Real-world business intelligence

Three companies show what BI does for them

Published: 5 June 2009 13:21 GMT by Andrew Donoghue

Tags: business intelligence, sas, bt

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How can business intelligence help your organisation? Andrew Donoghue speaks to three very different businesses to see what BI does for them.

While issues such as return on investment (ROI) and total cost of ownership (TCO) always figure highly in the negotiations around any new IT implementation, tough economic conditions mean those three letter acronyms are even more pertinent than ever.

This is especially true of business intelligence which, though it promises to help businesses analyse data in order to make decisions, even in the best of times is still regarded as somewhat of a 'black art' by those outside the core of IT professionals that specialise in the area.

To cast some light on BI and how it can help organisations in both good and bad times, silicon.com spoke to three businesses to find out what they use it for - and what they get out of it.

Bradford & Bingley
Like so many financial services companies, UK building society Bradford & Bingley has been making headlines recently. One of the victims of the banking crisis, B&B was effectively part-nationalised in September last year (it is now jointly owned by the UK government and Spanish group Santander.)

B&B's management information manager, Paul Thomas, is in charge of the company's BI infrastructure - mostly based around tools from US business software maker SAS.

Specifically, the company uses SAS's Banking Intelligence system - BI developed for financial services organisations - which includes data extraction tools, web portal software and plug-ins to Microsoft Office.

Thomas says BI and the wider issue of information management is seen as a key function at B&B, with around 60 personnel given access to the BI applications. "We did a study before [we were nationalised] which said that around one in 10 people were involved in management information. It might be lower than that now though, as we have done a lot of consolidation. But it's still a significant investment on the part of the company," he says.

B&B uses its BI systems for a variety of information management tasks ranging from calculating risks on mortgage lending to providing regulatory reporting to authorities such as the FSA and the Bank of England. "About a third of what we do is regulator stuff. The majority of what we do is the business coming to us and saying, 'I have wondered about this, can you give me a report that shows X,Y and Z?'" explains Thomas.

The most obvious question for anyone dealing with BI in a bank at the moment is why the software didn't allow lenders to identify the risky lending which precipitated much of the banking crisis. Was it that the right questions weren't being asked? "There was a bit of that, yes," he says. "The questions were beginning to be asked but I think the speed of events took everyone by surprise."

The result of those events of course is that B&B has new owners - one of which, the UK government, doesn't want a repeat of the banking crisis and is moving to tighten up regulations for financial services companies.

"The government is getting more aggressive about asking this bank, and the banks that I have spoken to in the industry, to be on top of their information," says Thomas.

This increased focused on compliance and risk avoidance has meant more pressure on the information managers and BI systems, according to Thomas. "Expectations are rising and it's a bit of a poison chalice almost, in that the more you do, the more people want. It can snowball which is when you have to start saying 'No I can't do that, I have other priorities'," he says. "But that is almost more about people and politics management than anything else."

Though Thomas admits B&B's BI investment has been significant, he said it's difficult to calculate what their ROI would be. "[The benefits are] very intangible. I have often been asked by SAS if there is any way I could show return on investment for the software that we have and it's incredibly difficult," says Thomas.

"The quick answer is that if we couldn't produce some of the figures that we needed to produce, we would get shut down. And that still applies now - if you can't send back what the Bank of England needs to know then that is quite a big deal. And that is what this software enables us to do."

BT
Telecoms and IT services specialist BT uses software from business intelligence and data warehousing provider Kognitio to manage customer information and queries such as formulating pricing plans for individual firms.

Arthur Winn, head of pricing at BT, says his department's BI tools allow it to accurately model products - with accuracy margins of two per cent - so that customers get the pricing they require but BT still makes the margins it needs. "Retaining customers and keeping them happy involves giving customers the best value plans. BI allows us to predict the effects of pricing and charges down to the last penny," he says.

The sophisticated data analysis provided by BI tools has allowed BT to develop products and services such as free intra-business calling through its BT business-specific One Plan Plus call plan.

Winn says that, thanks to BI, his team can model any scenario and be confident that it understands the margins of any plan down to the last penny. "We can outline to individual customers how we can save them money and we can ensure that we are able to offer the best value packages. This has become even more important in current economic conditions," says Winn.

BI also helps BT to make the best decisions by allowing data to be analysed on a scale that would not be possible with spreadsheets or other applications. "Business intelligence in our view is a way to make better decisions. When we have a huge mound of data to sift through, containing the details of more than one million customers. It's not enough to guess at how one section of the database represents the whole," says Winn.

"BI allows us to spot the trends in data and investigate them thoroughly, so we receive full insight into what our customers are doing and what they want, and we can plan and act on that information in full confidence that our plans are based on facts instead of guesswork."

EnergySys
EnergySys is a UK-based software company that provides hosted applications to help energy companies such as BP and Haliburton track the transport and production of oil and gas.

EnergySys's main product - EnergySys 4.0 - includes open source software from open source BI specialist Jaspersoft to allow the energy providers to create quick and detailed online reports about their production capabilities. EnergySys also uses the Jaspersoft internally to manage its own business.

Dr Peter S Black, managing director of EnergySys, says BI allows his company and its customers to react quickly to changes in the energy market and rapidly create sophisticated reports. Previously, managing the production of oil and gas meant using complex, in-house software or manual spreadsheets which were difficult to maintain and slow to update.

Using BI tools, EnergySys is able to ask complex questions about large data sets and gets answers quickly enough to respond to a rapidly changing market. "Right now, I want the answers to questions like, 'Who are our most profitable customers?' and 'Where sales channel generates the majority of our business?'," says Black. "In each case, if I have a small enough sample size I can perhaps analyse the data in a fairly ad hoc and manual fashion. But what happens if I have a large data set and I'm asking many different questions of it? Assuming I have the data, and the right BI tools, I can answer that question almost as quickly as I can ask it."

But despite the promise Black claims that BI tools won't do anything for a business that doesn't know what it wants to find out. "There is a flaw in the sales process for most BI tools, in that they are sold as technologies with pretty graphics and an unlimited promise that anything is possible," says Black. "No company should ever be sold a BI system, unless they understand why they need one."