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If someone says the words business intelligence (BI) and analytics, what comes to mind? For a lot of midmarket manufacturers, the answer is cost, as in too costly to consider.
But dismissing manufacturing BI as too expensive without further inquiry is a mistake, according to several experts. Today’s BI and analytics tools are more cost effective than traditional offerings, and, more important, can yield insights that drive increased sales.
Take BGF Industries Inc., a $200 million manufacturer of woven and non-woven materials based in Greensboro, N.C. The company was experiencing quality problems with its products, which are used in everything from automotive to aircraft parts. Without a way to tell when a quality issue was looming, BGF had to hear about quality issues from its customers, which was less than ideal.
“Customers were telling us about quality problems that should never have been in the field,” said Bobby Hull, quality assurance manager for BGF.
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To remedy the situation, BGF created an early-warning system using software from a traditional BI vendor. “Now, we constantly monitor data and production trends so we can keep our quality high,” Hull said.
The new system didn’t break the bank. In fact, BGF benefited from more attractive pricing options the vendor had begun to offer through its distribution channel in recent years. The company was also able to add several lower-cost licenses to its two existing ones.
“That became feasible,” Hull said, because the vendor also included professional services at a reduced price.
The lesson? If the company is already using BI, albeit on a small scale, be sure to ask the vendor whether it can offer better pricing options. With software vendors hungry for business, now may be just the time to open that discussion.
Midmarket BI, SaaS BI seen as most affordable
Manufacturing BI comes in a variety of shapes and sizes, ranging from its ad hoc form in spreadsheets to separate reporting tools, dashboards and data mining. BI analytics may come packaged as a standalone tool or as a set of capabilities in another software application such as ERP. A third option, growing in popularity, is BI in the cloud, also known as Software as a Service (SaaS) BI.
It is true that traditional, “heavyweight” BI analytics tools are used most often by large enterprises and generally require significant investment in software, hardware and consulting. Many, if not most, companies embarking on manufacturing BI and analytics for the first time must spend serious money building a data warehouse and populating it with data for the BI tool to mine. Then there’s the expense of training. It takes serious -- that is, expensive -- analytical skills to take full advantage of traditional BI.
But Marty Carney, CEO of Texas-based BI WCI Consulting Inc., tells midmarket manufacturing clients they can now do complete BI and analytics implementations, including software, hardware and services, for $100,000 to $200,000 for a product aimed specifically at the midmarket. For a company with revenues in the $100 million-plus range, that approach may be more palatable than traditional BI rollouts, which could easily run to six figures.
Carney has also seen a spike in activity from manufacturers interested in SaaS BI. Vendors have made SaaS BI flexible, allowing users to choose whether to pay on a monthly or quarterly basis, for example. And with SaaS BI there is no need to buy hardware or individual software licenses. For companies in the early stages of exploring BI, running a pilot on SaaS is undoubtedly the least costly way to go.