February Business Intelligence: Data Warehousing ERP Information and B-to-B E-Commerce

The global community now known as the Internet is only six years old, but its success has already significantly challenged and, in some cases, completely eradicated any concept of information control in business and societies. In an amazingly short period, the Internet’s technologies have forever changed many of the rules and processes that govern business and government.

The Internet is rapidly evolving beyond that of a global village into a virtual data warehouse and an electronic marketplace worldwide. As an enabling platform for business-to-business and business-to-consumer e-commerce, the Internet is challenging and changing traditional business models. Some countries are now considering prohibiting e-commerce, others are creating barriers to limit its success, and even in the United States there are still bastions of resistance to the rapid change and opportunity brought on by the Internet economy.

This month, we focus on one of the hottest areas of BI/DW, data warehousing ERP information for e-commerce. Our data point looks closely at what ERP information customers will be Web-enabling.

Recently, Levi Strauss & Co., a pioneer of business-to-consumer e-commerce, announced that it is scaling down its Internet retailing business. According to a National Public Radio report, the company’s e-commerce approach resulted in a significant drop in sales because it created a direct conflict with its traditional customer base of retail stores. By the time this column hits the press, there will undoubtedly be a great deal of speculation about Levi’s decision – particularly, how well-thought-out their business decision was, and whether their drop in sales was actually a result of competition and/or marketing. There is no question that being an Internet company from inception is an advantage in the Internet economy, but the key for established companies adapting to this business inflection point may be business-to-business e-commerce.

Business-to-business e-commerce and the Web-enabling of ERP information are major forces driving the growth of business intelligence and data warehousing. Our Database Solutions III report found that only one third of the survey respondents had built data warehouses with ERP data, and the remainder planned to complete the process within the next two years.

Interestingly, less than 25 percent of the respondents indicated they would purchase a data warehousing solution from an ERP vendor, nearly one third said they would develop their own, and the remainder will use independent software vendors and/or system integrators.

The decision to look beyond ERP vendors for data warehousing and e-commerce technology certainly represents an opportunity for purveyors of business intelligence and data warehousing solutions, and sends a strong message to ERP vendors.

In an effort to track this trend in data warehousing, we launched the first in a series of ERP-e-commerce surveys last fall. Although the data presented in the chart is preliminary, it represents what more than one hundred customers indicated was important for an e-commerce application. The actual question read: "Please rate the importance of providing the following ERP information in your e-commerce application."

Business-to-business e-commerce systems will place significant demands on IT and vendors as they demand new levels of scalability, performance, functionality, security and interoperability. These demands will exceed what database and data warehouse administrators are accustomed to, and will radically change how data warehousing technologies have been implemented. Many organizations will look to new and innovative BI/DW technologies, such as virtual data warehousing, to meet the increasing demands of line-of-business managers. BI/DW-e-commerce systems will be required to provide service that includes 24x7 business-to-business e-commerce. IT will be challenged to meet these requirements and many will turn to systems integrators to implement and integrate data warehousing systems with business-to-business e-commerce systems.

Enterprise Information Portals

Enterprise Information Portals (EIPs), are the latest new marketing craze in the world of business intelligence query, reporting and OLAP tools. Although the EIP market is embryonic, the concept of a well-organized corporate lens into structured and unstructured information certainly is sound. In our view, the EIP will play a major immediate role in business-to-business e-commerce, as companies provide their business partners with easy, structured and secure access to data warehoused information. As you might imagine, we are visited by new portal vendors every month and are stunned when vendors spew out EIP market forecasts exceeding revenues of $14 billion by the year 2002.

There are many unanswered questions about EIPs because of the market’s primitive state and the limited amount of customer input (i.e., primary market research). We think some of the important EIP issues revolve around the following areas:

• Providing an intuitive and easy-to-use interface

• Enterprise-intranet and Internet scalability

• Centralized administration and management

• Interoperability and access to disparate data sources

• Real-time data mining of operational data

• Organizational EIP use by user type

• Content and access to structured and unstructured information

• Collaborative functionality

Stay tuned – this is an area we are already exploring and will do a technology perception reality check on soon. Until next time, good luck data warehousing.