Business intelligence set to be the next big supply chain enabler – again?

BI leader Cognos insists that it’s being asked for templated solutions with implementation services. “We’re seeing a growing demand for pre-built solutions,” says Paul Hoy, Cognos the manufacturing industry director. “It’s not a defensive posture at all: it’s a case of recognising that’s how the market wants to buy BI applications.” He sees ongoing moves from Microsoft to provide considerable low cost BI functionality within its SQL Server stack as “not that dramatic”, and “only causing people at the low end to look at things based on price performance.” Says Hoy: “You can’t ignore Microsoft but we have a strong history of delivering in-depth BI. We now have performance blueprints like, for example, sales and operations planning. We’ve invested heavily in that as the next evolution because manufacturers do not have an appetite to keep re-inventing their analyses and metrics.” For him, that’s being driven by what he sees as “the biggest trend right now in BI” – an evolution from pure BI tools associated with reporting and finance to business-wide performance analysis and management. “Users want to address three key questions. First, how am I doing against my KPIs in the various functional areas of operations like sales and marketing, but also production management, supply chain management and new product introduction? “Second, how am I going to get the integration points so I can drill down and find out why my business-wide KPIs aren’t being met. Is it logistics? Is it production? If it’s production, what exactly? Maybe it’s a factor in their German plant, but which product line, or machine cell or component supplier? It’s usually very difficult to get to the causal factors behind they symptoms. “And the third piece is, now that I know what is wrong and why – what should I do about it?” Which extends users’ BI requirements into modelling and simulation with ‘what if’ technology to enable computer-assisted planning. Received wisdom in the UK is that this is a largely future development, but Hoy insists that’s not the case. “We’re seeing a faster adoption than you might think, especially in the States but also in Europe. Manufacturers are realising that they’re not getting ‘actionable information’ from their ERP systems.” He concedes that relatively few companies in the UK are thinking this way yet, but points to specific developments where it’s proving to be a competitive enabler. “The majority of my work is helping companies to differentiate themselves through their supply chains by getting visibility. They have had to automate their supply chains and now the challenge is how to get information, analytics and decision support out of that.” Which markets are leading? “It tends to be in industries like electronics, where lifecycles are short and products change so quickly so they need to accelerate their understanding of what’s happening. But it’s also in industries that are less commoditised – like discrete heavy manufacturing – because of their extended supply chains into Asia etc, the complexity of their processes and the number of steps and interdependencies with suppliers.” And as for the investment required to get to this level of BI: “The software investment is not a significant part – it’s just user licensing. The real investment is review management cycle of process,” says Hoy. “It’s orders of magnitude less that doing an ERP implementation in terms of the software and implementation requirements.”