A Demand-driven Approach to BI

Demand-driven BI Approach

Vanguard Solutions Group, Inc. (http://www.vanguardsolutions.com), is a Chicago, IL-based, business intelligence (BI) provider that reportedly achieved major successes in 2004. The core concept behind their solution is that BI must be demand-driven, which means that the business needs of the user dictate the technical solution, not the other way around. In other words, it should let the business users drive the process, and remove the problems of content relevance and software complexity. Namely, although IT-driven BI projects frequently do not deliver what the business users need, Vanguard has come to an understanding that the BI development cycle is inherently iterative and open-ended and that therefore the business decision maker needs to "own" the process. Thus, the vendor's solution addresses the problem of content relevance by making the underlying data architecture transparent to the users, who have access to information from multiple systems, platforms, or locations, and view it in a functional user interface.

To that end, Vanguard's Unified Information Model (UIM) ensures that the appropriate business rules are applied and the information appears in a consistent, integrated context (whereby the user environment allows business users to identify and retrieve exactly the information they need), and provides easy-to-use tools for analysis. The value of information increases dramatically when business decision makers drive the process, by having precise control of the reporting and analysis process. In the context of real-world customer deployments, Vanguard's approach emphasizes a clear separation of responsibilities. That is to say, business people, from front-line tactical decision makers to strategic senior executives, are the key users of the solution, and they are responsible for creating and using the information, reports, and analytics that Vanguard provides. The key leaders of a typical Vanguard implementation are therefore often VPs of sales, finance, operations, purchasing, or other core business functions.

Part Two of the series Has the Mid-market Found Vanguard BI Solutions?

Vanguard's eDeployment

Another core concept of the Vanguard solution is the automated publication and delivery of analytic content to end users, as the eDeployment module automatically generates and "pushes" customized, updated Information Views to business users. These Information Views are user-defined, personalized data sets, in the form of a client-side on-line analytic processing (OLAP) interface, with intuitive data analysis, report writing, and graphing capabilities built in. Further, with user-defined Information Views, which combine data from single or multiple data sources, users view this information in close to real-time without necessarily relying on a data warehouse (DW) or repository, which will be detailed later on. Business users receive Information Views on a predefined schedule via e-mail, or over a network, or by accessing a Web page. For example, one Vanguard customer uses eDeployment to deliver updated Information Views via e-mail to several hundred sales executives across the US every Monday morning. The sales executives are then able to take the information with them on their laptops in a disconnected and mobile fashion, and use it to stay on top of ever-changing sales trends, product promotions, and customer activities.

This model ensures that the majority of the analytical processing of content occurs "off-line" on the user's PC, rather than over a network connection. Vanguard's user environments enable business people to filter, drill-down, modify, and preview the customized Information Views, whereby the level of customization and end-user control is such that the user very rarely needs to generate "live" queries against the relational databases. This also significantly increases the scalability of the solution by delivering compressed data sets during off-peak hours. Through experience, Vanguard has been able to identify the three main types of live user queries (in relation to the above-depicted user groups), and wisely design the solution to support them with a high level of performance. The three most common types of direct queries are

  1. Content building, when power users are creating new Information Views for analysis or distribution to other users.

  2. "Drill-backs", when business users, who receive a summary Information View, analyze the data off-line, then drill back into the relational database for more information to support further analysis. Drill-backs are typically targeted, exception-based result sets that are small and can be processed efficiently.

  3. Pure ad hoc analysis, when operational and execution-based real-time queries—typically to support specific business decisions—are executed by a relatively small number of users.

Since each of these types of direct query has significant business value, and is therefore essential to the value of the Vanguard solution, the vendor has conducted on-site research to determine the frequency of each type of query, and designed the solution to support these users with a higher level of system performance. Further tuning of the system occurs during customer implementations, to account for the specifics of their infrastructure and user base. Overall, Vanguard's combination of automated content publishing and managed database access aims at providing an efficient, scaleable model for enterprise information delivery.

To build a custom ad hoc query, Vanguard users select the information they need to see from a menu of options, whereby they are able to see all of the data sources they have access to, select the ones required for analysis, and build the query using business language. They then choose from a menu of Information Types, such as AP analytics, GL analytics, purchasing analytics, sales analytics, and others. Users also have an Enterprise Analytics selection that combines data from various Information Types into key performance indicators (KPI). The information requests are then translated into SQL, the correct data sources are identified, and the appropriate queries are launched, while the information is returned and displayed in a power user or business user interface, where the users can complete their analysis, and create charts, graphs, and reports.

Some examples of the business improvements, result of the above features, reportedly seen by Vanguard customers include

  • General Dynamics C4 Systems (formerly TriPoint Global Communications) discovered more than $1 million (USD) in purchase price variances (PPV) from raw material suppliers. Information from the Vanguard BI solution has enabled the company to quickly identify the variances and has provided the documentation to correct the situation.

  • LINPAC Plastics was able to execute the global strategy of inventory cost reduction. Vanguard's solution has provided total visibility into the inventory, enabling LINPAC to efficiently coordinate production with inventory levels, identify slow-moving or obsolete items, and reduce costs at one facility by $900,000 (USD).

  • Parker-Hannifin used Vanguard to develop and implement the corporate pricing strategy, and its management team uses Vanguard to communicate pricing guidelines to the global sales team and monitor their progress against objectives. The total annual savings from the program are expected to be in the millions of dollars.

Additionally, Vanguard reportedly posted a 92 percent customer support renewal rate in 2004, underscoring its ability to help customers improve decision-making and enhance profitability.

More of OEM Partnerships

At the end of 2004, Vanguard announced the continued expansion of its strategic partnership programs with the completion of an original equipment manufacturer (OEM) partnership with Exact Software, a renowned mid-market extended-ERP provider (for more info on Exact, see Exact Software—Working Diligently Towards the "One Exact" Synergy). Through this partnership, Exact will license and market Vanguard's GPS solution to current and prospective customers as Exact Business Analytics.

As one could glean from the extensive discussion above, in an effort to share information across the enterprise and identify emerging trends more quickly and accurately, mid-market business leaders are increasingly seeking BI solutions that will give their organizations a competitive edge in the marketplace. To that end, Exact Business Analytics features predefined analytics fully integrated with the Exact Macola Progression and Macola ES ERP product suites that should enable users to conduct on-line and off-line analysis, and consolidate reporting on a wide range of business processes including inventory, sales, manufacturing, distribution, and finance. Also, by integrating and displaying data from Exact applications and other open database connectivity (ODBC)-compliant sources, such as existing legacy systems and spreadsheets, Exact Business Analytics' executive dashboard capabilities should provide business users with drill-to-detail access to data.

Further, at the beginning of 2004, Vanguard announced a strategic OEM partnership agreement with former Lilly Software Associates (now part of Infor), another prominent mid-market extended-ERP provider (see Lilly Software—Product Enhancements Remain Its Order 'Du Jour'). As part of this agreement, Vanguard's GPS BI solution has been fully integrated into Infor VISUAL Enterprise solution and marketed to customers as VISUAL Business Intelligence (VBI).

In fact, last September, Lilly announced that more than 70 new customers had purchased licenses for VBI since January 2004. These manufacturers continue to increasingly face tighter production schedules, pressure to reduce inventories, aggressive customer service demands, and rapidly changing business environments, and consequently, technology investment has become vital for them to gain a competitive advantage.

These companies require a solution that promotes faster, easier access to enterprise-wide information and extensive operational control. Since integrating VBI into their VISUAL Enterprise solution, these customers have reported the ability to better interpret and analyze business data, and the power to measure, manage, and improve performance. Namely, VBI delivers clearer business performance metrics that provide insight into what is happening with revenue or operating costs and, more importantly, reveal the reasons why, allowing managers to make more profitable business decisions by planning and validating their company's strategic and tactical initiatives.

Back in 2003, Vanguard announced a partner alliance with WorkWise, a provider of the Time Critical Manufacturing (TCM) ERP application to make-to-order (MTO), repetitive, and mixed-mode manufacturers (see A User-Centric WorkWise Customer Conference). The alliance has since enabled WorkWise to offer Vanguard's GPS BI technology to its customers, with comprehensive integration to WorkWise TCM.

We believe that the above mid-market ERP vendors have chosen this strategy of partnering with a focused boutique BI vendor Vanguard because they

  • Realized they did not have the resources to develop and support, or they chose not to expend their resources in the BI direction;

  • Want an industry-focused BI solution to provide industry-specific BI "thought leadership";

  • Expect greater influence with the lesser-known boutique vendor;

  • Often find the business terms of the boutique BI vendor more in keeping with their market position and needs of their target industry;

  • The boutique vendor's solutions better fits the needs of their mid-market customers relative to technology, support cost, implementation requirements, complexity, etc.; and

  • Appreciate the more focused set of reference customers.

In addition to its Unified Information Model (that includes a suite of pre-defined information views, report templates, graphs, and performance indicators), supported by a flexible information architecture (that enables direct mapping to virtually any data source system and that dynamically combines and compares data from multiple sources and different business functions), and in addition to its above-described ad hoc analyses, personalized reports, OLAP and graphing capabilities (that can be automatically distributed or accessed via the Web), the Vanguard GPS system is extendable and scaleable for multisite, multi-currency, and multi-country operations, given its metadata model is optimized for the complexities of corporate business systems.

The system also automatically consolidates multiple currencies into home currencies for seamless reports, or allows ad hoc currency conversion to match the users' needs, while it also displays information in standard calendar timeframes or in a range of custom fiscal periods, based on the corporate reporting standard. Vanguard GPS also provides a sound application security, enabling administrators to define access down to the field level for multiple data types. Additionally, its security defines access to data-specific filters, such as sales territory, business unit, or location, and it includes a user-friendly application for security setup that does not require complex database security applications.

This concludes Part Two of a four-part note.

Part One detailed Vanguard's formula for success.

Part Three will look at direct access for the mid-market.

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