Blue-chip companies are spending huge amounts of money on business intelligence technology. The demand for real-time reporting is now an important way for IT directors to improve the efficiency of essential business processes.

Annual growth for business intelligence software is expected to remain high, at about 7.5 per cent a year over the next five years, while researcher IDC predicts global spending to hit $12.5bn (£6.8bn) this year.

"Business intelligence is becoming a category, just like CRM or ERP. Companies are beginning to standardise on tools, and they're interested in selecting companies to provide their standards," said Gerry Cohen, chief executive at business intelligence specialist Information Builders.

But many businesses continue to buy their software from a variety of business intelligence providers, despite what many believe are clear benefits from standardisation.

That was certainly the message to emerge from Summit 2004, Information Builders' annual user conference in New Orleans last week.

Research from IDC suggests that just 25 per cent of blue-chip companies buy business intelligence software from a single supplier.

"Most companies have individual business units with their own ways of extracting data," said IDC research director Dan Vesset. "What's more, many companies have an aversion to being tied to one particular vendor."

Vesset explained that users expect to achieve a host of benefits from installing business intelligence software.

"Competitive advantage comes from the speed and accuracy of decision making and the ability to support activity monitoring so that executives can only see data that is important to them," he said.

Business intelligence also allows companies to closely audit information trails so that employees stay within the confines of legislation such as the Data Protection Act.

"If you can automate decision making, it makes compliance easier and promotes best practice," said Vesset. "This isn't just monitoring for the sake of it, it's about who is looking at what data and what they're looking at."

Best practice checklist

• Senior executives should be engaged as a sponsor.
• Projects with an application focus generate the best results. Target the project and ask users what they want.
• A staged plan should be executed: have a successful initial project to justify steps forward.
• Business users should work with IT specialists to prioritise future steps.
• Recognise the challenge in moving key people to new roles and responsibilities.

CASE STUDY: Thomson Holidays

Thomson Holidays plans to use web-based business intelligence to deliver essential information to senior mobile staff.

The project follows the implementation of a call centre system that helped the holiday company, part of the Tui Group, process more than four million passenger bookings in a single summer season alone.

"Intelligence is key to the running of the business because without it, executives couldn't make decisions," said Simon Temperton, team leader for application services at Tui. "It's helping us get the right information to the right people at the right time and place."

The company has just installed a Windows NT server that will be used to run its business intelligence projects. These projects will be completed over the next 12 months.

Thomson wants to develop reporting systems covering director-level information, customer complaints, cruise information and booking records. Until now, business reporting in these four areas has been undertaken on a mainframe or desktop PCs.

Thomson is taking on board the lessons learned from an earlier call centre deployment to provide more efficient information delivery to managers via the web.

The firm started using Information Builders' WebFOCUS business intelligence system to carry out performance measuring of call centre staff in January 2000. The system provides a web-based tool for the management and reporting of call centre information.

Success led the holiday company to consider how WebFOCUS could be used across other business processes.

"The costs of running a mainframe are expensive and we're taking advantage of the web side. The opportunity to access things through a web page is infinitely more efficient," said Temperton.

By logging on to a portal, provided by WebFOCUS, Thomson managers will be able to check business data from any location in the world. Thomson expects the rollout to other areas of the business to be pain-free.

"We've learned a lot from the work we've already done, and it's going to take a lot less time as we develop WebFOCUS for other areas of the business," he says.

CASE STUDY: General Motors Acceptance Corporation

GMAC Commercial Finance is using business intelligence technology to standardise its reporting activities, cutting the time taken to produce end-of-month management figures from two weeks to two hours.

The finance specialist, which provides loans totalling $6bn (£3.3bn) to its clients, uses business intelligence software to consolidate executive data across business units in the UK, US and Canada.

"Before we brought this information together, senior executives would come to meetings with their own specific data," said head of IT Martin Charman.

"If there's no corporate standard people will prepare for meetings with the information they have, and our executives spent more time arguing about the difference in the numbers than they did about the trends."

Charman explained that GMAC needed a way of acquiring and agreeing a set of measures for publishing standardised data. To this end, he spent $300,000 (£165,000) implementing Information Builders' WebFOCUS technology.

"We had no problem obtaining executive buy-in because they were the people that were encountering the problems," he said.

First task for Charman and his team was a data clean-up. "We went back to basics, because people had many different views of the company's data. We defined everything, such as a loan and a client," he said.

Charman and his IT colleagues started work in February 2003 and the project was ready to run 12 months later. "It took us longer to define and clean up the data than to implement the core of the system," he explained.

However, time spent on implementation has proved worthwhile. "We're now looking at the trends rather than arguing about the numbers," said Charman.

The time taken to produce vital numbers, such as end-of-month management figures, has been slashed. The company has also created a number of information analysts whose role is to interpret the business intelligence data on a regular basis.

"You need someone who's a specialist so that they can say if a number makes sense compared with a number that has been received by the company before," said Charman.

GMAC is planning to extend business intelligence to other day-to-day operations, such as risk management.