BITSoftware / Blog

As I said in an earlier post about ERP Prediction for 2012, this year cloud-based ERP will continue to gain ground at the expense of traditional ERP. Why? Because enterprises will continue to adopt SaaS-based applications to replace legacy, high-maintenance and often marginally effective systems in use today.

What managers do not know about cloud is that behind the well-known benefits – cost savings and operations improvements -, there are also some benefits that can potentially change the game for many companies that are willing to be very proactive in managing potential downside. Those are the things I wanna talk about.

Easier change management of infrastructure including maintenance and upgrades

The use of cloud solutions allows companies to improve the agility to deploy solutions and choice between vendors, especially when cloud interoperability will become a reality. Or, at least, more than it is today. Cloud computing also offers an online ramp to new non-relational databases, new languages, and frameworks that are designed to encourage scalability and take advantage of new innovations.

Cloud computing holds the potential to dramatically change the businesses that adopt it

There are some opportunity windows not to be missed. For example, cloud computing lets companies to create a new generation of products and services, significantly less expensive or more profitable than the competition. You will no longer need to purchase prohibitive amounts of computing power or radically new business models in order to improve your data storage or processing power, because cloud computing makes these opportunities unusually accessible.

More tolerance for innovation and experimentation from businesses.

With fewer technical and economic barriers to creating new ways to improve the business, cloud computing will enable prototyping and market validation of new approaches much faster and less expensively than before.

In the short term, for many organizations the apparent potential of the individual changes above will often not be sufficient to them to make the transition to cloud computing. Longer term, cloud computing is increasingly appearing to be a transformative change in the business landscape. It`s up to you if you want to be one step ahead of your competitors, or prefer to stay in the squad. Because adopting cloud solutions will give you an important advantage to compete in the modern business environment.

Sources: Forrester Research, Gartner, ZD Net Consulting

During my years of industrial marketing and sales, I learned that there is a big difference between corporate information and Strategic Knowledge.

Corporate information usually consists of internal raw data while Strategic Knowledge is the business wisdom necessary to achieve profitable growth consistently.

Although internal data is necessary to manage logistic or tactical areas like, supply chain, manufacturing, accounts receivable, transportation, accounts payable or customer service; it’s far from enough to perform marketing and sales management jobs effectively, namely increasing market share, revenue and ultimately net profit.

The reason is simple, internal data is a by-product of the order entry system (ERP), designed to ship orders on time; not to build a strategic data base for marketing use.

Unfortunately, most Business Intelligence implementations populate sophisticated BI software with just internal raw data from the ERP.  This is only half of the story because ERP data does not usually contain competitive or market intelligence.

This is the reason why BI usually does not provide the immediate strategic analysis and direction necessary to grow the businesses, leaving Marketing and Sales teams struggling to find the information they need to increase profitability.

Typically, after Sales or Marketing run BI reports several times and they keep seeing the wrong structure or hierarchy in their customers, markets and territories, they stop using BI and continue making decisions the old fashion way: based on intuition.

Can Companies Really Compete on Analytics?

Absolutely, Business Intelligence is much more than software. Business Intelligence should be a reliable, analytical process that transforms raw data into relevant, accurate and useable strategic knowledge.

Strategic Knowledge is the result of the seamless integration of internal transaction data with external market intelligence. This includes market & customer segmentation, channel structure, budget and sales projections, market share, growth, business opportunities, competitive analysis, profitability metrics, product innovation metrics and the ability to run instant P&L’s on any combination of these dimensions for any time period in the past, present or future (like budgets or business plans).

The key is to utilize the powerful business intelligence software available today to perform this integration and automate the process.

In my experience, the result of this full integration is always a change in the company’s culture, where instant access to strategic knowledge means that anyone who needs to know (normally marketing, sales, finance, R&D or management) can accurately answer extremely complex business questions within one minute. They can find the root cause of problems, right from the BI software, with no manual intervention of IT or business analysts, and take immediate action.

Being able to react to changes in the market-business-profit reality, faster and better than the competition, provides the company with a competitive advantage that invariably translates into increased market share, revenue and profit.

This is the most effective way to increase the return on the BI investment, normally so difficult to justify when BI supports just back office functions and not the strategic and profitable growth of the company.

by Bill Cabiro and Strat-Wise LLC

„Please visit their web site at www.strat-wise.com for additional articles and resources on the strategic use of Business Intelligence and Analytics”