Monday January 25, 2010
Benefits of efficient data collection system
By DALJIT DHESI
It can help firms make informed decisions to improve margins
PETALING JAYA: Ineffective critical decisions made by business leaders in the Asia-Pacific have affected the margins of companies and their ability to compete.
Industry observers say this is partly due to the unavailability or lack of appropriate data collection systems to facilitate an efficient decision-making process.
IBM Malaysia country manager for software group, Vincent Ler, said in an interview that in the Asia-Pacific, studies by IBM showed businesses frequently made critical decisions without the necessary information, with one of three decisions often made without relevant information.
He pointed out that an efficient data collection system would enable corporates and small and medium-scale enterprises to make informed decisions that could improve their margins and put them on a stronger footing in local and overseas markets.
Ler said organisations that had reliable data collection system would also have a significant headstart over their competitors in terms of revenue generation and cost savings amid the economic recovery.
Recent studies by IBM have shown that top-performing companies are 15 times more likely to apply business intelligence and analytics when making strategic decisions compared with their under-performing peers, according to Ler.
Studies had shown that information-based decision-making had been successful in formulating effective business strategies in the current economic cycle, he said.
Business intelligence systems refer to solutions that play a key role in the strategic planning process of a company. These systems allow the company to gather, store, access and analyse corporate data to aid decision-making.
Business analytics, on the other hand, refers to the methodology employed by an organisation to enhance its business and make optimal decisions by the use of statistical techniques, such as collecting and analysing data.
Traditional business decision-making, Ler said, was being challenged by the growing volume of business data as there were simply too much data being collected from multiple sources and in multiple formats.
In this regard, business intelligence and analytics would be an area that companies should strongly focus on to leverage their decision-making process, he said.
Stressing on the importance of data collection, SAS Malaysia head of technology practice Allan Tham said: “About 95% of our experience shows that effective data collection, complete data integration and high data quality are the three primary challenges in any business intelligence endeavour – ranging from the want to produce simple reports, right up to applying advanced analytics (such as predictive modelling and demand forecasting) in the business.”
He noted that “in collecting data, data integrity and quality are by far the most vital in any businesses.”
“It should be viewed as the first step for all companies to embark on. Without quality data, businesses will be making decisions based on inaccurate and incomplete data,” he added.
Tham reckons that high-quality data are the precursor for users to generate more revenues and reduce costs.
SAS Malaysia is a subsidiary of US-based SAS Institute Inc, a software company that offers a range of business intelligence services.
Epicor vice-president (sales) for Asia, Bryan Tan, said many decision-makers and information workers during the recent downturn felt the pain of insufficient, inaccurate or contradictory information as they tried hard to stay competitive and grow their businesses.
He attributed this to the inefficient collection, processing and dissemination of data.
“Today, we see growing demand from companies, including SMEs, for real-time collaboration throughout the organisation, and improved interaction across often globally distributed locations.
“This has been cited as one of the top reasons for increasing business intelligence adoption in the Asia-Pacific ex-Japan, according to a report by IDC last year, as more business users are seeking better information and intelligence,’’ Tan noted.
For IBM, Ler said business intelligence and analytics were now the main areas of focus and would be the big contributors to its revenue going forward.
IBM, at the global level, acquired last year five companies in the business intelligence and analytics space, bringing its total acquisitions to 28 with investments of close to US$12bil to date.