Tony Sarno01 April 2008, 1:00 AM
Microsoft’s PerformancePoint is the first affordable way of introducing the exotic science of business intelligence to your business. But what exactly is business intelligence?
There are many applications beyond the reach of businesses which don’t have the IT resources or budgets of enterprises. One is business intelligence (BI) or the ability to gather information generated by the business to help its financial and operational performance. Until recently, business intelligence solutions were the preserve of enterprises, supplied by ERP vendors such as Oracle’s Hyperion, SAP’s Business Objects and IBM’s Cognos.
Microsoft has joined the market with a business intelligence solution for businesses ranging in size from SMBs with 100 employees or more to mid-sized companies. Microsoft’s PerformancePoint Server 2007 collects and analyses business data – such as revenue, back orders, customer complaints and so on – and presents it to the decision makers and employees via a series of dashboards and scorecards that give an instant picture of the health of the business and of the performance of the units within it. The whole idea is that it improves the performance of the business.
PerformancePoint Server uses SQL Server to store and process the data and Office applications such as Excel as its user interface. Web-based access to PerformancePoint is provided by Windows SharePoint Services, which is part of Windows Server 2008 and 2003.
APC Pro spoke to Microsoft's Chris Caren, General Manager of Office Business Applications, about business intelligence and the PerformancePoint product.
APC Pro: Why is Microsoft targeting Business Intelligence?
Caren: The core to our strategy is to take a category of software that has existed for nearly 15 years now, a mature category that remains a top priority for CIOs. The Gartner Group has surveyed CIOs on their most important technology spending categories and BI has been number one for the last two years across multiple countries. But it’s still remarkably narrowly used in companies. On average, ten to 15% of employees in corporations actually use BI software. Core to our strategy is making BI pervasive in companies by baking BI – the end-user aspect - directly into Microsoft Office and Sharepoint, with PerformancePoint. We want to get to ubiquity and broad based usage, and hopefully provide value for our customers. And the other part of that is getting to a complete product line, so a company can look to Microsoft for all of its BI needs, from analysis and scorecarding all the way through to financial management and planning.
APC Pro: What does BI do for a business?
Caren: One is more informed decision making. For instance, you get an email in your inbox to approve a purchase order. Today you think in your head: ‘I think I am OK on budget, I will go ahead and approve it.’ How much better informed would you be if you could actually check your budget very easily inside of Outlook? If you could, you’d have some more informed decision making.
The second is to use BI to better align everyone in the company to strategy, so you use BI as way to cascade responsibilities from the top level plan to every individual. Everyone gets a scorecard of the things they are accountable for, how they align to company strategy and how they are doing. They know whether they are on track or off track, so it’s all about setting up this strategy development, cascading responsibilities, and then, in real time, tracking performance to plan.
APC Pro: What’s the typical scenario in a company without BI.
Caren: It’s email and spreadsheets! I was at the fifth-largest company in the world in terms of revenue and they have huge amounts of money invested in SAP to automate payroll, payables and their core operations, but when I asked how they ran the business, they said it’s all Excel and email. Our strategy is to embrace Excel, Excel is fantastic for ease of use and familiarity, but bring to it traditional BI things, like security, trust, auditability, everyone having the same view of the business. So we embrace Excel for the good things, but bring the control and manageability that companies want for it.
APC Pro: What size business is BI best suited for?
Caren: It starts at the top, for sure. We design our products for scalability, multicurrency, multilanguage, for all sorts of complex functional needs of large organisations, but we are trying to get down to smaller companies, down to a 100 employees, and have solutions that are priced for that market, that can be deployed very easily by very limited IT staff, and easy enough to use so there is almost no training. So it’s a very broad spectrum of the market.
APC Pro: So how would I introduce Business Intelligence to my company?
Caren: A big step is getting a comprehensive view of your business through a data warehouse or a data mart, which bring together all the views that you care about, financial, employee, customer, operations, and then asking business people what information do they need to be more effective? And using that to deploy things like scorecards and reports that help people be better informed on how the business is performing.
Effectively, if you think about a process to manage your business, once you have your strategy, it’s about developing a plan, it’s aligning people to the plan, and monitoring progress and then doing analysis on execution to plan day in and day out. Then you need to be able to adjust goals and adjust your strategy. That’s how you loop the entire business management process from plan, monitor and analyse. PerformancePoint lets companies do all three activities in a single application.
APC Pro: Do you find most companies have this business intelligence information ready?
Caren: Most of them have it. Sometimes it’s in people’s heads, sometimes it’s formalised in documents and policy and so forth, but it’s important to actually understand what you are trying to achieve so you can measure your progress towards it, which is what the performance management genre of tools is about.
APC Pro: So you find out where the data resides and then mine it out?
Caren: Yes, very often, you say 'here are the seven metrics that are core to my strategy, and here is who is responsible for them,' but a big part is not just giving the executives and managers and employees visibility to how you’re doing versus the strategy, it’s also when there’s problems or when things are going better than plan, to be able to drill into details, to do analysis, to understand what’s really going on.
APC Pro: So what kinds of analysis tools are incorporated into PerformancePoint?
Caren: It’s typically visualisation of data, could be Excel-based grids of numbers, often it’s charts and things that are interactive, so you can drill into detail, drill across, drive other information into your chart or grid, to do comparisons, and it’s typically done in Excel or web-based in a browser via Sharepoint.
APC Pro: What are the Microsoft products that your business intelligence solution works with?
Caren: It’s basically two, SQL Server for the BI platform and Microsoft Office for the end users. And the core products in Office are Excel and Sharepoint and the new performance management offering PerformancePoint completes our offering. Of course, you can do business intelligence using just Excel and SQL server or Sharepoint, Excel and SQL Server, but if you want to really evolve into using BI to define strategy, align people to strategy, and use things like dashboards and scorecards, that’s when PerformancePoint comes into play.
APC Pro: I am an IT manager. My CIO has come to me and said she wants a business intelligence solution. Where do I start?
Caren: First thing is the importance of understanding what business strategy you are trying to put into effect with the application. We found one of the core things that leads to a project’s success is strong business sponsorship and supporters that are deeply involved deeply in the project. BI should not be something handed off to IT at the very start with an instruction to “go and do it”. To make business intelligence work, the business must clarify the strategy; assign ownership to initiatives and to metrics. All these things are required to make sure projects are successful. Then you must talk about what is the value you are trying to drive from the application, who are the intended end users, what’s the information, insights or questions that can be answered from the application? From that you start to mock up what it actually could look like in use and you then deliver something that meets their needs.
APC Pro: Who is usually the sponsor of business intelligence in senior management?
Caren: It’s very common that the CFO is the business sponsor, but performance management can be applied to Sales, Operations or for HR. So the business sponsor could be a head of HR or Sales. We’re also starting to see companies trying to do it very holistically, where it could be the COO or CEO who are doing it for all their departments. The first step is to get the requirements of the person that is going to be using it, find out what information they need and then figure out how that can be defined by metrics. Then you go into the more technical aspects of it, financial modelling and data modelling and all those sorts of things. So you build them a system that is going to present them with that relevant information.
APC Pro: Assuming I am sold on PerformancePoint, how can Microsoft help me set up a business intelligence solution?
Caren: We are doing a tremendous amount of work to train and recruit partners to Microsoft, because our product line has grown so much, it’s a combination of taking existing partners and helping them design great solutions for our customers then recruiting new partners to Microsoft that might have expertise in financial management that have not historically worked for Microsoft.
APC Pro: From a Microsoft perspective, why is Microsoft pushing into business intelligence?
Caren: There is a general belief, from talking to customers, that business applications and working with business information is too hard with today’s solutions - whether it’s sales force automation, supply chain planning or BI. The way to make it much more accessible and much more valuable is to bake into Microsoft Office, where you are already working and collaborating and making decisions. So we’re transforming Office from just being a great place to work with unstructured data (like a Word file, PowerPoint or an email) and loosely structured processes, to an environment where you can work very well with structured data. Things like BI and similar structured processes, it might be having an approval or a workflow or signing off on a forecast, the types of things that business applications traditionally do.
So Office can be the place a user, an information worker, can pretty much do all of your work without first having to jump out to a business application, or jump out to a BI tool.
APC Pro: Have you noticed any difference between US and Australian business's willingness to adop BI?
Caren: I put Australia in the top four or five countries for progressiveness around use of information to run their business, and having a good, formulised articulation of strategy. I would bracket Australia with some of the Scandinavian companies as well as probably British companies and a smattering of US organisations. But from what I have seen the average Australian organisation is farther ahead than the average US company and more on par with the parts of Europe I have mentioned. Australia has a very mature market for BI which makes it one of the countries we focus on earliest.
We’re incredibly committed to the Business Intelligence business. It’s one of the biggest new businesses for Microsoft. Steve Ballmer says it’s one of his top five new growth areas for the company, and we’re putting a tonne of resources into it in Redmond, where we do development in the field to make this a big part of what Microsoft delivers to customers. The core of that strategy is trying to make the technology incredibly valuable and baking BI into Office, to overcome the ease-of-use and cost issues that have limited deployments to date.
The price points are important. We think BI is too expensive for broad based usage, so instead of $1,000 a user, we’ve been coming to market at 20 percent of that.
APC Pro: How does Microsoft's move into business intelligence impact other BI vendors?
Caren: Our product strategy is quite different, it’s about embracing Office and trying to put this intelligence in the place where people collaborate and work versus most of the traditional vendors who put this intelligence inside of these traditional ERP applications that don’t have the widespread use inside companies. It’s ease of use the customers want.