The Role of Business Intelligence in PLM

Business Intelligence (BI) is a fascinating combination of words. Each time I hear about BI, I’m confused a bit. The formal definition of BI is very complex. Here is the extract from Wikipedia and, in my view, it is too long to be explained to a human. You can navigate to the following Wikipedia link to read more.

Business intelligence (BI) mainly refers to computer-based techniques used in identifying, extracting,[clarification needed] and analyzing business data, such as sales revenue by products and/or departments, or by associated costs and incomes.[1]. BI technologies provide historical, current and predictive views of business operations. Common functions of business intelligence technologies are reporting, online analytical processing, analytics, data mining, process mining, complex event processing, business performance management, benchmarking, text mining and predictivepan> analytics. Business intelligence aims to support better business decision-making. Thus a BI system can be called a decision support system (DSS).[2]

For many years, I thought about BI as a reporting mechanism or set of tools. The number of vendors in this space decreased significantly after mega acquisitions that were made in this space by Oracle (Hyperion), SAP (Business Objects) and IBM (Cognos). Few more acquisitions in this space were made, but today I don’t see a dominant pure-BI player that competes with large three I mentioned above.

Is there a role BI can play in PLM? CIMdata recently published a white paper "The strategic value of Business Intelligence in PLM". The paper sponsored by eQ BI Technology – an interesting outfit playing with BI technologies in the domain of product development. The whitepaper is available for free and you can download it from CIMData website. Navigate to the following link (note- you have to be a registered user of CIMData. It is free, but I found CIMData website user experience a bit complicated). What I can learn from CIMData pages, in a nutshell, can be summarized as following.

1. To analyze information in manufacturing company is important, and it is not a simple task.
2. Decision makers need to have various types of information reports
3. Many of the available solutions in this space are complicated and not easy to deploy and use.
4. The value of a potential solution that can bring a decision-oriented information can be significant.

Here is an interesting passage from CIMData paper:

Personnel at all levels need concise, timely information tailored to their task needs, regardless of whether they are a designer, a project management or a senior executive. To address the torrent of data that is being created by multiple business systems, companies are using business intelligence and analytics solutions that provide users the right information, in the context, for their needs. This is especially important for product development and PLM. BI solutions gather, aggregate, analyze and disseminate information with historical, current and predictive views of that information to facilitate decision making.

CIMData wasn’t the only analytic company in PLM space researching Business Intelligence topic. Jim Brown ofTechClarity discussed the value of BI in PLM in his whitepaper – Business Intelligence Extending PLM value. This paper was published back in 2009, but I found it quite relevant today. Jim is talking about multiple options of BI applications that can provide a return – connecting engineering and services, improving project timeline, identify cost saving opportunities and many others. Here is a passage from Jim’s conclusion about BI:

PLM implementations have matured to a scope and state that offer significant potential value from mining the underlying data. Accessing this information can help identify exceptions, manage and improve processes, and identify strategic trends that may uncover significant insight and value.

What is my conclusion? BI is clearly addressing the right problem. However, it seems to me, the approach of BI is a bit outdated. My hunch there is a segment of BI market that will pay big money to analyze their business data. The two companies CIMData brings in their whitepaper – Lockheed Martin and ATK Space are probably these types of companies. However, for many companies’ BI – means an expensive addition to existing ERP systems (result of Oracle, SAP and IBM acquisitions). If I will try to think about BI in simple language, I’d be still using word "reporting". eQ BI (company mentioned by CIMData) is providing reporting solution for TeamCenter. To extend reporting solutions of existing PLM tools can be a reasonable next step for BI in PLM. Just my thoughts…

Best, Oleg

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7 Responses to The Role of Business Intelligence in PLM

  1. Hi Oleg,

    First-rate blog post as always!

    One of the key aspects of BI is to present information in such a way as to foster multidimensional analysis of volumes of product data to get information about the business in a more intuitive way. I was also thinking about this some time back in a blog post titled “Data Visualization/Infographics in PLM – Will it help make better decisions?” [http://puthimaas.blogspot.com/2011/08/data-visualizationinfographics-in-plm.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Puthimaas+%28puthimaas%29]

    Also I believe Visual analytics will lead to creative problem solving and faster solutions to problems will drive higher product profitability. See “Creative problem solving using Visual Analytics in Product Development” [http://puthimaas.blogspot.com/2011/09/creative-problem-solving-using-visual.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Puthimaas+%28puthimaas%29]

    Best,
    Jyotirmoy

  2. Murli Ram says:

    Oleg,
    Interesting topic. I believe Altair’s HiQube and of course excel pivot tables are in this space. What do you think about Exalead? Is it just a search tool or a BI tool?
    Thanks,
    Murli

  3. Jyotirmoy, thanks for the comment and link sharing. Visualization is a very important and interesting trend. And this is especially true when you deal with complex information presentation (like we can see in BI tools). I can see two challenges with visualization in BI – cost and real-time. So, I expect some “visualization” tools to become very valuable for BI tools focusing on historical information, rather than operational. Just my 2ct. -Oleg

  4. Murli, thanks for bringing these examples. I see Exalead as a search technology. However, I believe they can develop some BI tools. Maybe they even did it for some clients. I haven’t seen any examples. Did you? Best, Oleg

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