Business

Saturday November 28, 2009

BI solution an essential tool

By LEE KIAN SEONG


BUSINESS intelligence (BI) solutions may be an essential tool in today’s business world but it is not wisely used by domestic small and medium enterprises (SMEs) who have yet to familiarise themselves as it is generally perceived as an “expensive investment.”

But proponents of the system say it is an efficient tool to improve the performance of business; the applications and technologies are important for gathering, storing, analysing, and providing access to data to help enterprise users make better business decisions.

Its applications include the activities of decision support systems, query and reporting, online analytical processing, statistical analysis, forecasting, and data mining.

The good news is SMI Association of Malaysia information communication technology bureau chairman Lee Hwee Hsiung says the awareness of adopting BI solution in the business is picking up among SMEs locally.

“BI solutions are popular among multinationals or large companies. Some of them even set up a team to concentrate on utilising the BI solution to help companies to better drive sales,” he says.

He says there are a lot of BI solutions that are available in the market but the cost is a burden for SMEs.

Lee points out that SMI Association is promoting BI as one of the important arenas in driving the business among SMEs.

“Information security is also important in protecting the data and information that is being generated,” he adds.

Findings in the Global CIO Study 2009 conducted by IBM Corp revealed that 86% of chief investment officers (CIOs) plan to use BI and analytics, which highlights the importance of information technology (IT), and BI as a catalyst that allows businesses to make better business decisions.

The study covers more than 2,500 CIOs worldwide, including 158 CIOs from mid-size organisations.

From an IT company’s perspective, IBM Malaysia general business general manager Chiam Yat Seng says SMEs realise it is important to adopt IT or BI solution in their business but they lack the right manpower to advise them in this area.

“Quite a number of them have bad experiences as they worked with the wrong persons and this has put them off,” he says based on his interaction with the markets players and associations.

He points out that it is importance to educate the market on what is right about IT and ways to choose a better solution for their businesses.

“IT companies at the same time have to provide an extensive network to reach out to the SMEs and help them get the right technology,” he adds.

SMEs also wish to adopt an easy-to-use solution, which is helpful to conduct businesses.

SMEs are perceived as an important area for a lot of IT companies nowadays. From the local perspective, SMEs in the manufacturing sector maintained high productivity last year, led mainly by the export-oriented industries.

The National SME Development Council is also working with the vision to elevate SMEs to a higher level.

Currently, SMEs employ about 5.6 million people and account for about RM130bil, or 32%, of the country’s gross domestic product (GDP), which is RM400bil last year. It is targeted to reach 57% by 2010.

For the global landscape, SMEs are responsible for 65% of the GDP and will be the engines to lead global economic recovery.

According to SME Annual Report 2008, SMEs are an important source of indigenous growth and will be extremely relevant in the new economic model towards transforming Malaysia from a middle-income to a high-income economy.

Survey findings revealed that Malaysian SMEs took positive steps to mitigate the impact of the economic crisis by changing business strategies such as looking for new markets and improving productivity.

IBM Software Group information on demand vice-president Mark Register says some organisations are operating with blind spots and one third of the business leaders frequently make critical decisions without the information they need as revealed in the Global CIO Study 2009.

“About 53% of the companies don’t have access to the information across their organisations that is needed to do their jobs,” he says.

Meanwhile, IBM Software group analytics and performance management business unit executive for Asean Shantanu Srivastava says a lot of local SMEs will have the perception that this sort of software is only available for big businesses, which in fact, it is not.

“They should turn the information into a value added piece to their business,” he says.

IBM’s Cognos Express, which was just launched this month, is a BI solution that is specially designed for SMEs. It can give a more detailed insight to the companies from the information and data.

The software could help in enabling projects rollout to match resource capacity and budget, realise business benefit quickly, provide justification for further investment and allow adjustments to respond to changes in business objectives,” he says.

This is in line with IBM commitment to deliver solutions that help SMEs gain actionable insights, increase productivity and improve collaboration. The company also offers fund under its IBM Global Finance scheme.

However, Register says the most important thing for SMEs is to take action on adopting BI solution as companies could better leverage on the information and drive value through it.

For a case study, Guinness Anchor Bhd (GAB) has tapped IBM business analytics and performance management technology to significantly improve its decision-making process and business productivity.

With IBM business analytics, the entire budget planning process is now automated, eliminating potential errors arising from manual spreadsheet entries, ensuring that all information is accurate and can be quickly sent to stakeholders across the organisation.

The new analytics system also empowers budget-holders by giving them more control via continuous weekly or monthly reports while enabling scenario planning and what-if analysis of flexible rolling and profit and loss forecasts.

IBM is also helping GAB better track performance against strategic objectives, and guarantees the quality and accuracy of financial numbers for timely and sustainable compliance

In fact, GAB’s management estimates that an additional US$3mil worth of business opportunities could have been realised each year, had decision-making been more efficient.

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