choices), technology solutions companies saw this coming, and that’s a reason why IBM acquired Cognos, Oracle acquired Hyperion, and SAP acquired Business Objects. So these hard economic times have created a serendipitous opportunity for retailers and solutions providers: retailers need a solution, and tech providers have one.
Enter SAP/Business Objects Explorer
That was certainly on SAP CEO Léo Apotheker’s mind when he gave the keynote address last week at the SAPPHIRE conference in Orlando. He noted a number of “paradigm shifts” in the cost and availability of technology:
· The “internet of things,”
· Virtualization,
· On-demand deployment,
· Mobility,
· In-memory data, and,
· analytics with real-time access.
The last two (In-memory data and real-time analytics) are realized in the SAP/Business Objects Explorer product. Apotheker live-demo’ed the software, showing off its natural language search & select and instant analysis capabilities. In SAP’s view, such instant intelligence capabilities are critical to providing the clarity businesses need to create a “virtuous cycle” between strategy and execution (where strategy is refined with each turn of the execution wheel).
SAP BO Explorer enables the user to ask a simple question via a Google-like interface and then further refine the query with a set of selectable criteria. Technologists would immediately recognize that it’s metadata that is being displayed. By easy pointing and clicking, the user can get very quickly to the desired answer set, drag it into an analysis window to be charted or compared to a previously selected answer set, and finally be filed or forwarded as the user sees fit. The CEO’s reasoning for including “in-memory data” in the list of paradigm-shifting technologies became immediately obvious; what made Apotheker’s demo really fly was that underneath the covers, the SAP BO Explorer accelerator was being used (a blade server that can be supplied by Sun, HP, or IBM).
What’s the Real Benefit?
The CEO made the point that now top executives could ask new questions about the business and refine business strategy based on what they learn (“even a CEO can do this,” Mr. Apotheker joked). It sounded good, and the demo really did have significant buzz-factor to it. I couldn’t help but to think though that the real benefit of technologies like SAP BO Explorer is that they enable IT departments to deliver intelligence to the business much more quickly than before, simply as a result of having the ability to put extremely large datasets in-memory. Thus the need to organize data based on a presupposition of the questions it will be asked is no longer necessary.
If your reaction to that last paragraph is “huh?,” here’s a further explanation. One of the inherent problems with “legacy” business intelligence systems in retail is that the data needed to be organized around a set of anticipated questions, so that an answer could be delivered to the business user in a reasonable timeframe. The reason that’s a problem is that the more the business used BI systems, the more sophisticated the questions got– and that’s exactly what proponents of BI systems would want. But something very bad can also occur- the dreaded serial scan of a large dataset that not only doesn’t deliver an answer in a reasonable time, but also perhaps also stops the entire enterprise from conducting business (for example, the question “how much total business did we do with Vendor-X this year-to-date?” could theoretically cause several transaction systems to go into a wait state). The introduction of metadata some years ago to facilitate queries across a number of disparate data sources actually made this risk even greater. For that reason, most IT shops limit the number of adhoc queries that can be run, and are constantly tinkering with the physical organization of the data to speed things up.
The net result can be a high level of dissatisfaction with IT, which appears unresponsive to business demands for more, faster, when in fact the real problem is that it just can’t keep up with demand because the tools make it too hard. This is the problem that SAP BO Explorer (with its accelerator) fixes, and it’s that’s a very real benefit. While I have known very few CEO’s who have the time or the inclination to spin data (they are too busy addressing the external challenges and opportunities presented by the business environment), their direct reports need to be able to match the rate of change inside the business to the rate of change in the environment. That takes tremendous insight (or clarity, as SAP is now saying) into what’s happening right now, and that’s what SAP BO Explorer promises to provide.
Should You Go Out and Buy It?
Existing SAP/BO users are the immediate beneficiaries of the newly announced software. SAP promises that SAP BO Explorer will soon be able to address external data sources as well, and that will broaden the appeal of this solution significantly.
This is also where we find our only caveat. All BI systems demo really well. And the theory of being able to electronically troll through disparate data dictionaries to match like data elements sounds simple, but isn’t always. For example, is a piece of information named “region” the same as “market” in another application, or is it a whole other hierarchy? How long will it take and how much will it cost to rationalize this information? We encourage business users with high expectations and a boatload of disparate systems to get realistic estimates before presuming instant ROI.
The promise of greater competitive advantage through a less obstructed view of the business is real enough; RSR believes that businesses that can identify inefficiencies in their processes and quickly and effectively make operational improvements should be able to generate sufficient gains to afford to focus on differentiation. Those that can’t, won’t.
What makes it imperative that retailers address the limitations of “legacy” BI systems now is the current economic environment. There isn’t enough “fat” in retailers’ operations to put off the opportunities that being able to see provide. This is a right-here-right-now challenge, and fortunately there are technology enablers available that help retailers meet that challenge.
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