Changing market dynamics are compelling enterprises to look at Business Intelligence (BI) and Analytics. It’s all going the mobile and collaborative way. By Harshal Kallyanpur
A discount or a promotional offer today may not suffice to attract or retain a customer. Merely looking at the sales figures for a product would not give a company, an accurate idea of its popularity in the market, in today’s digital age. Enterprises today, are finding it increasingly difficult to expand their business and capitalize on their existing customer base by relying solely on the traditional methods of customer and market engagement.
Increasing competition, market saturation and economic slowdown are among the factors that are prompting organizations to look at different channels of delivery and engagement. Newer delivery channels, especially the Web, are not only turning out to be effective means of marketing but also platforms where organizations can tap into the pulse of the market pulse.
Business Intelligence (BI) & Analytics tools, with their ability to provide a detailed view of data for making business decisions, are increasingly being sought after by enterprises.
Arun Ramachandran, Country Manager, Data Computing Division, EMC India & SAARC, said, “Compliance is driving the banking vertical, while large data volumes are prompting telcos to take a look at analytics. The retail sector is driven by the end customer. Competition in the market is the primary reason as to why organizations look at analytics. The older ways of promotions and discounts places a lot of pressure on margins, due to which organizations have to look at new ways of attracting and retaining customers.”
Ramendra Mandal, Country Manager – India, for Qlikview made a similar observation saying that the recent economic downturn and economic issues caused by non-performing assets had made organizations turn to BI in order to grow the topline and improve the bottomline by cutting costs and improving organizational processes.
The need to comply with regulations is another factor. Mandal said, “Transparency is becoming important, with many companies looking for funding from outside or getting themselves listed. Even if they need not be compliant with a certain regulation, if their processes are in line with that regulatory requirement, it is far easier for them to go into business with other global organizations.”
Sudipta K. Sen, Regional Director, South East Asia, CEO & Managing Director, SAS Institute (India), said, “Initially, banks adopted BI to address concerns associated with regulatory compliance such as Basel II. Today, these organizations want BI to give them a single view of the customer, his or her buying potential and help design targeted campaigns.”
Sen added, “The BI market in India is growing at 20% and it will reach $285 million in the next one year. The growth of this market will be driven largely by sectors such as BFSI, Telecom, Government and Retail.”
He believed that the rise in fraud due to the overall increase in transactions, especially those conducted online, had led to organizations looking at BI and analytics for fraud detection. Government and security agencies are turning to analytics for crime detection and monitoring as well as for predicting terrorist activities.
According to Rajesh Varrier, Chief Executive Officer, Activecubes, industries such as Retail, which weren’t heavily regulated, felt the need for BI and analytics when they came to a point where they believed that they needed to understand the type of customer, his or her buying patterns and to ensure that the customer came back to the store rather than frequenting a competitor’s store.
“The retail sector has seen tremendous growth in the last three to four years and these groups have acquired real estate and set up new stores and the back end processes needed to manage them. The next few years will be about acquiring and retaining customers while optimizing costs, processes, supply chain and inventory,” observed Varrier.
Business Intelligence: Been there done that
Most mid to large organizations in India have a full fledged ERP system in place today. This means that they have been generating digital data for a long time now. Deploying a BI and analytics solution to make sense of this data and take meaningful decisions seems like the logical way ahead.
On the other hand, most ERP vendors be it SAP, IBM, Oracle or Microsoft, have their own BI or analytics tool, either through one or more acquisitions, or by developing one. IT departments would typically choose to go with the solution that comes from the vendor who sold them the ERP system on account of easier integration and better support and services. Unless, of course, there is a third-party solution that excels at some particular aspect of BI/analytics which just happens to be the feature that the organization needs.
RV Ramanan, Executive Director & President Global Delivery, Hexaware Technologies, commented, “Most Indian organizations have an ERP solution in place and it is a level playing field for them. Most have their processes in place and the only way for an organization to differentiate itself today is by analyzing its digital data to make decisions that give it a competitive edge.”
“For instance, all banks have a core banking system in place and they provide, more or less, the same sort of banking services. The differentiating factor would be the other service offerings that they come up with for a specific set of customers,” he said.
Satish Gaonkar, Vice President – Consulting Services, Blue Star Infotech, observed that most large organizations had been running an OLTP system for 8 to 10 years now. Many large banks have already implemented an analytics solution. Most telcos have implemented BI as well analytics. Large automotive organizations, on the other hand, have implemented BI and are looking at implementing forecasting tools and this trend is trickling down even to automotive component manufacturers.
Bhavish Sood, Research Director at Gartner, said, “Large enterprises such as banks, telcos and some of the large retailers, have fairly sophisticated BI and performance management systems. They have already deployed reporting tools which are finding good acceptance within the organization. These include operational reporting, line of business managers using scorecards and senior management using dashboards. Mid-sized enterprises are currently evaluating products or are doing greenfield projects.”
“A lot of analytical tools are being deployed at the vertical or the functional level. For instance manufacturing companies are looking at warranty analytics while telcos could be doing churn analytics,” he added.
Gaonkar said,”Two or three years ago, most requirements from organizations would come for BI reporting or dashboards. Today, however, segments such as BFSI, telecom and retail are asking for an analytics solution. People have understood that BI and Analytics are not the same thing.”
Breaking new ground
According to Praveen Bhadada, Director, Market Expansion, Zinnov, while the Future group has been using such tools to manage its loyalty reward points program for customers, the Royal Challengers Bangalore used analytical solutions during the IPL to advise players on how they could perform better, based on an analysis of their past performances.
IBM has a college in Karnataka and one in Gujarat using its BI and analytics solution to determine how each course in the college is performing and whether it should be retained the following year or not.
Arogyasri, a healthcare trust in Andhra Pradesh that offers cashless healthcare to people below the poverty line, has used SAS’ solutions to detect fraud by medical centers claiming to have performed expensive surgeries.
In 2007, the Government of Maharashtra’s, Directorate of Economics and Statistics, with the help of Bluestar Infotech, deployed an analytics solution. The department, which is responsible for producing and publishing official statistics for the state of Maharashtra, uses this solution to gather data from various districts into a data warehouse, model it and churn out reports that are published on the state government’s Web portal.
Completed within eight months, within a budget of Rs 5.5 crores and five years into the implementation, Maharashtra is apparently the first state in India to deploy a BI and analytics solution that it covers all of its districts.
User speak
Popular mobile chat application provider Nimbuzz also banks on BI and analytics to understand its customer base better and improve business efficiencies.
Being an instant application that is available on a variety of mobile platforms, the application already has a customer base of close to 100 million and, on a given day, 25% of this user base is active.
Joby Babu, Head of Operation, Nimbuzz, said, “We categorize users based on the type of content or the genre of content they access through the application. Once we have a particular number of users accessing the same kind of content, we use this data to create user profiles such that these users can be targeted with specific advertisements and brand up-selling.”
“We collect data on a daily basis and around 10 to 20% of the data we collect is truly useful to us from an analytics point of view,” Babu said.
The user profile enables Nimbuzz to understand the customer better helps in creating targeted ad campaigns. For instance, if a particular clothing brand wants to target women of a particular age group, based on the user profile, it can push those ads to that specific user group.
The company is currently using Pentaho for its BI requirements. The tools are also helping the company determine how each of its sources of activation are faring. The application is available via Google Play (Android), Apple’s App Store, the company web site and through the Nokia Ovi store. The company can analyze how each source is contributing in terms of customers and take decisions on optimizing each source of activation.
According to Babu, Nimbuzz also plans to use analytics to keep track of user activity in a way that, it can predict if a particular user will sign off from the service and stop using it.
Looking beyond traditional tools
While a lot of organizations are looking at BI and analytics solutions from traditional purveyors of these solutions, others are turning to the likes of Qlikview and Pentaho. These companies are offering lighter tools that are fairly easy to implement and use, offer good performance, run on high performance technologies such as in-memory, provide good visualization capabilities and claim to do all this in a cost-effective manner.
Sood of Gartner said,”A major trend is to deploy a BI/Analytics tool above the existing ERP application. Data discovery tools such as those from Qlikview, Tableau and others, which are known for their strong visualization and good in-memory capabilities and faster time to market, are complementing existing BI implementations. An organization may have deployed a BI tool but may still be investing in a few licenses of these solutions for its senior management.”
According to Sood, as these tools offered superior self service capabilities when compared to traditional BI solutions as well as higher performance with in-memory capabilities and highly interactive visualization features, they are seeing increased uptake in the market.
Gaonkar opined, “Solutions such as those from Qlikview have built connectors for most of the BI products from traditional vendors. They can connect with, say, an SAP system and provide visualization capabilities for data pulled from that system as a source. They eliminate the need to write extensive code, which would have otherwise pushed the time and expense to implement and maintain the system.”
“These tools also minimize the need to invest in additional hardware, thereby bringing down the cost and time taken to implement the solution. They are doing well in the market because, organizations may not have the budget for tools such as HANA or OBI which can be expensive to adopt,” he said.
He explained that analytical tools called for a major investment. They could be expensive and the associated support expertise was expensive too. While Qlikview is more of a visualization tool than a ETL tool, smaller enterprises do not want an a separate ETL tool and, therefore, they choose to invest in tools such as Qlikview since it also offers in-memory ETL capabilities.
Quoting an IDC estimate, Mandal said, on an average, globally, it took anywhere between 16 to 18 months to implement a traditional BI tool. This includes deploying the ETL tools, data warehouse and OLAP tools. Furthermore, these tools lack the flexibility to make the necessary modifications if requirements changed.
The other factor, according to Mandal, was that traditional tools are not end-user driven but IT driven. Reports are pushed out to the user. The end user is told that the reports need to be accessed in a certain way and there is no provision for the user to make changes and view them as per his or her preference.
“We have examples of customers who are using Qlikview along with traditional data warehousing tools. We believe that it should not be an either-or approach, but a co-existence of different BI and Analytics tools, each playing the role it is meant for,” explained Mandal.
The company currently has 450 customers in India. According to Mandal it is growing at a rate of 50% CAGR globally but its growth in India is much faster.
Going big with analytics
Today, there is a lot of noise in the industry about Big Data. A major contributor to Big Data is considered to be Social Media or Social Networking portals and the amount of data an organization is seeing today due to online interactions, online transactions and the Web.
The amount of unstructured data is slated to grow and companies, will have to rely on Big Data analytics to churn this ocean of information and pull out meaningful insights from the same. Consequently, there is a push for Big Data analytics in the market and most vendors and analysts believe that it is just a matter of time before the tools for Big Data analytics start seeing widespread adoption.
Bhadada of Zinnov said, “Excel sheets could handle a certain amount of data, beyond which the need was felt for analytical tools that could provide some meaningful dashboards and customization for data analytics. In this way, data proliferation is increasing; there is a greater need for Big Data analytics.”
Shalil Gupta, Director, Financial Insights and Consulting IDC, shared a similar opinion saying that, in the last two decades, most organizations had been capturing data, through relational databases, management information systems (MIS) and ERP, which basically dealt with structured data. Today data has moved beyond structured to semi structured data such as e-mail and completely unstructured data coming from social media.
“80% of data is unstructured. The combination of the velocity with which this data is growing, its volume, variety and the value to be derived from it is creating complexities for organizations from a data management perspective. Managing terabytes, exabytes or zettabytes of data requires a different architecture,” explained Gupta.
Ramachandran of EMC commented, “Traditional BI tools are primarily used for reporting. Reporting provides ‘what happened yesterday’ answers based on internal operational data. There is still a market for this kind of tool and it is growing. However the focus nowadays is on determining what can be expected to happen tomorrow.”
He said that traditional solutions fell short when it came to providing predictive insights. To make a predictive analysis of what will happen, an organization not only needs to look at internal operational data but also external data. Older systems are not equipped to do larger scale analysis of data. This is where Big Data analytics offers a cost-effective solution.
According to Gupta, the market for Big Data in India was currently valued at $57 million and it was growing at 36% year on year. Around five percent of organizations in India have either implemented Big Data solutions or are in the process of doing so. In two years, this percentage is expected to increase to 16%.
He informed that companies in the BFSI, Media & Entertainment, Energy and Utilities sectors were all looking to adopt this technology. For instance a major oil and gas company in India is looking at implementing Big Data at its oil exploration site for analyzing topographical data. According to him, a Big Data solution had helped Shoppers Stop determine how leather shoe sales could be boosted by placing them strategically in stores.
Bhadada observing an increase in adoption of Big Data solutions saying,” We can expect the bigger companies with greater penetration and bigger customer bases, to adopt these tools first, followed by their partners and suppliers, with adoption increasing rapidly over the next three to four years. 2014 will be the year when we will see a peak in the adoption of these tools wherein a lot more pilot projects and use cases for Big Data will be seen.”
Going mobile & social
Another key trend that is affecting the BI market is that of enterprise mobility. Organizations are increasingly opening up to giving access to enterprise applications to the workforce as they believe that this would only help increase boost productivity. Employees to want access to enterprise applications on a smartphone or tablet and this is fueling the phenomena of Bring Your Own Device or BYOD in the market.
With mobile devices providing the ability to have instant on-the-go access to business data and reports, BI and analytical tools can be expected to be one of the early popular enterprise applications on mobile devices for corporate executives.
According to Mandal of Qlikview, 25-30% of BI users would use BI on a mobile device. India will be a step ahead of other countries due to the strong proliferation of mobile devices in terms of adoption.
Observing the growing interest in BI and Analytics on mobile devices, Prashant Tewari, Country Manager, Cognos & Business Analytics, IBM Software Group India/South Asia, had this to say. “Customer requirements have completely changed. Earlier, clients were only looking for vanilla reporting. Today, the requirements are a lot broader. For instance, a bank with around a thousand branches in the country wants to give its branch managers an iPad each so that they can see reports on the tablet.”
According to him, the spurt in interest among organizations for using mobile devices to access BI platforms could be attributed to the fall in prices of 3G connectivity and rising adoption of 3G.
While there is a growing interest to have BI or Analytical applications on mobile devices, one needs to note that, given the processing and storage limitations of these devices, they would primarily be used as a delivery channel for employees to consume the reports and dashboards generated by BI and Analytics tools that are hosted on the company’s servers.
Social networking, on the other hand, will not just contribute as a source of data but also as a collaborative tool for BI. Tewari explained this with an example of an IBM customer that had integrated Cognos with its Lotus implementation in such a manner that BI reports generated by the former could be stored within the latter and accessed by employees within the organization in a collaborative manner.
Qlikview also offers co-browsing on the same dashboard, where multiple people can be invited by the host to login and access the dashboard and make changes simultaneously, add their own perspective so that an informed business decision can be made. The company has had instances of organizations using its solution giving its suppliers and even customers access to the solution so that they can collaboratively help contribute to improving the overall efficiency of the entire ecosystem.
As organizations feel the heat of tightening margins, multiplying regulations, growing competition and economic instability, BI and Analytics looks set to provide some respite. Many organizations have a mature BI environment in place and are looking at ways to sharpen these tools, while BI and Analytics tools by themselves are finding some new takers as well.
On the other hand, as traditional BI vendors add new weapons to their arsenal, newer vendors are carving out their own niches, while building a symbiotic relationship with the incumbents.
