Industry Specific BI - What's the common denominator?
My previous post on business process fundamentals concluded with a friendly exhortation to BI practitioners inciting them to view their craft from the point of optimizing business process.
So the next time you are involved in any BI endeavor, please ask this question to yourself and the people involved in the project – “So which business process is this BI project supposed to optimize, why and how?” I define ‘Optimization’ loosely as anything that leads to bottom-line or top-line benefits.
Business processes by its very definition belong to the industry domain. Companies have their own business processes – some of them are standard across firms in that particular domain and many of them are unique to specific companies. Efficiency of business processes is a source of competitive advantage and the fact that ERP vendors like SAP has special configurations for every industry illustrates this point. So by corollary, for BI to be effective in optimizing business processes, it has to be tied to specific industry needs creating what can be called as “Verticalized Business Intelligence”. (V-BI in short)
At Hexaware’s Business Intelligence & Analytics practice (the company and team that I belong to), we have taken the concept of V-BI pretty seriously and have built solutions aimed at industry verticals. You can view our vertical specific BI offering at this link and we definitely welcome your comments on that.
Though Verticalized BI is a powerful idea, companies typically need an “analytics anchor point” to establish a BI infrastructure before embarking on their domain specific BI initiatives. The analytics anchor point, mentioned above, should have the following characteristics:
- All organizations across domains should have the necessity to implement it
- Business process associated with these analytics needs to be fairly standardized and should be handled by experts
- Should involve some of the most critical stakeholders within the organization as the success of this first initiative will lay the foundation for future work
Based on my experience in providing consulting services for organizations in laying down an Enterprise BI roadmap, I feel that “Financial Analytics” has all the right characteristics to become the analytics anchor point for companies. Financial Analytics, the common denominator, typically comprises of:
- General Ledger Analysis – (also known as Financial Statements Analysis)
- Profitability Analysis (Customer / Product Profitability etc.)
- Budgeting, Planning & Forecasting
- Monitoring & Controlling – The Dashboards & Scorecards
- General Ledger Consolidation
The above mentioned areas are also classified as Enterprise Performance Management. The convergence of Performance Management and BI is another interesting topic (recent announcements of Microsoft have made this subject doubly interesting!) and I will write about it in my future posts.
In my humble opinion, the prescription for Enterprise BI is:
- Select one or more areas of Financial Analytics (as mentioned above) as your first target for Enterprise BI.
- During the process of completing step 1, establish the technology and process infrastructure for BI in the organization
- Add your industry specific BI initiatives (Verticalized Business Intelligence) as you move up the curve
I, for one, truly believe in the power of Verticalized BI to develop solutions that provide the best fit between business and technology. That business and IT people can sit across the table and look at each other with mutual respect is another important non-trivial benefit.
Thanks for reading. Do you have any other analytics anchor points for organizations to jumpstart their BI initiatives? Please do share your thoughts.