Treasury Today Country Profiles in association with Citi

Business intelligence

As companies look ever more to their treasurers to drive process efficiency, improve cash management and reduce costs, business intelligence provides the means and opportunity. In this article we examine what business intelligence is, who the software providers are and whether it is right for your company.

As global economies continue to suffer, companies throughout the world are examining ways in which they can cut costs and increase revenues without massive investment or total process re-engineering. One way to do that is to take advantage of existing databases of financial and business information to develop process efficiency and aid decision making – using business intelligence (BI).

What is business intelligence?

At its core, BI is a decision support system geared at taking existing business information – held within internal IT systems, databases, third-party systems and the general corporate knowledge base – and using that information to increase efficiency, improve decision-making and cut costs.

Business intelligence technologies are the software and solutions that help companies to achieve their BI goals. They can be utilised across the organisation, or within specific processes or units. The main job of such software is to integrate into systems, pull data out and provide tools for cutting the data in the specific ways desired by the user. They offer historic analysis, current and future predictions of business processes, business performance management and improvement, benchmarking and predictive analytics.

As such, BI can be a valuable tool for treasurers in their unending quest to improve forecasting, better manage cash, and work on best practice across the range of services and processes managed by treasury.

For example, BI technology can mine ERP and bank system data to provide timely information for better cash forecasting and cash management. It can provide information for decision-making on foreign exchange management and hedging management. It can also help to create a picture of global risk and help in operational risk management.

Available solutions

BI solutions range from deeply integrated offerings that are highly tied into the ERP and other systems, to very thin architecture and software as a service (SaaS) solutions that require little in the way of integration in order to function.

The cost and time involved in implementing solutions can also vary greatly, and what types of services a company chooses depend entirely on their structure, their existing systems and their goals.

BI service providers

The split in BI service providers comes between those systems offered by ERP providers and those provided by independent companies. Both Oracle and SAP, for example, have recently acquired BI solutions that they are working on to build interest among their existing client base. Oracle recently acquired Hyperion and SAP has built up its BI offering with the purchase of Business Objects.

Other big-name software providers including Microsoft and IBM also have BI offerings that they are keen to build up a client base for. The advantage of choosing your ERP provider for the BI solution is the ease of integration and the ability to negotiate a deal based on the existing relationship. Particularly now, with new solutions on offer, the big ERP providers are eager to make a name for themselves and may be open to negotiation.

There are of course drawbacks to choosing a big-name ERP provider. These include:

  • Being left with little flexibility to pick and choose the pieces that best suit your BI goals.

  • An increased dependence on that one vendor.

Independent choice

Even after the latest round of consolidation and acquisition, there are still a number of independent vendors in the BI space – such as Actuate, Information Builders, MicroStrategy, Panorama, QlikTech and SAS Institute – offering a range of solutions tailored to specific processes and systems. The solutions offered by the independents tend to require less integration to accomplish their goals; they often use very thin architecture or are offered as a service.

One of the big advantages of going independent is that you can select the services and solutions that fit best with what you are trying to accomplish. You also have the freedom and flexibility to work on small BI projects as and when you have the resources, without the need to jump in with a big investment on a major BI integration.

Is BI right for your business?

Given the current economic climate, IT spend tends to be one of the first things cut from the treasury budget. However, that does not mean that all BI projects must come to a halt. There are other options to consider, such as:

  • Looking at existing systems and trying to take advantage of the BI software that is already part of current software licenses with no additional fee for use.

  • Investigating whether it may be possible to do the same thing without the expensive software. This means being aware of the solutions you already use and how data is handled within those to determine if your BI goals can be accomplished without new investment.

Conclusion

The most important thing to remember in looking at performance management or business intelligence strategies is that it is not a particular solution, but a set of tools and technology solutions that work together to help address a problem or improve decision-making about a particular business process. It is the business value added, not the particular technology or the data that it generates that make BI what it is.

Any tool that aids in creating revenue and cost savings for a company, aids in business intelligence and performance management. However any such tool also requires process analysis, data interpretation and ultimately decision-making based on that interpretation. All of that together equals business intelligence.

We would like to acknowledge the assistance of technology and market research firm Forrester Research in the preparation of this article.

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