German sugar and packaged food producer Sudzucker AG learned all about intense market upheaval long before the recession hit. In late 2005, after nearly four decades of protective regulations, the EU opened Europe’s borders to outside suppliers.
Suddenly, Sudzucker had to think hard about how to operate efficiently in a markedly more competitive environment. One technology it examined: business intelligence, or the practice of extracting nuggets of valuable knowledge about operations that otherwise remain hidden away in the morass of disparate systems, databases, and processes.
Sudzucker’s “sugar conversion” group, which packages and transports bulk, boxed, and bagged finished product, tapped CDC Software’s Factory, which went live at the company’s Plattling, Germany, operations last fall and which Sudzucker plans to activate in June in Tienen, Belgium, and later in Roye, France. Everyone, from the corporate chief of sugar packaging and transport, Peter Koopmans, to country bosses, to plant managers will use it help them clearly see where there are trouble areas and bright spots, and what to do about them — whether to stop production, shift it, or make other sorts of changes.
“It gives us information to help us run our business properly,” says Johan Savonet, head of the €5.8 billion company’s Belgian sugar packaging and transporting operations. The company is targeting a 10% efficiency improvement with the CDC software.
Sudzucker is just one of thousands of manufacturers that, pressured by recessionary forces and challenged to manage information that is increasingly spread around the world in global operations and supply chains, are looking for sage insights from business intelligence software. Never has the phrase “if only we knew what we know” had more relevance to manufacturers than it does today.
“Even in the current tough economic times, BI initiatives continue to be front and center of most enterprise business and IT agendas,” says Forrester Research analyst Boris Evelson. “In spite of a certain degree of retrenchment in other enterprise software market segments, BI-related activities keep on rising.”
The idea of extracting informed analysis from mountains of data is not new. The apocryphal “data mining” tale about the supermarket that rearranged its layout of beer and diapers to make sure men bought suds when their wives sent them out to buy nappies goes back a decade or two. The drive to do that has continually strengthened and has led large enterprise and database software companies to buy business intelligence specialists in recent years — for example, SAP’s acquisition of Business Objects, Oracle’s of Hyperion, and IBM’s of Cognos.
But what’s changing now is that software companies are increasingly masking the technological underpinnings and interfaces from business users. Instead, vendors are striving to make the products easy to use in a language and format that business executives find relevant. While vendors also continue to enlarge the capacity of data that users can quickly analyze, it is ultimately the usability that will determine whether, say, a managing director can clearly see the meaning of data or whether he or she simply receives another indecipherable IT-style report. Gone are the days of simply crunching data. BI now has to crunch the insights.
That was the theme at SAP’s SAPPHIRE end-user conference in Orlando, FL, last month, when SAP announced a new business intelligence software package called Business Objects Explorer, meant to improve the usability of SAP’s earlier BI software, Business Objects Polestar. SAP also said that Business Objects Explorer will work with the company’s NetWeaver Business Warehouse Accelerator, essentially meaning, according to SAP, that Business Objects Explorer will not only be easy to use, but also work with ever large volumes of data, at blazing speeds.
But in a world forever befuddled by the language of technology, the usability stood out.
"We have traditionally been focused on technology that was targeted at technology experts," Business Objects Chief Executive John Schwarz said in announcing the product. "We need to break out of the high priest of analysis and allow everyone in the organisation, even the CEO, to have the ability to click and search. We need to become more Google-like to give a generic term."
Analysts were impressed. AMR Research analyst Bruce Richardson notes in a research update, “One of the criticisms I had of Polestar and SAP’s Business Intelligence Accelerator was that they lacked applications or templates. Okay, so I can load a billion records, but what can I do with it?” In a follow-up interview, AMR analyst John Hagerty finishes the thought, saying, “It allows people to navigate in terms of how they think about the business. It’s based on how you want to look at it as opposed to how somebody in IT wants you look at it — as opposed to having the IT group give you five reports.”
Early adopters at SAPPHIRE also sang Explorer’s praises. An executive from Molson Coors said it took her less than three seconds to search 900 million records, and another executive, from Sara Lee, gave a similar accounting. Neither provided detail on exactly how they’re using it.
The view from the competition was, predictably, a little different. At IBM Cognos in Burlington, MA, Paul Hoy, industrial sector executive for business intelligence and performance management, says that Cognos pioneered usability in 2007 with its ReportNet product, which represented an overhaul of its BI offerings with the addition of browser, dashboards, and other features.
“Cognos is approximately two years ahead of where their portfolio is,” Hoy says, of SAP. “In some respects, what SAP is announcing now is old news. It’s catching up to what Cognos has been offering — integrated performance management.”
Whether it’s IBM, SAP, CDC, or another brand, the idea is to help manufacturing executives get the information that’s relevant to them — a sales executive will extract different data than will an operations executive — and to act on it.
At Sudzucker, Savonet and Koopmans are using CDC Factory to help them make a variety of critical business decisions, such as which lines and plants to rely on.
Semantically, some industry watchers would categorize CDC Factory as manufacturing operations software. But Savonet counts it squarely in the business intelligence realm, because it enables executives to do what BI is intended to do: to quickly extract useful insight from voluminous information, and to act on it.
Sudzucker chose CDC, Savonet says, because it allowed for human input. For instance, if the software detects that the company is losing productivity during shift changes, managers from the more efficient shift change locations enter best-practice insights, Savonet says.
Savonet praised the product’s simplicity — something that SAP addressed with Explorer, and which Forrester’s Evelson says is an ongoing issue, along with the high cost of deployment. “The complexity, cost, and effort of large enterprise BI implementations unfortunately do not easily come down,” Evelson says. “As a result, while there are plenty of great examples out there of successful BI implementations, less than stellar BI environments are still quite ubiquitous.”
Evelson further cautions manufacturers to maintain strict deployment procedures and to drive from the top down, but with latitude for altering design for different users. Then, companies like Sudzucker might just stand a chance of sweetening their bottom line.