A lot goes into developing a business intelligence (BI) software system for manufacturing organizations -- data aggregation, cleansing and synchronization, plus defining metrics and creating specific targets for analysis. At the heart of any system, however, are the software and hardware that do the heavy lifting. Choosing the wrong tool guarantees a costly mistake.
For instance, there's manufacturing intelligence that focuses on real-time or near-real-time data and is designed to ensure that manufacturing processes run as efficiently as possible. Then there's more traditional business intelligence that focuses on historical transactional data that rests in various databases, which is then cubed and analyzed. And there are varied connections of everything in between.
"Certainly, the vendors in this space are trying to confuse it -- a lot of BI vendors are trying to go down to the shop floor and deal with real-time data, and it's not necessarily their traditional strength," said Matthew Littlefield, senior research director with Boston-based Aberdeen Group. Conversely, some manufacturing intelligence solution providers are looking to provide tools to help manufacturers connect and analyze their data with more business-focused systems.
There are, however, lots of tips for cutting through the hype -- here are several questions buyers will want to answer as they begin the BI tools evaluation process:
Should you write an RFP for manufacturing BI systems?
The writing of an RFP isn't the only way to solicit bids and buy solutions, but the act of writing one forces an organization to nail down what it really needs. That's a critical starting point.
"It's still good common sense that you really need to define your requirements very well -- and nobody else can do that for you," said Boris Evelson, principal analyst of BI for Cambridge, Mass.-based Forrester Research. "You have to take the time to write the requirements."
Can the BI vendor address IT and manufacturing?
Can the BI vendor speak the languages of IT as well as manufacturing operations?
"If they have that ability to talk and work collaboratively with both organizations, that's a start," Littlefield said. "I would only work with a vendor who had that ability to make those connections."
Does the BI vendor have experience in manufacturing or your particular industry vertical?
When it comes to BI tools evaluation for manufacturing-related uses, how important is industry-specific functionality?
"On a scale of 1 to 10, about a 7 or 8," said Dan Miklovic, vice president of Manufacturing Industries Advisory Services for Stamford, Conn.-based Gartner Inc. "It clearly will speed up your implementation if the solution has templates using the terminology specific to your industry, and it is always good to have access to industry-standard practice.
"However, just because a vendor has limited or minimal experience in your industry, you should not rule them out," Miklovic said. "Proximity and fit with your overall architecture are two other factors that should weigh heavily on your choice," he added.
Is your ERP vendor the best option for BI?
"Clearly, fit with your architecture is essential, and if your ERP vendor offers a solution, it should be on the short list, but it should not be the de facto choice," Miklovic said. "ERP vendors are generally broad and cross-industry and so have breadth on their side, but not always depth."
BI can be expensive -- is off-shoring a good option for manufacturing?
Aside from the politics of off-shoring, the initial stages of BI rollouts might not be a good fit for companies considering it.
"Unlike traditional software development where you can write your specification and hand it over to somebody that can be anywhere, take a couple of months and bring it back, with business intelligence, you have to be talking to a person face-to-face," Evelson said. "It's very hard to define requirements because there are multiple definitions. You have to be in the same room when business people are discussing these things. If you take notes and hand over a piece of paper, you just can't get the complete BI picture.
"Off-shoring for certain parts of BI doesn't work -- you can off-shore maintenance, support, help desk; but all the initial stages, like rapid prototyping -- these guys need to be sitting right in your office doing everything interactively," Evelson added.
What are the tradeoffs for manufacturers between larger ERP vendors and more focused BI vendors?
"It is always a challenge in that the larger ERP firms generally write good code but are not intimate with the processes," Miklovic explained. "Boutique vendors write great functionality into their products, but their software skills may not be the best."
At the same time, an industry-focused vendor might fit nicely but lack flexibility, while an ERP-based system might require more customization.
Is a BI pilot program necessary?
Odds are, companies are spending a lot of money on BI for manufacturing, and a test drive isn't just a routine tradition.
"The best approach is a robust pilot," Miklovic said. "Make the pilot rich enough to validate the claims and broad enough to encounter the most likely issues. Only upon successful completion of the pilot [should you] commit to a rollout."
Chris Maxcer is a freelance writer.