Commercial Open Source – a strategy for success for Business Intelligence (BI)

According to the TNS EMNID survey issued on behalf of PricewaterhouseCoopers in 2007, more than 50% of the 250 polled medium- and large-size companies generate management reports manually or semi-automatically – a process that is both inefficient and a great source of errors. The survey shows: not all software products meet the demanding and frequently shifting requirements concerning data preparation and presentation.

Every second organization chooses the error-prone, slow and cost-intensive manual method over BI tools, and at closer examination, the following conclusions can be made: BI systems that meet demanding and heavily changing requirements are usually costly with regard to license cost, development and implementation. Most of those systems are highly complex and difficult to handle; they don’t offer the usability expected. However, businesses are not willing to let a software system dictate their processes and KPIs; with good reason they expect the solution to be flexible and easy to customize – without particular expert know-how and lengthy implementation projects.

The global BI market is undergoing a transformation; the dynamic industry is characterized by numerous mergers and acquisitions. In an uncertain environment of suppliers, users have started to search for alternatives that accommodate their requirements and that provide maximum flexibility in regards to their investments. This opens the stage for innovative providers with new business models. One such example is Jedox AG in Freiburg/Germany, a company that has taken root in the BI market with its Commercial Open Source Business Intelligence concept. Their BI tools are not only given preference to by medium-sized companies, but due to integration and cost advantages, also by large-scale customers such as Otto, KarstadtQuelle, ALTANA/Nycomed or Bayer Schering.

End User Solutions

Jedox’ target group are management and end users of business departments such as Controlling, Sales or Finance of any type of industry, worldwide. Core product of the Jedox BI suite is the OLAP-Server Palo. Palo is an in-memory OLAP database and with real-time write-back functionality, facilitates the secure and fast execution of BI processes such as planning, reporting, consolidation and analysis via the web.

Jedox customers value the software because it is easy to use and suitable for end users of any functional department. Design, development and maintenance of Palo-based BI systems can, for the most part, be carried out by functional departments, and will in turn generate positive effects cost- and time-factor-wise (time-to-solution).

While traditional BI systems normally require IT specialists to handle design, data import and administration, Palo is based on Excel, the business user’s popular tool. In practice, Excel is only used as the client; data are centrally and consistently stored on Palo Server thereby avoiding the dreaded Excel chaos. Palo is based on a slender and cost-effective technology, which can be modelled by functional departments independently – just like Excel tables.

With MS Excel as front end and development tool at the same time, Jedox products allow business end users to stay on familiar ground. They are able to independently implement web applications for planning, analysis and reporting and use their local Excel installation or Web browser to access the analysis data. Which expands the scope of business departments considerably: If the responsibility for the implementation is with Controlling, Sales, Marketing or with Human Resources, BI projects are driven by their own requirements and do not depend on technical restrictions, IT budgets or organizational lead time needed for system adjustments.

Open Source – Licence Model of the Future

With its products and services around Palo, Jedox pursues a BI strategy which has already been successful in other IT areas: the establishment of Commercial Open Source Business Intelligence based on a combination of Open Source and Closed Source software. The core product Palo OLAP Server is an Open Source solution, which is available without license cost. With the Palo Enterprise Server Suite, Jedox offers commercially licensed software that extends Palo by functionalities for the purpose of process control, compliance and Excel-to-Web. Consulting and support services are available and help users to obtain the necessary confidence in using Palo for business-crucial processes.

Palo makes the introduction of BI applications much easier. With Palo, the users may directly enter into their BI project without the investment risk imposed by license costs. While traditional BI systems are usually limited to a small circle of users due to high license fees, Palo may be installed on any desired number of servers and clients. Therefore, it is possible to roll-out a project without major budget discussions even if many workstations are involved.

Jedox believes in the power of innovation of Open Source. The company’s development team seeks constant exchange with customers and users and accepts suggestions. Furthermore, the “ Deutsche Forschungsgemeinschaft“ (German Research Foundation) supports a joint research project by Jedox and the Albert-Ludwigs-University for the development of a multiprocessor-enabled 64 bit-architecture using Palo as an example. A worldwide unparalleled competency center for OLAP/In-Memory has been established.

Acceptance of Open Source in a Professional Environment

The combination of free and commercial software along with innovative license models will provide significant benefits – because of the high technical innovation standard, the cost-effectiveness and the minimal investment risk even for large-scale projects. Customers obtain a technically excellent solution along with a maximum possible leeway in their decision-making in terms of the investments made.

The study „Open Source: The Next Disruptive IT Influence“ by the US market research firm Saugatuck Technology confirms that Open Source software will increasingly be found in all IT areas of a corporation. The market researchers questioned approx. 200 business and IT executives of various trades and conducted numerous one-on-one interviews with Open Source users. The study shows that Open Source products play a part in almost half of the decisions made on business software purchases, today already. Further, acceptance and distribution of Open Source software is carried out in three phases: From tentative steps (“Early Adoption” in specific IT fields (2006) through broad acceptance in business-crucial areas (“Core IT Acceptance”) (2008) right up to a general presence of Open Source components in end-user and manufacturer companies (2010).

Case Study: Reporting-Portal with Open Source Software at Quelle

A perfect example for the implementation of a corporate-wide reporting solution with Jedox products is Quelle. The project which is introduced in the following chapter received at CeBIT 2008 the Best Practice Award for their Business Intelligence solution.

Quelle, based in Fuerth/Bavaria, with its main, special and monthly catalogues, a regionwide distribution center and the internet shop www.quelle.de, is one of the most successful multichannel providers in Europe and a leading German online-trader. Together with the distributors of the Primondo Specialty Group, Primondo Management-Service GmbH, the Logistik- and the Quelle Contact-Gesellschaft, the Quelle GmbH forms the segment mail order business of the Arcandor AG (Essen).

Quelle’s reporting system depicts complex business-related and procedural coherencies. Executive Board, Category Management, Marketing, Public Relations, Sales and Supply Chain Management rely on receiving control-relevant information when needed. A detailed breakdown is required for key performance figures such as demand, turnover, delivery capacity etc. At the same time, the information is to be conveniently accessible and harmonized in content. The existing, over the years greatly expanded reporting system in Excel could no longer meet these requirements. It was therefore Quelle’s objective to replace the existing system in a cost-effective manner and to transfer it into a web-based reporting tool which would have to be able to retrieve data from various source systems, user-friendly and highly performant.

Standard Reports and Editorial Work as an Online Paper

To realize this type of reporting, the project team opted for the Jedox Worksheet Server. The initiator of the project, ERP Information Management, tested the product extensively. With Worksheet Server using MS Excel and its functionalities as a tool to model web applications, it was possible to expeditiously build a comprehensive Web Reporting application. Moreover, depending on business requirements, the solution allows future additions and changes on a day-to-day basis, without requirements specification and IT expert know-how.

Richard Vizethum, Head of Information Management, explains: “Important criteria have been met. Very often, we only have a few hours to prepare and structure specific reports. This task must be easy to handle, without intricateness. It was in our best interest to use a tool familiar to us, Excel. The objective was to expand the individual reporting applications of our operational departments without losing time in specifying the requirements.“ Data connectivity was another criteria speaking in favour of the solution. Data Marts on the basis of MySQL, Palo, SAS, Oracle and Access form the data basis for the individual report cluster.

The current Web Reporting is used to analyze over 400 advertising media. More than 1,000,000 pictures of articles and catalogue pages have to be linked with relevant business data, all the way down to product level. The visualization now helps to recognize even less conspicuous coherencies. By analyzing page ranges it is possible to e.g. work out optimization potentials for future advertising media, and that, in direct communication between Marketing, Advertising and Category-Management. Worksheet Server links data from various source systems. One special feature is the connection of Worksheet Server with a Wiki-Server, which provides editorially processed material and background information. The portal to the reports and background information is the Online Paper, built with Typo3.

High User Acceptance and Communication Improvement

Presently, a 500-concurrent-user-version of Worksheet Server is used and up to 200 subscribers are logging into the Online Paper every day. The number of users per month is increasing exponentially. Users from various departments in Germany and abroad access these uniform reports and analyses of the online paper with their web browser. An additional plan is to distribute particular key figures via SMS/MMS or Palm/Blackberry. The editorial department ensures up-to-date information. This innovative form of reporting has lifted the boundaries between departments and has clearly improved communication. The exponential increase of subscribers, i.e. users, has validated the concept.

About Jedox

Jedox is one of the world’s leading suppliers of Open Source based planning, analysis and reporting solutions. With their Palo Server (Open Source) as well as their Worksheet Server, which is based on Open Source technologies, Jedox provides a solution for so-called Enterprise Spreadsheets. Enterprise Spreadsheets convert Excel applications into corporate-wide Business Intelligence solutions and they ensure a consistent data model for all spreadsheets throughout a corporation. Their core product Palo is available free of charge at www.palo.net .
More than 50 employees are currently working at Jedox in Freiburg, Germany, and due to the recent developments, the staff count will continue to be increased substantially.