Business Objects bolsters supply chain product suite
Written by Ian Jacobs
Already one of the acknowledged top dogs in the general business intelligence market, Business Objects has been trying to expand its presence with pre-built analytical tools and horizontal groupings of its technology. It has been pushing a supply chain-focused BI suite, but that product lacked real bite. Now the company has added three new modules to the suite that greatly punch up the product's strengths.
THE MESSAGE : Supply chain-dependent companies are crying out for more insight into their processes. Business Objects, already playing well with the types of companies that invest heavily in supply chain software, is fleshing out its analytic suite focusing on the SCM field with new tools for overall planning, manufacturing and managing returns.
COMPETITIVE LANDSCAPE : It is now almost impossible to say Business Objects without automatically adding Cognos to the sentence. The two companies are by far the largest publicly traded BI vendors. The company must also face down rivals such as Informatica, Ascential, SAS and Actuate. Because of supply chain and manufacturing focus of this particular suite, the company might also create some friction with vendors in this space including Baan and SAP.
THE451 TAKE : Business Objects has long had size on its side without always having the greatest technology to back up its pitches to enterprise accounts. These modules make the supply chain suite significantly more useful than it was previously and could help the company break into some new spaces.
PRODUCTS : Business Objects breaks down supply chain functionality into a series of tasks that it can provide insight into. These include orders, procurement, production, delivery and returns. To flesh out its Supply Chain Intelligence suite to offer analytical insight into all these areas, the company has added three new modules: Plan, Make and Return. The company already had tools for the source and deliver processes.
The Plan module takes the highest-level view of the supply chain process. The tool is aimed at helping companies analyze the speed and flexibility of the overall supply chain - and more importantly, to finger areas where a company would have some spare capacity that can be used for great profitability. The module helps companies monitor costs, check asset utilization and analyze inventory levels. It also tackles more nitty-gritty problems such as tracking inventory deterioration and the costs related to shrinkage and damages to see their impact on costs and ability to meet demand.
The Make module concentrates on the manufacturing element of the supply chain. Business Objects has been pumping up the volume of pre-built analytics in its arsenal - a way to counter charges that the products are both too hard to use and aimed solely at analytical super-users. This module is an example of where those pre-built tools come into play. The pre-built section of the Make module is designed to help managers identify where unplanned downtime, quality issues or poor scheduling could be harming throughput and costs. These are the types of reports that would usually take an analyst at a customer quite a while to assemble - and Business Objects would add that this period does not factor in the time for politicking and other activities needed to even get the analyst to work on the report in the first place.
The final module, officially called Return Analytics, gives managers analyses of reasons for returns, the value of returns and disposal choices and costs. Although the product is called Returns, one of its prime functions is to actually minimize returns by improving customer and supplier management and optimize their return supply-chain performance.
These modules really flesh out what used to be a skeleton of a suite, and with them in place, Business Objects can begin to hone its message around the growing supply chain opportunity.
As with the company's other products, all of these modules incorporate the Supply Chain Council's SCOR standard. This provides standard terminology, common metrics, associated benchmarks, and best practices for supply chain management.
COMPETITION : In these endeavors, as in essentially all of its business, Business Objects faces several rivals from the traditional BI and query-reporting crowd. The most familiar competitor would be Cognos, a company that has mirrored Business Objects' increasing focus on pre-packaged analytics. Despite that traditional rivalry, both companies are often ranked with Informatica, Ascential, SAS, Actuate, Crystal and MicroStrategy. Because the supply chain and manufacturing vendors themselves claim to offer some of this functionality, players such as Baan and SAP could also end up in the mix. Existing partnerships with these vendors should help minimize any friction.
Despite all of these company's best marketing efforts, most enterprise accounts seem to be discovering that no single vendor can sate all of their BI needs. The analytics market has yet to ignite - just look at Informatica's endless struggle to gets its applications business aloft - and the market for supply chain analytics is even more unproven.
FINANCIAL : Life hasn't been a basket of summer peaches for Business Objects of late, but it hasn't been as foul as many other software players' experiences. Earlier this month, the company revealed some minor job cuts in Europe - about 60 positions eliminated - to reduce costs. Those jobs account for only about 4% of the company's presence in Europe, but they signal a bit of a retreat as that region slows down its tech spending.
The company also expects to hit its guidance for second-quarter revenue, in the range of $108-110m. A figure in that range would be slightly up from last quarter's total of $107.5m and the year-ago period's figure of $101.5m. Two years ago, such minimal growth would be a clear indication of problems a-brewing. These days, eking out even that minute expansion is seen as a fairly major indication of strength.
STRENGTHS : Business Objects is clearly in one of the leadership slots in the BI market and therefore should have a major leg up in the analytics space.
WEAKNESSES : The company must overcome years of focusing on analysts and make its products more accessible to the workaday managerial staff if it is to truly crack the analytics nut.
OPPORTUNITIES : Analytics in general remains a market waiting to happen - to say nothing of the nascent nature of supply chain analytics. But the volumes of data being generated will require the acquisition of new tools to analyze it, deliver it widely and use it effectively.
THREATS : If there is money to be had, Cognos will start throwing OLAP cubes at the market. Eventually, the supply chain vendors themselves will also need to have either their own products or partnerships to provide this type of functionality.
