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The Big Squeeze: How Business Analytics Can Help You Extract Every Ounce of Value from Your Business Information

by Steve Lucas | SAPinsider

October 1, 2011

SAP has slowly and steadily been transforming itself. Its product portfolio is no longer solely centered on SAP Business Suite; it now shares the spotlight with a newer class of solutions known as business analytics. But what, exactly, are "business analytics" solutions? What's driving their high demand? In this interview, you'll learn the answers to these questions and more from Steve Lucas, Head of the Business Analytics Organization at SAP.
 

Q: What, exactly, are “business analytics” solutions? 

A: Readers of this publication are certainly familiar with the applications of SAP Business Suite. Financials, HCM, SCM, CRM, and so forth are their “systems of record” where they house their most prized and cherished corporate information. Business analytics solutions are the applications that unleash the value of that information. Such solutions mean that you not only have a place to put your business information, but also a way to actively engage with it and extract every ounce of value therein. That’s what business analytics are all about.

Business analytics are your “systems of engagement,” because they are precisely that: engaging. They’re very visual. They’re intuitive. And they are highly interactive.1 With business analytics, doing a search across massive amounts of business data is akin to the way we use Google in our personal lives. If you’re forecasting or modeling supply or inventory scenarios, the experience is as simple as toggling through various options until you achieve the outcome you desire. Want to query a system or test some financial or risk hypotheses? With business analytics solutions, you don’t have to go through a programmer, who first cordons off data sets for you and then iteratively and laboriously builds custom reports. You can query on the fly. No technical intermediary is needed. 

Business analytics enable your finance, sales, planning, logistics, manufacturing, HR, and other business professionals to wring every drop of insight and productivity out of your data to help them realize better performance. It’s a big deal for our customers. It’s a big deal for SAP. And it’s a big deal for the industry at large. This transformation was ignited when we acquired Business Objects and, in just three years, we’ve gone from 99.9% of our business being about systems of record to nearly half of our business centering around systems of engagement.

Q: From zero to nearly half of SAP sales in just three years is a meteoric ascent. What’s driving this demand?

A: I have yet to meet a customer who says, “You know, everything is great and I’m good with staying the same.” Invariably, every company wants to move faster, be more efficient, more reactive, and more nimble, and be the first to execute the next big breakthrough. Speed matters. Business analytics are the means by which companies can quickly take stock of what’s going on, make sense of it, and act. Think about the pace of change we are all experiencing, and how it affects the way companies behave:

  • Just six short years ago, major social media outlets didn’t exist. If a manufacturer woke up one Monday morning to find an article had hit the press over the weekend, exposing the existence of a harmful chemical in the composition of its baby bottles, it would take weeks to formulate a resolution and determine the financial impact. Today, that same exposé hits the Internet and quickly goes viral. The manufacturer needs to be able to quickly find out what’s being bandied about on Facebook and Twitter by its buying public; it also can no longer afford to wait weeks to execute a risk mitigation strategy, let alone wait for an initial report that affords the company enough insight to start planning that strategy. 
  • The need for speed hits home with me every time I’m about to meet with a customer. When I approach these meetings (hundreds per year), I want up-to-the-minute information about tech support calls the customers made and any questions and concerns they may have voiced. And I don’t want to call IT and have them email me a report. I want this information in real time. 
  • Consider the sales process at every level. More and more of our retail customers are culling and analyzing point-of-sales data on the fly. Doing so allows them to react quickly to changes in demand, promote products as they become virally popular, or react to product recalls. They are also employing real-time fraud analytics.
  • Companies that focus on logistics and the supply chain are now able to nimbly visualize shipments, change routing plans, update customer expectations, or find alternative suppliers.
  • Organizations focusing on improving profitability by monitoring individual SKUs, departments, facilities, or employees can now leverage the phenomenal speed of in-memory analytics to instantly remodel data to account for planned strategic changes in the organizational structure (like acquisitions and divestitures, for example) — a process that previously might have taken days.
  • Healthcare customers — tens of thousands of them — are using SAP’s BI solutions to become more effective at saving lives. Some are now better at predicting disease outbreak than the Centers for Disease Control (CDC) and are the first to route flu shots and medication to locations around the globe. That doesn’t just make a company money. It saves lives.
  • It’s worth noting that government agencies are also leveraging business analytics. Recovery.gov is a great example. This site (www.recovery.gov/Transparency/Pages/DataExplorerLanding.aspx) uses SAP BusinessObjects Explorer to show where our taxpayer dollars are being spent. It offers transparency into the distribution of trillions of dollars. This is the first time I can remember the government being fully transparent in this way.

It used to be that scale and efficiency defined the competitive battleground. Today, given the pace of change, communications, and disruptive technologies, being smart and nimble is the name of the game. I can guarantee readers that their counterparts are hyper-focused on moving their entire orb and reaction speeds more quickly, because the speed of analysis and the ability to hone business processes accordingly have become critical differentiators. We are seeing this in every industry we serve. 

Q: What about cost? How do you strike a realistic balance between the benefits and cost of processing so much information?

A: We’ve rendered this a moot point with in-memory technology. There is no trade-off. The kinds of things our customers are now doing used to require huge and expensive server farms. But, with SAP HANA, our in-memory computing technology, we’ve brought that down to a single server blade capability. With SAP HANA, companies can expect business analytics at Google-like speed. You can analyze huge volumes of data in an instant, and you can do it within the context of the business applications you use.

We’re seeing interest in our in-memory technology go through the roof right now because it’s enabling companies to do things that were unimaginable even just a few years ago. SAP’s in-memory technology is a game changer. It’s an exciting departure from the relational database model. We looked at the relational database architecture that has, for 30 years, supported SAP applications the world over and said, “This is not good enough.” We cannot keep incrementally improving something that’s been around this long. We need to take a new leap.

That is what SAP HANA represents. It is a new leap — not just in terms of speed, but in its model, architecture, concept, and performance. SAP HANA is the reason our customers can achieve previously unimaginable things. I have trouble thinking of an application that couldn’t benefit from performing better, faster, and at a lower cost.

SAP is also building in-memory applications across strategic workforce planning, sales and operations planning, and cost and profitability analysis. The actual applications themselves will be in-memory based and take advantage of SAP HANA in such a way that not only will they be able to analyze and store data faster, but the entire application will be completely optimized for this new architecture.

SAP HANA is ushering in a new wave. We’re certainly not stopping our innovation with the database itself. We’re going straight into the beating heart of SAP with our applications, and we’re going to be delivering those along with in-memory technology as well.

Q: Is there a prescription for succeeding with business analytics?

A: With business analytics (see Figure 1) success comes down to a handful of activities for managing and maximizing your information.

  1. The promises of business analytics are predicated on the idea that your data is accurate. So the very first thing that we recommend companies do is identify, clean up, and organize their information — every bit of it, SAP and non-SAP alike. This is what our enterprise information management (EIM) solutions are all about. 
  2. After you find, clean up, and organize your information, you can leverage it using business intelligence (BI) solutions to gain a complete picture of your business. It can be in the form of reports, analyses, dashboards, or visualizations, but at its core, BI is about finding opportunities and supporting your decisions (strategic or operational) with facts.
  3. Move one layer up and you have specialized vertical content — analytic applications — that allow you to find the good and the bad more quickly within the context of your specific industry or area of expertise. We have analytics applications specifically built for healthcare, banking, finance, retail, manufacturing, and so on, which accelerate the journey of making better business decisions.
  4. Enterprise performance management solutions help your entire company identify and make changes, both small and large, that ensure ongoing success.
  5. GRC solutions help you stay on track in a highly regulated environment.
  6. Last, but not least, is data warehousing, which helps optimize burgeoning data volumes. So many of us are grappling with massive volumes of data, across which we’re trying to do complex analysis — this can take hours, days, or even weeks. SAP HANA literally reduces the analysis timeline to mere seconds.
Figure 1 Business analytics solutions from SAP enable companies to quickly access and unleash the value of business information

Q: What’s the next big thing?

A: In-memory technology coupled with next-generation mobile BI solutions is, without question, the next big thing that will change the way we conduct our day-to-day business. Being able to get at all the information you need in real time on a mobile device is positively transformative.

People are putting down their laptops, walking away from their desktops, and relying more and more on mobile devices. There’s a great migration to iPads, iPods, BlackBerry Playbooks, Galaxy devices, Android devices, and so on. With SAP’s acquisition of Sybase, we’ve enabled engagement with business analytics (and also systems of record) via mobile devices.

What does this mean to our customers? You have these unbelievably functional mobile apps, which in many respects are superior to what you have on your laptop or desktop, fully integrated with your business processes and analytics. Managers can make approvals, planners can look at inventory, sales executives can analyze pipelines, and so on.

SAP is unique in its ability to put answers to complex questions into the hands of mobile users instantaneously. The combination of business analytics, SAP HANA, and new mobile capabilities has become the new “killer app.”

Never underestimate the power of your business accelerating and moving faster than your competition.

Steve Lucas
General Manager
SAP Business Analytics and Technology
SAP

1 Learn more about systems of engagement in Stephanie Buscemi’s article, “Beyond Systems of Record to Systems of Engagement“ in this October-December 2011 issue of SAPinsider. [back]

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