What SAP Won't Tell You About Business Intelligence Systems

Introduction: The Hidden Gaps in BI Implementations

Creating value through the use of information systems — to gain critical insights into how a business is functioning, to assess whether it is meeting customer needs, to coordinate with suppliers, and to manage costs — is one of the greatest promises of business intelligence (BI) systems. Intuitively, BI and analytics are seen as a means to significantly reduce risk while increasing the profitability of a business (Yeoh & Koronios, 2010). Yet a question that frequently arises in organizations after implementing a BI or analytics system is why the strategies created on the basis of that expensive investment are not more effective than those executed before it (Chussil, 2005). This paper analyzes the reasons why BI and analytics projects succeed or fail — and argues that the causes often have little to do with what enterprise software vendors communicate during a sales cycle — providing insights into what SAP fails to tell customers when they purchase its software.

Aligning BI to a Clear Business Objective

Ironically, the business need that drives enterprises to seek out a BI, analytics, or enterprise performance management (EPM) solution during the evaluation process often takes a secondary role once implementation begins, displaced by the system and process-based integration work that consumes the majority of time and resources (Werther, 1999). SAP fails to tell customers that meaningful training on how to use these BI platforms effectively is essential. There is some truth to this criticism: SAP and other enterprise software vendors routinely deploy six to ten sales representatives, professional services experts, and process re-engineering teams once an application has been purchased — all at incremental cost to the client (Chussil, 2005). Organizations purchasing enterprise software frequently become mired in the minutiae of implementing the expensive product they bought, losing focus on the original problems they set out to solve (Ariyachandra & Frolick, 2008).

A clear example of this comes from Suzuki America, which purchased the entire SAP suite of BI applications to better manage analytics and reporting for the dealer channel selling Suzuki automobiles. The VPs of Marketing and Sales designed their dashboards in meticulous detail — specifying every metric, measurement indicator type, and update frequency. The IT staff at Suzuki diligently created mock-ups and mastered the integration points throughout the SAP system. Because SAP provides an exceptionally straightforward set of web services interfaces for integrating with legacy systems, the Suzuki IT team had the entire system operational in less than a month. All of this occurred, however, while the dealer channel was swelling with inventory as interest rates climbed and the economy began to slow in 2007. As inventories grew, more analytics and KPIs were added to the dashboard. Eventually, the limits of the platform were reached and the dashboard project was scrapped — it had accumulated so many metrics that it had become unusable. This is a prime example of what happens when an organization loses sight of its initial goal and becomes too enamored with the technology itself.

Having a clear objective is critical to building a culture that will accept change and take ownership of new systems and processes (Sherman, 2006). This is one of the most critical pivot points in any BI, analytics, or EPM implementation. Any implementation must remain on-goal and focused if it is to have enough organizational stability to make it through the many other challenges it will face before permanently adding value (Ariyachandra & Frolick, 2008).

Change Management and Executive Leadership

Just as the senior management team at Suzuki vacillated and lacked focus on their dashboard goals, a small manufacturer of computer equipment — Orange Micro — had a CEO who galvanized change from the top. Known for not using a laptop and for writing his notes by hand, he was a man in his seventies who had achieved remarkable success in the IBM sales organization over the preceding three decades. He understood how powerfully BI and analytics could transform a business, having sold some of the very first BI systems many years earlier. When his manufacturing business struggled to keep pace with order rates and forecasts were consistently off — completely disrupting supply chain priorities — this CEO decided to adopt SAP's Business Objects system on a Software-as-a-Service (SaaS) platform. He not only began using a laptop himself, he authored the majority of the reports and made clear that he expected his marketing, sales, and supply chain managers to do the same. Adoption was immediate and accurate, and within 120 days the company was already seeing measurable results.

This story illustrates a fundamental principle of successful change management: executive leadership must be genuinely invested and completely committed to a change initiative for it to succeed (Srica, 2008). When senior management actively champions a change management effort, the probability of success increases dramatically (Sherman, 2006) — a point SAP never makes when discussing its software with prospective customers.

Conclusion: Strategy Over Software

SAP never mentioned that this entire process of reporting could have been alleviated by creating a single portal for all the analytics. SAP also never mentioned that specific roles could have been assigned within the portal itself, so that every person logging in would see a completely different set of metrics aligned to their specific needs. If SAP had been more focused on how best to support business strategies rather than simply selling software, Printronix would not have burned through so many IT hours just to keep pace with user reporting requirements. The focus had shifted away from strategy and toward reports — a consequence of SAP not sharing what was apparent: only a single system of record was needed for all the reporting being done.

Across all four cases, the pattern is consistent. Business intelligence investments succeed when organizations maintain clear objectives, secure committed executive leadership, understand integration complexity before committing to it, and rationalize their metrics around genuine strategic needs. These are lessons enterprise software vendors rarely volunteer — but that organizations must internalize if their BI investments are ever to deliver lasting value.

References

Ariyachandra, T., & Frolick, M. (2008). Critical success factors in business performance management — striving for success. Information Systems Management, 25(2), 113.

Chussil, M. (2005). With all this intelligence, why don't we have better strategies? The Journal of Business Strategy, 26(1), 26–33.

Harison, E., & Boonstra, A. (2009). Essential competencies for technochange management: Towards an assessment model. International Journal of Information Management, 29(4), 283.

Sherman, R. (2006). Communication breakdown: The Achilles' heel of BI projects. DM Review, 16(11), 37.

Srica, V. (2008). Social intelligence and project leadership. The Business Review, Cambridge, 9(2), 189–199.

Werther, G. F. A. (1999). The crisis of business intelligence: On the necessity of training reform. Thunderbird International Business Review, 41(3), 287–290.

Yeoh, W., & Koronios, A. (2010). Critical success factors for business intelligence systems. The Journal of Computer Information Systems, 50(3), 23–32.