What are the business benefits of BI deployments such as those implemented by Avnet and Quaker Chemical? What roles do data and business processes play in achieving those benefits?
The companies, which implement Business Intelligence (BI) systems, not only become more informed but they are also able to identify flawed business processes and improve them. We can refer to the examples of two organizations, Avnet and Quaker Chemical. The management of Avnet decided to apply BI solutions in order to improve order processing and purchasing. In particular, this software enabled them to warn customers that the products that they bought in the past will soon be discontinued.
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In turn, Quaker Chemical had to adopt BI system to change the management of accounts receivable. This application allowed them to determine which of the clients were late with their payment and for how long the accounts were overdue. BI system helped them facilitate the collection of accounts. More importantly, business intelligence system helped the management better evaluate different customers and establish closer relations with them. Overall, it is possible to say that BI applications can be regarded as tools for the analysis of quantitative data and subsequent decision-making.
Overall, BI system can greatly benefit Saudi Arabian companies. Currently, the economy of this country is becoming more diversified; it is represented by service sector, banking institutions, retailers, construction companies, real estate agencies (Ramady, 2010, p 190). BI can improve their business practices such as customer relation management (CRM), sales, and marketing. However, one should bear in mind that these software solutions are more suitable for large-scale companies that can afford to implement.
In this case, the benefits of BI systems will outweigh their costs. Smaller businesses, especially star-ups may not be able to purchase these software solutions due to budget constraints. In turn, Business intelligence system can make larger companies more informed about the new trends in the market. This is particularly important since many Saudi Arabian firms are now competing at an international level.
What are the main challenges to the change of mindset required to extend BI tools beyond mere reporting? What can companies do to overcome them? Use exam ples from tl1e case to illustrate your answer.
BI systems can yield the expected results only if the management is able to change employees’ mindset about the information and its use. The key objective of these software solutions is not to report quantitative data but to provide tools for analysis and decision-making. The key obstacle to this change is lack of cooperation between different departments of the organization, for example, between the IT department and sales personnel.
The developers of BI systems must know how different employees will use the information and what kind of decisions they will make on its basis. Provided that there is no such mutual understanding between different business units, BI applications will not be as effective as they can be. The companies try different strategies to overcome these challenges. For instance, the management of Avnet encouraged IT developers and sales managers to work closely together. As a result of this partnership, IT was able to provide more relevant and specific data which allowed salespeople to better assess different clients.
It is quite possible that Saudi Arabian Companies will need to face similar challenges. In order to ensure successful implementation of BI systems, these enterprises will need to change their management style. Saudi Arabian business culture is characterized by “centralized decision-making power culture” which means that employees are given lesser degree of autonomy or independence (Ramady, 2010, p 199).
In sharp contrast, business intelligence systems can be successfully developed and implemented only if every member of the staff is involved in this process. These people must be able to make recommendations about the functionality of the BI system and its design. Thus, one can argue that the implementation of business intelligence systems must be accompanied by changes in culture and structure of the organization. However, Saudi Arabian companies have a certain advantage. They can rely on the experience of other companies, which tried to implement BI system, and avoid their mistakes.
Both Avnet and Quaker Chemical implemented systems and processes that affect the practices of their salespeople. In which ways did the latter benefit from these new im plementations? How important was their buy-in to the success of these projects? Discuss alternative strategies for companies to foster adoption of new systems like these
As it has been identified in the case, both Avnet and Quaker Chemical adopted BI systems to help the sales managers. By using BI tools, this company was able to assess the purchasing power of different customers and improve the collection of accounts receivable. For example, they could determine which customers were constantly paying on time, or were late on the payment. Secondly, these tools showed them which clients submitted only part of the payment and which were not paying at all. In turn, this information helped them understand which of the clients were of the highest value to them.
When speaking about this project, one cannot underestimate the importance of buy-in or commitment of the stakeholders to the decision. The adoption of BI system was possible only because IT developers and salespeople worked closely together. Certainly, the management could have adopted different strategies to foster the adoption of these systems. For instance, they may have provided training to the salespeople so that they could better use BI tools. In fact, without proper training, the effectiveness of such system significantly declines. Secondly, the companies can invite outside experts who would demonstrate the benefits of BI tools, especially their relevance to every activities of the salespeople. We do not know if the management of Quaker Chemic used these strategies but they can rather productive.
Those Saudi Arabian firms, which intend to adopt Business Intelligence systems, need to consider these methods of improving the performance of personnel. Even if they develop or purchase BI tools, they need to ensure that employees are willing and able to apply them. They can be done by offering proper training to them or by allowing them to cooperate with IT department. The most important thing is that these people know how BI system can help them and why they need to use it.
Ramady M. (2010). The Saudi Arabian Economy: Policies, Achievements, and Challenges. NY: Springer.