Intelligent Enterprise

Companies are trying to improve efficiencies and performance of many day-to-day and real-time activities, such as customer interactions, finance and accounting processes, and activities involving transportation/shipping, sales, manufacturing, inventory management and marketing. Aberdeen research conducted for Smart Decisions: The Role of Key Performance Indicators , published in September 2007, found that Best-in-Class companies are improving their time-to-decision through capabilities, technologies and services that enable faster delivery of mission-critical information to the people who need it, when they need it and how they need it.

This article, which is excerpted from AberdeenGroup's in-depth "Operational BI" report published in December 2007, describes the current and planned initiatives that best-in-class companies are undertaking to improve operational efficiencies and timeliness of actions.

THE 'FLAVORS' OF OPERATIONAL BI

The term "operational BI" has been identified with several terms within various industry and market vernaculars, including "transactional BI, real-time analytics, near-real-time analytics, operational reporting, business activity monitoring" and "decision management." Some of the terms have been coined to differentiate between the timeframes within which data collection, reporting, and analysis occur. Other terms describe differences in the methods and calculations that take place as data is captured, manipulated, and delivered (as detailed in the "Flavors of Operational BI" table at right).

Flavors of Operational BI Click Image to Enlarge

No matter what flavor or definition is used, at the heart of the matter, organizations are beginning to focus their attention on leveraging existing data to enable and optimize daily, hourly, minute-to-minute, or even up-to-the-second actions. While traditional business intelligence solutions continue to address the strategic information needs of decision makers with analysis of historical data, organizations are starting to realize the potential of applying BI technology and approaches to more immediate information. Several new vendors and solutions are marketed and targeted at operational requirements, and are focused on real-time and near-real-time data sources.

Key benefits to end users include the opportunities to:

Manage business activities as they occur, as opposed to waiting for the end of a day, week, or month before gaining access to analytical data and information;

Improve customer relations by responding to their needs more rapidly, and heading off harmful events before the customer is aware, or possibly before they happen;

Increase business efficiency by providing actionable information to line-level knowledge workers in real-time, and automating manual processes to reduce costly, repetitive report creation tasks.

Time to Decision Click Image to Enlarge

Best-in-Class organizations — the companies achieving the highest performance based on survey metrics — have shown that "time-to-decision" (the interval between business activity and action taken) is a key performance metric driving success with operational performance improvement initiatives (see "Companies Experiencing Improvement in Time-to-Decision" chart at right).

Aberdeen's research included additional granularity about the degree to which organizations have achieved improvement in time-to-decision. While most companies have not achieved second-to-second timeframes, Best-in-Class companies have improved their time-to-decision from days-to-hours and from hours-to-minutes.