BI and GRC are Critical Tools for Information Management

Succeeding in the competitive marketplace calls for business agile IT systems and, post the slowdown, many organizations have realized this fact the hard way as they struggle to create a method out of the information madness. All these years, enterprises have invested in technology and now is the time to pay back. Many enterprises are creating predictive frameworks for businesses by leveraging their IT assets. Here comes Business Intelligence (BI), which is nothing newits been around for years. But what is new is the level of interest and expectation on the business outcomes in sync with the business objectives. Moreover with the focus on BI, organizations are leveraging Governance, Risk and Compliance (GRC) tools that signal a new trend in information management. Moreover, in the past many enterprises have taken a siloed approach to information management, and now the emphasis is on how to manipulate that information for strategy, for audit, for profitability, etc. Clearly, many organizations are revisiting their IT assets and trying to churn more business intelligent data that can take them to the next wave of growth.

Hand in GloveBI and GRC

While BI can exist without GRC, but the latter needs BI for effective results. GRC is a default entity for any progressive organization. GRC is more about credibility and being proactive, while BI feeds the GRC to seamlessly function. Industry experts say that this is the convergence point for BI and GRC, and they are a powerful combo that takes the organizations to a whole new level.

For effective functioning of GRC, it needs reporting. Here BI comes into play. I think the financial meltdown was a tipping point for the GRC market as many organizations introspected on their strategy leading to process efficiencies in terms of strategy, risk management, compliance, and governance. The deployment of GRC and BI sets the stage for effective introspection, and created a proactive business environment, says Manish Sharma, head, business user and platform group, SAP India.

According to SAP sources, BI and GRC are two critical components of its business strategy, and most of the large enterprises here use a combination of SAP solutions. The increased interest on GRC is due to the fact that risk managers and auditors face a serious challengethey lack real-time, unified visibility across various business units. Traditionally, they monitor the risks and assess controls via manual processes, such as surveys and spreadsheets sent on an annual or quarterly basis, to help them comply with and support specific regulations or corporate initiatives. But risk is not a static, predictable event. Companies today require an ongoing and automated way to identify the risks and test controls continuously, and quickly aggregate that data into a comprehensive, enterprise wide picture.

SAP says that with its solutions, enterprises can enact continuous monitoring of business risks and internal controls. Customers ability to make risk management an ongoing process, will help ensure fewer surprises and more sound business practices. Says Sharma, The core solution on this space from SAP is its BusinessObjects GRC solutions that are aimed at helping the companies make sure that the right controls are in place to help them identify and resolve product quality issues before they put both the public and the company at risk.

Lets take a look at the relevance of GRC in real-life scenarios. For instance, take the case of the food industrycompanies have manufacturing controls in place to comply with quality checks mandated by the government. Failing to comply with these regulations poses a significant risk to public safety, not to mention fines and damages to brand reputation. Today, most companies audit their inspection processes manually and on a quarterly basis. As a result, it can take months to find out if controls are still in place or effective. A GRC and BI solution can help in managing the risk indicators in a better way, and ensures that the controls are monitored continuously and automatically. For example, the solutions can help in ensuring that the end product which goes out has been adequately inspected. If an inspection is not completed, or if the quality results fall out of acceptable range, an alert is automatically sent to the operations manager so that an immediate corrective action can be taken before the product is shipped.

Sources at SAP say that its BusinessObjects GRC solutions embed its BusinessObjects BI solutions, enabling simplified reporting, dash boarding, and analytics. For risk and compliance programs to succeed, business users across the company must have access to risk information. Integrating BusinessObjects BI solutions provides a powerful way to share this data via reports and interactive dashboards. Business users can easily create, customize, and distribute a report from Crystal Reports and software or a dashboard from Xcelsius software to highlight a potential problem. Leveraging technologies like Xcelsius to build heat maps offers companies a visually powerful way to demonstrate trouble spots, such as supply chain disruptions and its potential financial impact.

Critical BI systems on top of GRC empower information workers at all levels of the enterprise by enabling them to use actionable, real-time information in their day-to-day tasks. It also empowers enterprises IT teams to continuously and effectively create and manage BI solutions for the global marketplace. From a business perspective, critical BI and GRC not only translates into more cost-effective solutions, but also results in improved productivity and agility across the enterprise. A good GRC solution enables the enterprises to consolidate BI across divisions of the organization.

Another leading player in the GRC space is RSA, which is pitching on its eGRC solutions. According to Vikas Desai, lead technology consultant, RSA India and SAARC, GRC is a critical part of enterprise IT strategy, and it provides the management with clear visibility into risk and compliances activities, and enabling governance within the organization. GRC encompasses many aspects in its ambit, and a good GRC gives a single view of the whole universe. It is that what we call as eGRC.

According to sources at RSA, no two businesses are alike. Every organization has unique processes for managing governance, risk and compliance, and retrofitting those processes to a rigid solution structure is not practical. To address the enterprise needs for point-and-click configuration, the RSA Archer eGRC Platform delivers a rich feature set that allows the business users to tailor its solutions according to the enterprises established processes and naming conventions, with no custom code.

RSA says that one of the biggest advantages of its eGRC solution is the real-time reporting analysis. Using this, enterprises can correlate and normalize risks and make informed business decisions. Moreover, they can take advantage of pre-built reports and dashboards to monitor activities and trends, and users can generate ad hoc reports to quickly access the information one needs to address the issues and complete tasks. RSA says that the reports and dashboards are tailored by the audience, so that users get exactly the information enterprises need depending on their roles and responsibilities

RSA is bullish on the GRC potential in India as it had gained considerable expertise in the space by virtue of its acquisition of Archer Technologies earlier this year. Sources in RSA say that with the regulatory environment in India evolving rapidly, it is leading to the opening up of the GRC solutions market in India. To this end, RSA has joined the Open Compliance and Ethics Group (OCEG), a non-profit organization with the mission to help companies align their GRC management activities to drive business performance and promote integrity.

If we look at Oracle, another leading BI player, in the recently concluded Oracle Open World 2010it announced a new release that allows the customers to leverage enterprise data in a better way to drive actionable insights into the core business functions. The latest version includes features like more accurate project commitment information with a more accurate picture of the real costs of the project by including commited costs in the project snapshot.

IBM is yet another key contender in the BI space. In one of the earlier interviews to Dataquest, Mark Register, vice president, information management, software group, IBM said, One of the big areas we are focusing onis making it very easy to insert scoring, predictive models and decisioning into real-time business processes. For example, if you have a process to open a new credit card account or file an insurance claim, you want to be able to get real-time risk scores on those accounts or claims based on predictive models. We want to make it extremely straightforward to insert that piece into the business processes, so that you make more intelligent decisions. Its really where we are going from a technology standpoint. The point is to make the decision support technology pervasive, so its no longer just the realm of statisticians and IT analysts.

Adoption Drivers

As we look at BI and GRC from a CIOs perspective, vendors say that they exhibit a whole deal of maturity in terms of GRC and BI. The awareness on GRC is due to the fact that enterprises are looking at it as a critical business and process enabler. The need for GRC solution is felt more now due to the ever-growing compliance and regulatory requirements. Moreover, organizations cannot survive with just BI alone, which gives a business view of things. What GRC does is that it improves internal competencies, so that BI outcomes can be achieved more easily with the organizations larger goals.

According to Farhan Khan, deputy general manager IT, Radico Khaitan, Enterprises have come to a stage where they cannot ignore BI any longer, it has become mandatory. However, before taking a plunge they need to do a lot of ground work and select a solution that best fits their requirements. Moreover, a BI rollout takes the companys IT system from a transaction to an analytical mode, and that needs lots of user training and change management for BI to function effectively.

Radico Khaitan, a leader in liquor manufacturing which has a distillery at Rampur, Uttar Pradesh and a network of 30 liquor bottlers, 4 of them company-owned, and 5 zonal offices, opted for SAPs ERP solution for a robust centralized information 7 years ago. However with the changing market scenario, the company realized the importance of analyzing the market conditions, keeping an eye on the competitors whilst consolidating business processes. With this aim, Radico Khaitan has chosen SAP Business Intelligence as well as SAP Business Process Consolidation solutions. Interestingly, their highest profit till date in Q3 has been due to the smarter adoption of technology solutions like ERP.

Across verticals BI is getting deployed with renewed vigor replacing legacy siloed prediction models. Take the case of Jet Airwaysto get one version of the truth across all business functions was a hurdle that the company wanted to overcome effectively. Information dissemination within the organization was not standardizedthere was dependency on excel sheets for conducting data analysisand reconciling numbers periodically posted a big challenge. To address these concerns, the company embarked on a BI roadmap way back in 2006, when it decided to implement the SAP Data Warehouse to generate its MIS out of the existing SAP ERP system. Towards the end of last year, the company implemented the SAP Business Objects (BO) analytical tool on top of its ERP and Data Warehouse to further increase its decision making capabilities. We wanted to have a centralized reporting structure, so that the information could be made available to the key decision makers quickly, says RN Moorthy, general manager IT, Jet Airways.

Lets look at a retail vertical, and how BI has ushered in some defined benefits. The retail industry mainly depends on intelligence on 3 fronts: merchandise (everything from product inventory to price and marketing); customer (knowing buying patterns to ensure customer loyalty), and operations (which ensure cost management and include reducing retail shrinkage due to theft by employees, shoplifting by customers, or vendor fraud). BI helps to understand and decipher different behavior patterns. Says Amit Mukherjee, group CIO and VP, IT and SCM, Spencers Retail, Deployment of BI made this entire process more role specific. Actionable data was not available to supplement the marketing and business strategies. In a dynamic market, transactional data alone is not good enough. Data had to be presented in a manner that is user friendly, easily accessible, complete, accurate, and should be available at real-time. This was the premise on which we went ahead with the deployment of BI in the organization.

Road Ahead

BI and GRC are the result of the information deluge and tons of unstructured business critical data. Both BI and GRC are increasingly playing a complimentary role. Instances like BI on Demand from SAP augurs well for enterprises of all sizes, as it will allow the enterprises to choose what they want. Moreover, BI today is not a mere dashboard driven solution; it is getting integrated with various enterprise processes and cutting across all key functions of the organization from marketing to HR to business development.

One significant trend in the last 1 year is BI getting verticalized, specifically for the needs of verticals like financial services and manufacturing among others. This signals the end of generic solutions built on certain commonly accepted best practices, and that will no longer hold good in the current competitive landscape. Experts say that the market is headed in that direction, and experts believe that accelerators and prebuilt models can significantly reduce the time-to-value given that one will see models as something that companies view as the source of their competitive advantage. There are certain things that are common to all the companies within a specific industry, but the company specific insights that one can add to a model could be a differentiator.

At the end of the day, convergence of GRC and BI is a good thing. Being more compliance driven by regulation will increase the process efficiencies in the enterprise, and insulate them from internal and external challenges. Both BI and GRC are no longer a best practice, these are the key components for large enterprises. The benefits of a good GRC and BI strategy are manifold, and organizations across the world are leveraging it to their advantage. So looking at the current dynamicswhat we are seeing is the emergence of converged solutions with BI, GRC, and Decision Support Systems (DSS), all meshed together.

Shrikanth G

shrikanthg@cybermedia.co.in