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'Operational' BI Enters The Midmarket

Among medium-sized companies, business intelligence was once a domain exclusive to the executive class. Now midmarket firms of all stripes are pushing BI tools out to employees on the front line of operations to reinvigorate processes and increase efficiency.
For many smaller companies, however, gaining sponsorship from managers to build out an operational BI system can be a problem. Costs can be prohibitive. Guy Weismantel of Business Objects says that after showing product demos, which exhibit each and every bell and whistle that a tool provides, some potential customers "immediately think that it costs a lot." Weismental says he's gotten around that by urging smaller companies to look at less-costly reporting options -- Crystal Reports in the case of Business Objects -- and to start out small, with perhaps five end-user licenses. Pricing options for entry-level packages can start as low as $7500 for five licenses.

Still, smaller organizations face other costs associated with operational BI initiatives. Before implementing BI, experts advocate the necessity of building a centralized IT footprint, much like EMA did when it consolidated its data warehouses. Often, however, smaller companies suffer from what Wayne Eckerson calls "spreadmart," or what others have described as "access anarchy." Dependent on Excel spreadsheets containing data pulled from various sources, these firms have an incoherent informational back end. There's too much data coming from too many different places and being presented in too many different formats. Despite the recent Smart Tech offerings from Microsoft, which allow its spreadsheets to pull data from sources a bit more easily, "People are abusing Excel and all the applications in it," Eckerson says. "It doesn't scale, it's brittle, and it's not cost-friendly."

And yet many end-users prefer Excel, or are too accustomed to it to want to change. This sometimes gives decision-makers pause when looking to purchase BI apps. Frost Bank, San Antonio, a regional holding company with about $10 billion in assets and 3,400 employees, faced a few such cultural issues when it started an operational BI project in 2001 using a package of applications from Cognos. "There's so much to do, and only so many resources," says Louis Barton, data manager at Frost. "Sometimes it's not just the tools. It's the culture. It's hard to effect change when there are a lot of other initiatives in the company. It's hard to get things going from day one."

Advocacy from executive sponsors eventually came to Barton, whose data warehousing and BI group is part of an interesting chain-of-command. Instead of reporting to IT, Barton and his colleagues report to Frost's chief financial officer. (Indeed, among the benefits that the bank has enjoyed following the BI release have been reduced overhead and improved control over budgeting.) During networking meetings and conventions, Barton saw that peer institutions had begun using operational BI, and he brought those ideas home. Before proceeding with the deployment, Frost got its footprint together, creating a single data warehouse, which was "signed off by accounting," Barton says, ensuring that everyone in the company would be drawing information from the same audited and approved data source.

The bank now has 300 licenses, with the ability to push reports to another 200 non-users. The first roll-out of BI apps at the bank targeted its brokerage unit -- a sector that in many ways has pioneered the use of operational BI. Frost's brokers use ReportNet, Cognos' Web-based reporting tool, along with a visualizer that displays key metrics such as trade revenue, commission revenue, compliance reports and other figures. The bank has since deployed operational BI in its most important departments, including e-commerce, retail banking, commercial banking and general ledger.

Across the company, however, the spreadsheet remains ubiquitous. "We still see a lot of Excel. But we're doing the more important analytic things in OLAP Powerplay," Barton says, referring to Cognos' high-end analytics tool. "We've worked with a lot of folks to change some of their dependence on Excel. But believe it or not, people still want to analyze a spreadsheet."