SEATTLE, Oct. 6, 2008 — Flying by the seat of one’s pants won’t cut it in today’s world of business. Decisions need to be strictly data-driven — nowhere more so than in one of the world’s leading pharmaceutical companies, which relies on smart, informed decision-making to bring lifesaving vaccines and medication to billions worldwide. Accordingly, New Jersey-based Merck & Co., Inc., decided four years ago to roll out business intelligence (BI) capabilities in its Merck Research Laboratories division to ensure that the company’s people always had the best, most strategic information with which to make business decisions.
The challenge was that the pricey system Merck Research Labs originally invested in proved to be labor-intensive and convoluted, needing its own cadre of dedicated experts just to administer it and taking impossibly long to spit out data that executives sought, which forced the company to pass up valuable business opportunities.
“When we asked for a new report, it would turn into a development project,” says George J. Carlin, director of business integration at Merck Research Labs. “Just a single rows-and-columns report would sometimes take up to nine months to get.”
In the fast-paced competitive environment Merck faces, that was unacceptable, says Carlin.
The information explosion
Data-crunching BI software gives businesses a window into their operations. Analytics and reporting tools slice and dice data, crystallizing trends, patterns and anomalies that yield invaluable business insights and drive intelligent decision-making. With BI, firms can intelligently prioritize activities, pinpoint where attention is needed, zero in on opportunities and monitor how they are tracking against performance objectives.
Such capabilities are coveted amid an explosion of data that has made information the essential currency of business and the ability to nimbly act on it a precious source of competitive advantage, as projected demand for BI solutions attests: Gartner forecasts that sales of BI platforms will grow by 8 percent this year and an average of 8.1 percent through 2012.1
But despite BI’s compelling business value, Merck Research Labs woes corresponded uncomfortably to complaints all too often leveled against BI: onerous management overheads that tie up precious IT resources, and prohibitive complexity that confines usage to a narrow cast of experts, leading BI’s benefits to be massively underutilized.
For frustrated Merck managers enough was enough. At the end of 2006, they decided to look at alternatives, opting to pit their incumbent vendor against Microsoft’s BI solution in a head-to-head competition.
Microsoft’s comprehensive, fully integrated BI platform includes Microsoft Office SharePoint Server for group and organization-wide BI, and Microsoft Office Excel and other Office applications for individual BI. Microsoft SQL Server provides the data management and analysis platform, and Microsoft Office Performance Point Server delivers powerful performance management capabilities.
To weigh the solutions’ respective merits, Merck managers compared their performance on 10 “business use cases” representing common usage scenarios and real-life business processes mapped out by information workers themselves, with real-life end users on hand to put them through their paces.
The answers Merck sought from the exercise were simple, says Carlin. “We wanted to see if the functionality could meet all our needs, how long this took and how much it cost. We were looking for maximum functionality at minimum cost.”
The results were emphatic. Microsoft emerged as the hands-down winner, accomplishing all 10 challenges within four weeks.
The other solution? “It managed three out of 10,” says Carlin. As for the remaining seven tasks, “We gave up after six months.”
The Microsoft BI solution gave Merck immediate relief from the headaches it had been experiencing with its previous solution — and at a fraction of the cost, said Carlin, an increasingly critical consideration in the current financial climate.
Today, the system counts 3,000 users and rising across Merck’s Research Labs’ global operations, and other divisions within the multinational company are now sizing it up for prospective rollout.
Merck is in the vanguard of a growing wave of companies embracing Microsoft’s BI platform. In 2007, sales of Microsoft’s BI tools spiked by 15.6 percent to US$555 million, outpacing the overall industry growth rate and ranking Microsoft as the fifth-largest BI vendor, according to analyst firm IDC.2
Adoption of SQL Server 2008, released in August, has been especially brisk. More than 1,350 applications based on the platform are already under development by more than 1,000 independent software vendors (ISVs); early customers include Acosta Inc., Clalit Health Services, Hilton Hotels Corp. and Xerox Corp. Looking ahead, Microsoft’s data platform is likely to become more attractive still to large-scale enterprises, thanks to the recent acquisitions of large-volume, high-performance data warehouse application vendor DATAllegro and data quality specialist Zoomix — moves wholeheartedly endorsed by Microsoft BI partner Hitachi Consulting.
“Microsoft continues to be aggressive in adding massive scalability to its enterprise data warehouse capabilities with the acquisition of DATAllegro,” says Todd Price, managing vice president for BI and Performance Management National Practice at Hitachi Consulting. “Hitachi Consulting’s Enterprise Data Warehouse practice will be an active partner in this new product direction as well.”
Earlier this year, Microsoft was placed in the Leaders Quadrant in Gartner’s BI Platforms Magic Quadrant, an accolade it also received in Gartner’s data warehouse database management systems Magic Quadrant in 2007.3
Such momentum is a vindication of the company’s vision for truly pervasive enterprise-wide BI, says Microsoft Business Intelligence Senior Marketing Director Bob Lokken.
“It’s all about having a more expansive vision for BI, thinking bigger and enabling businesses to get smarter and reap the full performance-enhancing benefits of BI across their ranks,” he says. “BI has this reputation for being forbiddingly complex, eating up IT resources and shutting out regular business users, and it just doesn’t need to be this way — especially when the rewards BI can bring are so profound.
“We’ve set out to remove the barriers to usage and rid BI of this unnecessary, restrictive baggage, open up access beyond the chosen few, and place BI in the hands of the people — those managing lines of business, out in the field or at the customer interface making decisions — where it can really work its magic,” Lokken adds. “We’ve made it far easier to use — something that anyone with a basic grounding in Office can pick up on the fly and easily incorporate into their everyday tasks.”
BI that works the way real people do
Indeed, Merck found it was able to take advantage of an existing knowledge base among employees as users of Office, whose look and feel Microsoft’s BI tools emulate by design — making them a no-brainer for end-users to pick up, says Carlin.
“Everyone felt they were looking at something familiar,” Carlin says.
The easy onramp for users yielded significant financial and time savings, enabling Merck to get people up to speed rapidly and ramp up adoption business-wide at minimal expense, avoiding the costly, protracted lead time needed to master complex rival offerings.
Embedding BI capabilities inside the everyday productivity tools information workers already use is an approach that resonates with Microsoft partners too.
“Microsoft’s product platform functionality for end users is excellent,” says Price of Hitachi Consulting. “The cost for enterprise-wide deployment is extremely attractive, and integration with Office applications and mobile users enables creative solutions that deliver BI impact where employees need to make decisions.”
“BI for the masses”
User-friendliness holds the key to ensuring BI is broadly adopted across the enterprise, adds Lokken.
“The scenarios in which BI delivers value abound,” he says. “For customer support representatives, BI can generate information that helps them make smarter decisions about cross-selling and up-selling opportunities, whereas sales directors can gain visibility into the pipeline and prioritize their efforts accordingly. The applications of BI are really endless and we’re dedicated to unlocking these enterprise-wide.”
Carlin and his co-workers have coined their own phrase for this capability. “We call it BI for the masses,” he says. “We’ve found it most effective to have power business users, who are most knowledgeable about the data, use the Microsoft tools themselves to configure their own BI reports, cubes and objects. We’ve been able to basically push [this functionality] down from subject matter experts to business users.”
Empowering information workers to create their own BI assets without relying on IT frees up IT staff, in turn, to elevate their focus to higher-order, more valuable activities, adds Carlin.
The ability to put BI capabilities directly in the hands of operational staff made all the difference in a quandary Merck faced with employees’ time reporting. While there was a 95 percent compliance rate in terms of people filling out time sheets, the company suspected the reliability of the information supplied was lower. The problem was that senior managers lacked the means to verify it because they were too removed from the everyday work of these employees.
It represented a business problem of the highest order, Carlin explains. “Merck Research Labs looks to [this data] to inform business decisions [affecting] the operation of the company.”
The challenge was to get the necessary tools out to the immediate managers of these employees — something the previous solution hadn’t permitted. “Individual supervisors would know intimately what their people should be working on and could say [with assurance] that they are [entering] their time against the right thing,” he explains.
“[Using Microsoft’s BI tools], we were able to quickly configure a report that could be pushed out weekly via electronic alert to all supervisors. Embedded in the e-mail would be a scorecard for both compliance and accuracy that would enable them to see exactly what projects and activities their direct reports were charging to.”
Merck was also able to harness synergies between the integrated tools within the Microsoft BI solution, adds Carlin.
“Supervisors can communicate with their employees through SharePoint and say, ‘OK, you charged against this project, but you’re supposed to be charging this project,’ so there’s a real-time [feedback] loop.”
Within eight weeks of implementing the Microsoft-enabled process, Merck had achieved its desired accuracy in time reporting, Carlin says.
He predicts BI will become “like oxygen” to companies as they seek to get smarter in their decision-making, run a tighter ship and seize opportunities. Within Merck Research Labs, he says, “I think it’s safe to say that for all new strategic initiatives where we need to move at mach speed and get data to inform decisions in real time, we’ll be using this platform.”
And if you’re wondering how long it takes Merck now to produce the report that used to take its old BI vendor nine months to turn around: “Now we can get that same report in less than nine hours,” says Carlin.
1 Forecast: Business Intelligence Platforms, Worldwide, 2007-2012. Author: Dan Sommer. March 14, 2008.
2 Worldwide Business Intelligence Tools 2007 Vendor Shares: Query, Reporting, and Analysis, and Advanced Analytics Markets Stable in the Face of Economic Turmoil. Authors: Dan Vesset, Brian McDonough. June 2008.
3 The Magic Quadrants are copyrighted 2007 and 2008 by Gartner Inc. and are reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner’s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the “Leaders” quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability