Dashboard Insight’s Peter Traynor recently spoke with Robert Farris, who is VP & Business Intelligence Capability Practice Leader at Hitachi Consulting and Jim Budkie, who is Hitachi Consulting’s Managing VP and they discussed product development and corporate strategy at the company.
Peter Traynor: Could you tell me what’s new at Hitachi in terms of products or new directions for the company?
Robert Farris: I’m part of our BI national team and we focus on defining our services in this space and then helping our market teams deliver. In other words, we sell and deliver. A trend I’ve noticed within our customer base is with respect to the conversations around BI. Six years ago the conversations used to be more about finance and BI was an issue that was more departmentally focused.
These days, however, everybody is talking about how to solve the information/business intelligence and performance management problem on a more enterprise-wide basis.
This trend is what is driving the demand for what we do and, in response to it, we have BICC services which are about putting out road mapping for Enterprise BI, data warehouse and performance management.
PT: Tell me more about BICC – I’m familiar with the “BI” part but what does the “CC” imply?
RF: BICC is a Gartner buzzword; it’s an acronym for Business Intelligence Competency Center but I’m not too keen on the term. It’s more about the concept of thinking about BI and data warehousing and performance management on an enterprise-wide basis and how you achieve that. And the way you achieve this is through a number of things – technology being one of seven or eight things that are important to be successful in this area.
Other things are organizational in nature such as getting your processes in place, governance, funding the initiative, how you architect it regardless of the tools since there are certain best practices on data warehousing and BI applications.
So our BICC services are really focused on that holistic feature. Clients are requesting it and we’re selling a lot of that kind of service right now.
PT: That’s interesting. Is it right to assume that Hitachi is engaged in a fair bit of partnering?
RF: We partner with most of the vendors because we’re basically technology-agnostic. For us, it’s primarily about solving the client’s problem and secondarily about what tools will be used.
The other big driver is vendor consolidation and this actually plays well into our partnering with most vendors because one of the concepts that we always talk to our clients about that are interested in this on an enterprise basis is that they need to narrow their footprint of technologies.
Having a scenario where one department did one thing with a particular tool and another department did something else with another tool will create a mess over the years. It is expensive to pay for the software maintenance and keep it running on all servers. It’s also expensive to have the expertise and, more importantly, it’s confusing to the users and creates “islands” of information which is not what an organization is trying to achieve. The organization’s goal is to have one version of the truth.
PT: Where do you see the industry going in terms of growth? I know nobody wants to use the “R” word these days. Maybe this is not a recession-proof industry but it certainly appears recession-resistant. What has Hitachi’s experience been?
RF: I think it’s too early in this downturn to tell. I don’t think we’ve lost business yet that you can claim was because of the economic downturn. That doesn’t mean that we’re not watching it; everybody’s watching to see what the impact is because you can delay some expenses and incur them at better times.
One approach that we’ve seen in the past is that sometimes when there have been market downturns, the appetite for BI actually increases because it’s all about managing your numbers. So if decision makers can have better visibility to operational expenses and to the productivity end of things, BI can help them with their cost cutting – they would know how and where to cut without doing much damage. We saw this at work when we had the downturn in late 2001; coming out of that saw a lot more focus directed toward operational costs and productivity.
PT: What about governance? Do you find that there’s a lot more emphasis on that now with your customers?
RF: Well, I don’t know if corporate governance is driving a lot yet in a sense that may be behind some of the enterprise push I mentioned earlier – where decision makers need more visibility to all the things that are going on within the company instead of having an issue or a problem localized to a particular department or a location.
PT: Sometimes even if things are turning south if you can show the shareholders, for instance, a clear picture of the company with total visibility and transparency, it assuages the problem to a certain aspect.
RF: Exactly. The visibility and transparency is important for that. Another trend that we’ve noticed is that more mid-sized companies are getting onto the Enterprise BI bandwagon. I’m not sure if this is related to what we were talking about earlier regarding a potential recession.
Some of our biggest recent clients in the last year weren’t Global 500 or Global 2000 companies; they were smaller mid-sized companies and they are spending a lot of money on Enterprise BI. This indicates that they’re taking BI very seriously and they see it as a competitive factor.
PT: So, Jim, is the SMB market something that Hitachi is pursuing?
Jim Budkie: We really don’t market per se; we see it as an opportunistic play and there are some parts of our portfolio that are really attractive to that marketplace right now. Schumacher, a client, is a perfect example.
RF: The example Jim’s referring to is a company called The Schumacher Group; they manage emergency rooms for hospitals. They’re a small-medium sized company in Louisiana and they met us at the Gartner show last year, and discussed budgeting and forecasting. We said they needed to step back and look at their overall Enterprise BI and they said we were right. And so we have a very large initiative going on with them right now.
The interesting thing about smaller and medium-sized companies is that the ones that are growing have money to spend on this; they instantly get it and they can act quickly. With the bigger companies, all the cooperation that is required to do BI causes things to move slower.
JB: That was the big contrast between two clients of ours: Toyota Financial Services and Schumacher. At Toyota, taking the same enterprise approach, the project is just really getting off the ground now after almost two years of working with the Executive Committee, finance, business cases and so forth. While in less than a year, Schumacher has already seen returns that have paid for the program.
RF: And also at Schumacher, the CEO caught the religion, realizing that this was not just about BI and visibility. This was about empowering people with the information that they need to do their jobs.
PT: SMBs are appearing more and more on the horizon as buyers, and a lot of BI solution providers are quite aggressively targeting them.
RF: That’s true and I think the vendor trends of integration and even the ascendancy of Microsoft into the BI space helps with the emergence of SMBs because the cost per user license and other associated costs are coming down. The SMBs, which used to think this space was just for the “big boys”, now realize that they can gain entry especially in terms of the vendor software licenses. Having said this, however, the majority of our work is still with large Fortune 500 companies.
PT: How do you market your solutions and how do you work with your sales force to help them out?
JB: Well, I think one key thing about marketing is that people need to hear the voice of our customer. It’s easy for anybody to stand up with a PowerPoint deck and claim whatever they want to claim, and when you’re talking about consulting engagements it’s hard to “kick the tires.” So an essential part of marketing our solutions is to prove points with real, tangible results from client activity.
The second key thing about marketing is working with organizations like Gartner, that are seen as an authoritative, objective third party source of information and getting them into a position where they become advocates as well.You don’t win deals like this through advertising and you can’t win deals by having people dialing for dollars. It’s a matter of establishing credentials and establishing them through other people, not just by what we say.
PT: Do you distinguish, in your marketing activities, between what you and the other heavyweights in the same space provide?
RF: Once again it all boils down to our claims against our competitors’ claims and customer references are key. It’s all about relationships and real-life testimonials about the customer’s experience with a particular company and what the customer thinks. That’s how we win against the bigger players.
JB: In the end when you’re talking about selling consulting it comes down to whether you have established a relationship of trust across the table. The person engaging your services is in some cases betting their career on you being able to do the job. You don’t establish your credibility by saying what the bigger players cannot do – you just prove that what you’re saying is true through your clients and through objective third parties.
PT: Are you planning any different strategies or are you pretty much in execution phase now, with a plan to keep doing what you’re good at?
RF: Some trends are not changing what we do; instead they are just adding more new things to think about within what we do.
PT: One of the growing trends is the offshore model and the fact that it seems like there are a lot of efficiencies that could be captured. What are your thoughts on this?
RF: Historically, and I mean only about three years ago, I hardly heard anybody talking about it. Now people are looking at how they can do that in BI. We now have some experience of having done it successfully and we can see how other companies have done it – with a do’s and don’ts list. There are things about BI, however, that I think you cannot do offshore. BI implementations tend to involve a lot of involvement with people in various business groups – what information they want, and how do they think about it and even reviewing prototypes of OLAP cubes, reports and so forth.
We’ve been more successful with offshoring things like ETL development which, once you design it all, is almost just a coding exercise. However, issues like OLAP development as well as report development seem harder and we’ve done that on a very small scale.
PT: Is there anything else either of you would like to add?
RF: In terms of technologies, I hear more wondering about Open Source but I haven’t seen a lot of clients using it. It is an interesting trend to watch but I’m not seeing it impact our day-to-day life. We’re still doing lots of implementations with the big vendors – Oracle, Hyperion, SAP, Business Objects, Microsoft, and Informatica.
PT: Gentlemen, this has been very illuminating. Thank you both for your time. It was a pleasure speaking with you.
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