One of the most interesting stories in Indian mythology refers to churning of an ocean by gods and demons in a battle for supremacy that led to discovery of the immortality nectar among other priceless objects. To win the competitive battles in today’s world, businesses are doing something remarkably similar—churning vast oceans of data that their organizations’ IS systems generate, to discover hidden but priceless information that can give them an upper hand over their rivals. The process is commonly referred to as data mining, and the mythical nectar is business intelligence. 

BI tools and applications uncover market intelligence, consumer intelligence and operational intelligence, which live in the data in the form of hidden trends and patterns and help managers do informed decision making. With growing competition all around, the necessity of using your own data to your business advantage is far from questionable. As CN Ram, head (IT) at HDFC bank says, “There is no other choice for any organization that is focused on customers. BI is a must and it must be used intelligently for profit”.

The Process of Becoming Intelligent
BI is nothing but the intelligence needed to run a business successfully. The premise: invaluable and profitable information is hidden and can be uncovered out of all data captured by different applications like ERP, CRM and accounting applications in the enterprise. There are different tools and applications available in the market to uncover this business intelligence. Taking them step by step, the first thing a business needs is a data warehouse, or a data mart—which is the basic data repository that holds all that ‘hidden’ BI. The data warehouse holds all data from multiple sources. Most RDBMS vendors offer tools or extensions that allow their RDBMS to be turned into a data warehouse.

The actual task of dumping data into the warehouse is handled by a sophisticated application called ETL—extract, transform and load—that extracts data from disparate sources, transforms that into a single, uniform format that is understandable both by the data warehouse and by analytics applications. It then loads the formatted data into the data warehouse, or the data mart. BI bigwigs like Business Objects, SAS etc are renowned for their ETL tools.

Once you have the formatted data, comes the final stage of analysis and interpretation. Different types of information analytics applications (or BI applications) handle this job and they work in different ways. The simplest of them are online analytical processing (OLAP) tools that allow users to ask ad hoc questions like sales by departmental store, by region, by month, and so on.

There are also SQL-based querying tools that vastly simplify the task of querying data to answer specific questions. On a higher level, there are specialized BI applications that work for a single process—say CRM or inventory management. These apps aid managerial decision-making by intelligently mapping and forecasting performance. They present information in the form of cross-tab reports, aggregations and hierarchies, trend projections, and what-if analysis.

Where BI Helps 
BI is today applied for applications as diverse as customer retention or marketing strategy, and logistics optimization to employee appraisals, inventory management or supply chain management. 

Who’s Using It and for What…
Most Indian users have stuck to ad hoc querying and reporting. A few, mainly in services industries, have moved on to the next level
	Private-sector banks are using BI for credit risk management and to cross-sell different products. RBI has deployed BI for analyzing the macro and micro economic factors
	Most of the telecom biggies have gone ahead with information analytics tools, with private players taking the lead in deployment
	In the manufacturing sector, companies like Maruti and Pidilite are using BI tools for distribution and inventories manage–ment, and warranty claim analysis

Ramesh Krishnamurthy, director (professional services), SAS India, says, “Other BI applications include those that provide for an enterprise-wide view while addressing other business needs like fraud detection, predictive maintenance, risk management, objectively narrowing, measuring and ranking suppliers best suited for your needs, minimizing purchase costs, and identifying effective promotions.”

"BI applications make information available to decision makers in the form of cross-tab reports, aggregations and hierarchies, trend projections, what-if analysis, and KPI tracking,” says Somesh Bhagat, marketing director at Oracle India.

There can be broad BI applications like risk management and financial planning, applicable to most of the organizations across various industries, and then there can be focused and highly sophisticated applications like warranty claim analysis (automotive industry) and material and logistics analysis (wholesale and manufacturing industries).

BI on the Ground
Though the technology and applications have been around for alm_ost three years now, the market for a full-fledged BI solution hasn’t exactly taken off in India. While it is true that most companies with transactional data systems in place have been using simple tools or homegrown applications to make sense out of that data, sophisticated BI solutions have so far eluded all but a few large companies, mostly in services. Most of the companies in India have begun with using BI for ad hoc querying and reporting. A few early adopters, mainly in services industries, have progressed to the next level where they use advanced analytics applications.

The market began warming up six to nine months ago, with varied installations happening in many major industries. Tarun Malik, product marketing manager at Microsoft India says, “Adoption has been pretty aggressive by industry leaders—top five to ten companies in each area—in banking, telecom, manufacturing, retail, among others.”

The Indian BI solutions market is estimated to touch $15.3 million by end-2003, according to a Frost & Sullivan report.

Worldwide, the BI solutions market is expected to touch $2.3 billion by 2005, according to Gartner. IDC has estimated that the APAC’s BI solutions market totaled $588.1 million in 2002.

“There is a growing realization that companies need to derive a lot of value from their existing IT investment and business dynamics. BI, specifically analytics applications in BI, are on the rise,” says Arun Ranganath, analyst (software and services research) at IDC India. Ranganath adds that the action in the Indian BI space is “still concentrated in the high-end/large enterprises.” 

Most of the BI implementations have happened in services industries, led by banking and telecom, perhaps because “companies perceive they can earn a higher RoI on their BI investments if these can help them increase customer acquisition, customer retention, and customer up-sell and cross-sell,” according to B Amrish Rau, country head, Teradata division, NCR Corp. India.

The Haze Around BI Very often, BI gets undermined by being mistaken as yet another traditional query-and-reporting tool Businesses often tend to perceive BI either as a souped-up MIS application, or an extension to their ERP systems. Sometimes it is even confused with ERP. While ERP automates the transactions process, BI works on top of it to derive intelligence and help decision-making from the data gathered What’s Stopping BI Indian companies are still in the early adoption phase of enterprise applications such as SCM and CRM BI applications are usually high-end tools that sit on top of other productivity apps So till the time that enterprises rise high enough on the maturity curve, they won’t feel confident enough about large-scale BI deployments Implementation costs remain prohibitive for sophisticated BI tools for most businesses

If IDBI Bank uses BI for credit risk management, then both HDFC Bank and ICICI Bank use BI to cross-sell different products using tailored marketing campaigns—boosting both returns from existing customers as well as new customer acquisitions. The Reserve Bank of India has deployed BI on its enterprise data warehouse for analyzing the macro and micro economic factors. By performing enhanced customer analysis using a BI tool, Standard Chartered Bank successfully launched DIVA—a special credit card targeted at Indian women with some unique features. 

Every telecom player worth its name has gone ahead with data warehousing and information analytics tools. To illustrate, Bharti Telecom started providing regional roaming to its customers after it found out from its data that its customers in one state bought new SIM cards while traveling to a neighboring state as they didn’t want to pay full national roaming charges.

Then there are manufacturing companies—Nicholas Piramal (for distribution and inventories management), Maruti Udyog (warranty claim analysis), Pidilite Industries, and H&R Johnson have claimed benefits from implementing BI tools. 

Drivers and Inhibitors
There are some obvious reasons that have restricted adoption of BI solutions in Indian enterprises—the lack of IT maturity probably being the biggest of all. While many companies still don’t have an automated transactional system (ERP, CRM or SCM) in place, most of those that do have only implemented it in the last two-four years. “Indian companies are still found to be in the adoption phase of enterprise applications such as SCM and CRM, and BI applications are often regarded as a high-end and more mature application,” says Vivek Rawat, country manager (data management software) at IBM India.

One offshoot of this problem is that businesses do not have enough data to perform analysis on. Then there are cases where data is not clean and in usable format. “Putting data in a standard and uniform format and making it available for the business unit is not the easiest task,” explains Sanjay Deshmukh, business development director at Business Objects. 

From a user perspective, Vikram Srihari, director (business systems) at Coca Cola India agrees, “BI, without a mature data warehouse solution and ETL tools for ensuring seamless integration of the transaction systems populating the warehouse, is a huge challenge.”

Also, most vendors feel that businesses are unaware of the benefits of BI and tend to perceive BI either as a souped-up MIS application, or an extension to their ERP systems. There is “a blurred understanding of the concept of BI, typically being limited to a traditional database tool, which is simple querying and reporting,” says Ramesh Krishnamurthy, director (professional services), SAS India. Agrees B Amrish Rau, country head, Teradata division, NCR Corp, “Organizations often take BI to be just a reporting tool and part of MIS, but BI extends much beyond than that.”

Sometimes even ERP is confused with BI. “Whereas ERP automates the transactions process, BI works on top of it to derive intelligence and help decision making from the data gathered,” says Krishnamurthy. 

And then, costs involved in implementing a sophisticated BI might have scared away many businesses. “Besides investments in hardware and software, long and expensive consultancies are normally required to implement business intelligence solutions”, says Ravi Chakravarthy, country manager at Hummingbird.

However, recent market trends and favorable forecasts by analysts have brought strong optimism to the BI solutions industry.

The data warehousing and data mining segment has seen strong growth in the recent six to nine months. Teradata’s Rau estimates that DW market itself is growing at 200% year-on-year. 

The increased adoption is being driven by factors like explosion in amount of transactional data, because of increased ERP/CRM implementations. “Companies have realized that the vast amount of data being stored across their value chains can be utilized in a productive manner to understand customer, organization and supplier behavior and thereby gain a competitive edge”, says Krishnamurthy.

Survival in the highly competitive marketplace is another dominant reason for companies to consider a BI solution. Particularly in services industries where it can get difficult to distinguish your offering from another service provider, businesses must have all the information about their customers, their needs and preference that they can. In services companies, BI is often used for product differentiation, says Malik. 

In the Near Future
Vendors feel that BI will grow out of shadows of transactional systems and will become a strategic investment over a period of two-three years. SAS’ Krishnamurthy says there would be increased uptake of BI applications packaged by line-of-business and industry. SAS has introduced packaged intelligence solutions for telecom, banking and insurance segments.

Oracle’s Bhagat also feels that market is moving towards packaged products, “Customers will get pre-built intelligence packs across various business areas like financials intelligence, contracts intelligence, HR intelligence, marketing intelligence, and supply chain intelligence.”

And vendors continue to be bullish on the overall market scenario. Microsoft’s Malik says BI is going to be a prominent enterprise software segment and will be one of the largest opportunities staring the IT business software vendors today. He further expects a rapid adoption rate trickling down to mid-tier organizations in one-two years timeframe.

Rishi Seth