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24 May 2011

Make your decisions. Confidently.

By Sören Moorahrend

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S ören Moorahrend from Qurius Advanced Solutions explains how business intelligence can be used to navigate through challenging economic times.


In these challenging economic times and with a high degree of uncertainty in the markets, how can Business Intelligence (BI) help organisations to improve or even grow?

Sören Moorahrend. Economic headwinds pose risks to most organisations. However, it is commonly known that they also give rise to opportunities. Of course, such opportunities are rare and are not easy to identify. Only those parties in the market who are able to discover them can take advantage of difficult times. BI is a way to discover opportunities.

Since the use of BI is already quite widespread in organisations, most companies should be able to tackle any crisis. Obviously that is not the case, so what are they doing wrong?

SM. Many people understand BI as a technical subject; a data warehouse, perhaps some cubes as well and a nice front-end - and that's it. But that's not what we mean by BI. At Qurius, we define BI as an integral part of corporate business management. It has to be integrated into the general management processes in a mandatory way from a management perspective and should not be seen as just another IT tool.

How can you integrate BI into the management processes and how does that create opportunities for companies?

SM. As the biggest Microsoft System integrator in Europe, Qurius has immense know-how in integrating content into the software suites for daily use. However, this is just a technical prerequisite. From a management perspective, it is important to ensure that key performance indicators (KPIs) are binding. They have to be connected to strategic action plans. So if critical values are reached, management should define measures and optimization actions, another critical factor of good risk management.

Coming back to the second part of my previous question: how does that help organisations to create opportunities and strengthen their companies?

SM. To create true opportunities, it is crucial for planning functionalities to be integrated into the BI Solution. Excellent planning is inevitably a necessity for management by exception in any case, as was mentioned above. In general, adding planning and forecasting functionalities to a BI system is the biggest quick-win possible.

The 'intelligence' about the structure of the business contained inside the historical data is a big benefit for any planning process. It can easily be utilised in predictive analytics to generate potential future developments. This increases the accuracy of the plan, reduces the effort required to create it and streamlines the planning process itself by means of workflow functionalities. The positive effect on the planning process is immense, especially in complex distributed planning environments.

Does that mean that a simple plan can prevent companies from struggling in tough times? Isn't it more complicated than that?

SM. Yes, that's right; it's the first step towards a better understanding of future potential. What needs to be added is external market data to broaden the internal perspective. This information can be used to create different future scenarios. Monitoring daily results against those scenarios helps to identify critical developments early enough to respond.

The most popular example of this is Royal Dutch Shell. By starting to work with scenarios in 1971, Shell managed to avoid the worst shocks of the oil crisis, and it actually emerged as the strongest player in the field. This is a good example of how to take advantage of any crisis.

Shell is a familiar example of how to use scenarios, but how is this linked to BI? Furthermore, the scenario approach is usually very complex. How can it benefit smaller organisations?

SM. In the past this task was indeed complex and time-consuming. But today, we have the right performance BI tools available to make this process much simpler. Consequently, it is now possible to integrate long-term strategic perspectives into your BI solution. By doing so, you can create sustainable success: a healthy, profitable company that can respond quickly to changing market conditions.

Biography

Sören Moorahrend is a member of the Management Board of Qurius Advanced Solutions AG, based in Hamburg, Germany. He has over 10 years of experience of business intelligence, focusing in particular on the implementation of complex planning and forecasting systems.


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Disclaimer: All comments posted in a personal capacity