Description
Business Intelligence Solution For Romanian Smes Associated In A Network Business Environment
U.P.B. Sci. Bull., Series D, Vol. 77, Iss. 4, 2015 ISSN 1454-2358
BUSINESS INTELLIGENCE SOLUTION FOR ROMANIAN
SMES ASSOCIATED IN A NETWORK BUSINESS
ENVIRONMENT
Marian GHEORGHE
1
, Rocsana ?ONI? (BUCEA-MANEA)
2
The academic community, the researchers, the specialists, they all sustain
Business Intelligence solutions as the best method in processing data as results from
the literature review. In this article we made a literature review of possible Business
Intelligence (BI) solutions that might be adopted by Small Medium Size Enterprises
(SMEs). As a case study we created a data structure with Romanian SMEs
economic-financial data and made a financial analysis for a SMEs using Qlik View
BI on that structure. The analysis is easier if SMEs gather in a network business
environment using a platform as a service.
Keywords: Business Intelligence, SMEs, open source, data structure, dashboard,
KPI.
1. Introduction
Today the SMEs feel the pressure of competition, of economic crisis and
big volume of data processing. The variety of data format and difficulty of
processing determine the experts to design appropriate software to help
entrepreneurs to make well informed decisions. The most popular and efficient
solutions for processing big volume of data nowadays are Business Intelligence
(BI) solutions. In this paper we reviewed the literature regarding BI solution and
we chosen QlikView BI. We designed a data structure with Romanian SMEs
economic-financial data and processed these data with QlikView.
2. Research methodology
For this application we decided to study the literature with the focus on BI.
Our study has 5 steps:
1. Defining the research questions to answer: What BI means and what
problems solves?, What BI solutions the market offer?, Which BI solution is
better for SMEs?;
1
Prof., University POLITEHNICA of Bucharest, Romania
2
PhD. student, University POLITEHNICA of Bucharest, Romania, e-mail:
[email protected]
358 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
2. Choosing databases to search articles, chapters’ books and scratch. In
this respect we have chosen Web of Science, EBSCOhost, IS journals and IS
conference proceedings;
3. Screening papers and extracting information that might be transformed
in knowledge. There have been chosen only materials published after 2012. For
the selection we asked several keywords, such as: “Business Intelligence &
Analytics”, “Business Intelligence”, “BI trend”, ”BI for SMEs”, etc.;
4. Designing a data structure in Oracle Sql Developer, version 4.0.1, 2014.
The data structure contain information regarding Romanian SMEs: name, contact
information, activity’ domain (CAEN: Classification of Activities in the National
Economy), economic-financial data (assets, liabilities, equity, debt, stocks, net
income, total expenses, turnover, profit, number of employees, etc. on a period of
2006-2013; The data were taken from the Romanian Finance Ministry - Tax
Information and balances:http://www.mfinante.ro/, where there were no data
available for 2014 and 2015).
5. Choosing on BI solution and apply it in relation with the SMEs data
structure in order to obtain dashboards, dynamic report.
3. Literature review
3.1. What BI means and what problems solve?
“Business Intelligence (BI) is a term that defines a set of informatics
applications with economical background, used into companies to analyze data in
order to transform them into information that will be the base of decisions taken
by managers.” [1]
“Business intelligence & analytics (BI&A) has evolved to become a
foundational cornerstone of enterprise decision support. BI&A adoption, firms are
increasingly adopting BI&A technologies like dashboards, adhoc query and
interactive visualization etc. to support decision-making.” [2]
In the latest years, when the big volume of data processing is more
necessary, the BI&A has arisen the interest among academics and researchers,
too. They came with different solution for improving BI&A features.
Modern BI have to be available on mobile, allow self-service and
collaborative environment. The BI available on mobile has to provide
functionality for all of the multitouch gestures, such as mobile interface do, has to
provide ability to utilize the information capture for QR codes, accelerometer
data, bar code readers, and speech recognition. In the self-service BI rudimentary
actions that would be taken based on a shallow view of data have already been
thought of and taken in these environments. Those actions have been built into the
environment, along with the standard business rules needed by the analyst. The
user has to do more technical interactive analysis. The modern BI has to include
Business intelligence solution for Romanian SMEs […] a network business environment 359
methods of collaboration such as discussion forum or workflow component,
allowing cooperation between company members, to fundament and interpret data
and reach correct conclusions, [3]
The Business Intelligence Environment, [4]: “The BI environment
incorporates a spectrum of capabilities ranging from the operational aspects
including data extraction, data integration, parsing and standardization, and data
cleansing and validation, all the way to the analytical parts including data
warehouse platforms, analytics tools, OLAP cubes, data mining, presentation
schemes, and visualization methods for creating scorecards, dashboards, and other
types of visualizations, graphical presentations, and mashups.”
Business Intelligence solutions are provided with tools and techniques that
help entrepreneurs to analyze, understand and foresee complex business
situations. BI tools allow entrepreneurs to make decision in real time having in
front the entire panoply of situations that the business was or may confront. This
panorama is of crucial importance in periods of financial and economic crisis and
in very competitive environment such as the one faced by the actual SMEs. BI
tools help companies to reach their goals, such as improved productivity, lower
costs, reliable performance, reductions in paperwork, saving time etc. [5; 6]. BI
solution allows entrepreneurs extract useful information and transform it in
knowledge, from the constantly growing volumes of digital data, increasing
revenues, by decreasing costs, and increasing productivity. BI tools bring the
opportunity to calculate Key Performance Indicators, to make complex analysis,
such as What-If. BI systems are very important in respecting the agreements with
customers, efficient communication with them and in real time. [7].
From the technical point of view a Business Intelligence solution BI
includes: [8] a) Data warehousing - architecture, modeling, storage, managing,
data processing; b) ETL process extracting, transforming, loading and data
integration; c) Implementation of reports, data visualization, dashboards, d)
Online Analytical Processing OLAP and multidimensional data analysis; e) Data
mining, statistical analysis, forecast
One of BI shortcomings, that the literature review reveals [9] and we
consider important, is a strong focus on structured, enterprise-internal data, but
lack the capability of integrating external and/or unstructured information in an
easy, (near) real-time and effective way. Thus, some useful information can be
lost and affect the business panorama that can be followed by wrong business
decisions. This shortcoming can be exceeded if the SMEs form a Network
Business Environment, based on Cloud technology, where the information is free
and available for all the environment members.
An interesting feature of modern BI in the era of big volume of data to be
processed is transforming ETL (Extract, Transform, and Load) process in ELTA
(Extract, Load, Transform and Analyze) process. ELTA offer more flexibility in
360 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
reflecting environmental changes and short the time BI solutions are
implemented. The transformation over the date is done after the loading process,
according to the business needs. Usually the data is extracted from heterogeneous
sources in heterogeneous formats, then stored in a new data structure and then
transformed accordingly to the needs of business in which is made the decision.
The new process called Analyze imply using transformed data in statistical,
economical etc model in order to capture new, interesting, unsuspected features of
the business. These data can be used in forecasts, what-if analyses etc.
From the designer and maintainer perspective the BI solutions have to
offer an infrastructure for information and management support, have to be safety
reliable, and easy to maintain. From the customer perspective the BI solutions
have to offer information in real-time, has to be practically, friendly and
economic. BI solutions have to help managers in the process of decision-making,
customer identification, reduce costs, offer a innovative business model and offer
external communication (sharing, leading, cost-effective and offer quality
information) [10]
From the Marketing perspective BIS has to process data regarding: [11] a)
People (demographics, social networks, customer review, click stream, survey
data); b) Product (characteristics, category, customer data, survey data); c)
Promotion (data regarding promotion campaigns, survey data); d) Price
(transactions, survey data); e) Place (location based social networks, survey data)
As methods to analyze these data we can mention: clustering,
classification, association, regression, collaborative filtering.
In [12], the way SMEs use BI from ERP systems is analyzed. The study
shows that SMEs do not take full advantage of the business intelligence
capabilities. That result may indicate the lack of economies of knowledge, and the
under-utilization of the capabilities of the ERP system, resulting to poor ROI, and
less efficient management and marketing decisions, that are critical in times of
crisis. However, as expected the perceptions of the advantages emanating from the
implementation of ERP systems are highly and positively correlated with the
perceptions of business intelligence capabilities that the system delivers.
Proprieties of BI reports are:
- Ease to use: BI reports are intuitive, allows discovering new information
through graphical representations and they are dynamic: it can be changed with
multiple filters, drill-down or drill-up operations.
- Flexible: BI reports can be designed under different types of operating
systems and different versions, and under multiple types of databases.
- Easy to customize: BI reports can be designed as the user need, he can
choose the parameters the graphic representations, the objects to drag in report
(list box, multi box, statistics box, search box, input box, container, buttons, lines,
etc) in order to meet each user requirements
Business intelligence solution for Romanian SMEs […] a network business environment 361
- Data security: The database can be encrypted with different algorithms
such as RSA and AES, and the admin can create different roles for de end-users
and to share only what is necessary. As well each BI report page can be encrypted
- Trend: in the era of big volume of data to be processed the BI solutions
tend to integrate Cloud Computing technologies
The BI solutions/products have modular functionalities that include, [8]: a)
dashboards - easily customizable, allowing better and faster real-time decisions;
b) KPI indicators, alert generators and exceptions reports, are also provided; c)
localization and business data visualization in geographical or geo-location
format; d) what-if analysis - which allow the company management to assess the
potential impact of business decisions in simulated stages, before confronting the
reality; e) interactive reports - help the final beneficiary to transform data into
knowledge, allowing visualization and analysis through various types of reports
and graphics designed to be used as decision support; f) sharing, distributing
information to users, viewable in normal, easily interpretable format.
3.2. What BI solutions the market offer?, Which BI solution is better
for SMEs?
Generally speaking all SMEs’ entrepreneurs, regardless of the industry
they belong to, accept the necessity of adopting BI solutions for real time decision
making. Nevertheless they still need to decide which BI solution to choose. There
are two big categories: Open Source (OS) BI or commercial BI that are detailed
below. The entrepreneur will have to take into account the technical infrastructure,
human and financial resources need for implementing BI solution. If the
entrepreneur choose an OS solution the license cost are reduced, but there he still
has to manage the cost and time needed to teach the human resources how to
efficient exploit the adopted solutions. Otherwise, the entrepreneur may opt for a
method of sharing hardware and software, such as Cloud BI, in order to pay only
for the services used and for increasing performance in information processing
[13].
Open source BI Solutions/products
Using open source solutions is a modern trend for European companies.
This trend is very well motivated while OS offer free license and technical
support on the solutions’ forum. Most of the big and small companies use Apache
web server, Linux operating system for their servers and MySQL database
management. There are OS solutions with licensing costs, but the cost for an OS
solution is smaller than the cost for a commercial license. OS solutions are very
stable, flexible, and reliable. It remains that the users get used with its. OS seems
to be dedicated for SMEs.
Beside operating systems and database management software OS offer a
wide range of solutions such as for financial accounting (GnuCash:
362 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)http://www.gnucash.org/), image processing (GIMP: www.gimp.org/), Business
Intelligence (Freereporting.com:http://www.freereporting.com/, Eclipse BIRT
Report Designer:http://download.eclipse.org/birt/downloads/, Palo (OLAP
database):http://www.jedox.com/de/home/uebersicht.html, SocrateOpen:http://www.bitsoftware.eu/ro/products-content/socrateopen.html, Actuate BIRT
Business Intelligence and Reporting Tools www.actuate.com/products/, SpagoBI:
www.spagobi.org/, Jaspersoft: www.jaspersoft.com/ ), etc. The BI solutions are
designed for reporting and decision making.
Commercial BI Solutions/products
As it was expected, the giants of software development, such as Microsoft,
Oracle, IBM, SAP and SAS Institute, created also BI solutions. But there are also
specialized software companies that developed Information Builders,
MicroStrategy, Panorama Software, QlikTech, Actuate, etc.
These solutions have also free demo editions that for SMEs with a smaller
activity may be taken into account. In this regard, we have applied the QlickView
BI interface on Oracle Sql Developer database with financial dates regarding
Romanian SMEs. (fig. 2, 3, 4, 5).
Modern BI solutions are turning to intelligent process automation,
monitoring events (BI ubiquitous and context sensitive), content analysis, process
monitoring, predictive analysis, and alerting users on the occurrence of certain
events. They have to enable [14] Business User Data Mashup and Modeling,
Internal Platform Integration, BI Platform Administration, Metadata Management,
Cloud Deployment, Development and Integration, Free-Form Interactive
Exploration, Analytic Dashboards and Content, IT-Developed Reporting and
Dashboards, Traditional Styles of Analysis, and to enables organizations to
develop and deliver content to mobile devices, Collaboration and Social
Integration and Embedded BI.
Taking into account all these criteria Gartner Company published a study
regarding BI solutions, called 2015 Gartner Magic Quadrant for BI &Analytics
Platforms. The result of the study reveals that the leaders are Tableau, Qlik,
Microsoft. In our case study we have chosen Qlik. [15]
4. Case study: Financial analysis for a Romanian SMEs using Qlik BI
Our data source for BI solution includes data on SMEs in Romania and
their activities. We have choose the data source dimension and the entity table-of-
facts in accordance with the requirements of cooperation and competition between
SMEs in Romania, presenting relevant information on which we can measure
firms economic and financial performance for decision making in order to
establish medium and short term business strategies. Decisions will reflect the
Business intelligence solution for Romanian SMEs […] a network business environment 363
coherence, materialized in profitability, solvency, and profitability of companies.
Historical data type allows what-if analysis, scenario analysis and forecasting
type, which also affect the company's business strategy. Data source highlights
trends, directions and exemptions for long periods of time. The source data
structure is represented schematically in Figure 1.
Fig. 2 is a dynamic report for localization and business data visualization
in geographical format that allows the user to search for a Romanian SMEs and to
get the contact details, the CAEN code and the economic-financial data (assets,
liabilities, equity, debt, stocks, net income, total expenses, turnover, profit,
number of employees) for 2006-2013 periods.
Fig. 3 is a dynamic report with SMEs’ KPI indicators such as economic,
social and commercial profitability.
Fig. 4 is a dashboard regarding SMEs’ solvability, such as general
profitability, capital profitability, financial stability rate, financial autonomy rate,
overall borrowing rate, debt recovery time, rotation of current assets time,
inventory turnover time, and financial leverage.
Fig. 5 is a dynamic report that present a What-if analyze for Romanian
SMEs. We may see how total income influence the net profit, or how brut profit
can be influenced by economic profitability and if the SMEs was profitable for
each year in 2006-2013 period. A SME is profitable if the economic profitability
is bigger than the interest rate and, in the same time, the financial profitability is
bigger than the economic profitability. (RE>RD and RF>RE). It is favorable to
work with credits if the economic profitability is bigger than the interest rate,
because has as consequence using more efficient the capital.
SME that has access to this Network Business Environment has access to
all these analyzes for every SME in database. Thus they can choose a valid
business partner. The database can be improved with other information regarding
the services and products of the NBE members. Thus the SMEs advertise free.
In our case study, the company AGRA OARDA SRL (Alba County) is
working in the field of preparation and spinning of worsted-type fibres. For the
year 2012 it had a net profit of 77851, with 5 employees, with a value of current
assets of 486040, a value of total liabilities of 290725, and a value of total
expenditure 690303 etc. Contact data of the owner of the company is shown in
Fig. 2.
For the same company, in the year 2012, we calculated the economic
profitability (RE) of 17.86, financial profitability (RF) of 38.44 and commercial
profitability (RC) of 13.83. In this case RE > RD and RF>RE. This is a profitable
company and it is safe to do business with it.
364 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
Fig. 1. The object oriented model designed to evaluate the financial and economic activities of
SMEs
Business intelligence solution for Romanian SMEs […] a network business environment 365
Fig.2. Localization and SMEs’ business data visualization (QlikView), Source: own research
Fig.3. SMEs’ Key Performance Indicators (QlikView), Source: own research
Economic profitability is calculated as follows: RE = Gross Profit / Total
assets * 100
Financial profitability is calculated as follows: RF = Profit / Equity * 100
Commercial profitability is calculated as follows: RC = Result
Exploitation / Turnover * 100,
The relationship between profitability is: RE > RD and RF > RE, where
RD is the interest rate. If RE > RD recourse to borrowed capital will increase
financial profitability, as financial leverage it will be positive and will return to
shareholders (RF > RE). In this case, the organization will have to use as much
366 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
interest loans to take advantage of financial leverage, but to limit the risk of
insolvency.
In our case, the financial risk of the company is small and any company
can enter into partnership with AGRA OGRA SRL. The company can obtain a
credit.
For our company, the profitability of total assets - ROA is not very high and
amounted to 15. The company is economically viable because conditions RE >
interest rate and RF > RE are met simultaneously. Company has to analyze his
activity in order to increase net profit (PN = 77 851), which is too small relative to
capital and gross profit (PB=92680), which is too small compared to the value of
total assets (AT = 518 773) and the result is a small economic profitability.
The company must also give importance to the general creditworthiness that is low,
of 1.78, reducing total debt. Financial autonomy rate is 13.66: firm may increase its
own capital, which is small in relation to total liabilities. Financial lever value of
6.66, above the threshold of 5 indicates that a company is easy undercapitalized.
Financial stability is high, its rate having a value of 64.57. The overall indebtednes
rate of 58.94 is high and total debt reduction is recommended. Return on Equity -
ROE is 99.74 exceeds the current interest rate, which means that the company can
make investments.
The assets ratio is 6.3, while that of assets is 93.6. It can be considered that
the company does focus to invest the capital, and it is advisable to review its
investment policy. Depending on the nature of the company further conclusions can
arouse and make decisions accordingly. The rotational speed of current assets is 264
days, is very high. The stock rate is 164 has a high value. The recovery time rate is
55 days and the debts recovery rate is158 days. These are favorable if low levels,
but the firm is not the case. The company pays its debt in a longer time than collect
debts. Rate debt is 0.5 which favors creditors, because the rate is lower with greater
protection from creditors in case of liquidation losses.
What- If analysis simulates the influence of total net income variation on net
profit. Fig. 4 shows a variation of total net income upside of 20%, would result in
an increase in net profit, in the event of sustained total expenditure (red curve, the
lower curve in chart). In the graph are represented the values of net profit for the
period 2007-2013 of AGRA OARDA SRL company. Observe how in 2013 net
profit (3490) fell to approximately one third of the profit in 2012 (9631), the
difference increased about 22 times compared to 2007 (77,851). The graph is
similar to that of a second degree polynomial advanced function, whose regression
equation is shown in Fig 5. The coefficient of determination R2 has a high value
(0.97), meaning that the regression equation adjusted very well data.
Business intelligence solution for Romanian SMEs […] a network business environment 367
Fig.4. Dashboard regarding SMEs’ Solvability (QlikView), Source: own research
83114 24994 9 . 1947
2
+ ? = x x Y (1),
where Y is net profit, and x is total net income. The regression equation for the
influence of total net income variation on net profit for period 2007-2013 is similar
to that of a third degree polynomial function.
96815 20253 2045..2 486.97
2 3
+ ? ? = x x x Y (2),
where Y is variation of net profit, and x variation of is total net income.
368 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
Fig.5. What If Analysis, Source: own research.
6. Conclusions
In these article we demonstrated how important is to use BI for SMEs and
that it is possible for SMEs to associate in a network business environment (NBE)
in order to get access on information in real time. In this regard, we designed the
data structure with data of Romanian SMEs and using a BI interface we process
data easily and rapid for a Romanian SME. The same analysis can be done for
every SMEs in the network, with only some clicks. Our solution offers semantic
autodiscovery and intelligent profiling for users. The charts analyze the data by
interacting directly, the user having a visual representation of it. Ad hoc query
enables users to ask their own questions of the data, without relying on IT to
create a report.
Acknowledgement
This work is supported by the Romania’s Operational Program for Human
Resource Development (POSDRU), financed from the European Social Fund and
the Romanian Government under the contract number POSDRU/159/1.5/S/
134393 (cempdi.pub.ro/knowledge).
Business intelligence solution for Romanian SMEs […] a network business environment 369
R E F E R E N C E S
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[13] Bamba, J., 2012:” Year of Cloud BI, published”: January 24, 2012, available online athttp://tdwi.org/articles/2012/01/24/2012-year-of-cloud-bi.aspx, accessed on 22/04/2015.
[14] *** Rita L. Sallam, Bill Hostmann, Kurt Schlegel, Joao Tapadinhas, Josh Parenteau, Thomas
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id/1319214
doc_682207256.pdf
Business Intelligence Solution For Romanian Smes Associated In A Network Business Environment
U.P.B. Sci. Bull., Series D, Vol. 77, Iss. 4, 2015 ISSN 1454-2358
BUSINESS INTELLIGENCE SOLUTION FOR ROMANIAN
SMES ASSOCIATED IN A NETWORK BUSINESS
ENVIRONMENT
Marian GHEORGHE
1
, Rocsana ?ONI? (BUCEA-MANEA)
2
The academic community, the researchers, the specialists, they all sustain
Business Intelligence solutions as the best method in processing data as results from
the literature review. In this article we made a literature review of possible Business
Intelligence (BI) solutions that might be adopted by Small Medium Size Enterprises
(SMEs). As a case study we created a data structure with Romanian SMEs
economic-financial data and made a financial analysis for a SMEs using Qlik View
BI on that structure. The analysis is easier if SMEs gather in a network business
environment using a platform as a service.
Keywords: Business Intelligence, SMEs, open source, data structure, dashboard,
KPI.
1. Introduction
Today the SMEs feel the pressure of competition, of economic crisis and
big volume of data processing. The variety of data format and difficulty of
processing determine the experts to design appropriate software to help
entrepreneurs to make well informed decisions. The most popular and efficient
solutions for processing big volume of data nowadays are Business Intelligence
(BI) solutions. In this paper we reviewed the literature regarding BI solution and
we chosen QlikView BI. We designed a data structure with Romanian SMEs
economic-financial data and processed these data with QlikView.
2. Research methodology
For this application we decided to study the literature with the focus on BI.
Our study has 5 steps:
1. Defining the research questions to answer: What BI means and what
problems solves?, What BI solutions the market offer?, Which BI solution is
better for SMEs?;
1
Prof., University POLITEHNICA of Bucharest, Romania
2
PhD. student, University POLITEHNICA of Bucharest, Romania, e-mail:
[email protected]
358 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
2. Choosing databases to search articles, chapters’ books and scratch. In
this respect we have chosen Web of Science, EBSCOhost, IS journals and IS
conference proceedings;
3. Screening papers and extracting information that might be transformed
in knowledge. There have been chosen only materials published after 2012. For
the selection we asked several keywords, such as: “Business Intelligence &
Analytics”, “Business Intelligence”, “BI trend”, ”BI for SMEs”, etc.;
4. Designing a data structure in Oracle Sql Developer, version 4.0.1, 2014.
The data structure contain information regarding Romanian SMEs: name, contact
information, activity’ domain (CAEN: Classification of Activities in the National
Economy), economic-financial data (assets, liabilities, equity, debt, stocks, net
income, total expenses, turnover, profit, number of employees, etc. on a period of
2006-2013; The data were taken from the Romanian Finance Ministry - Tax
Information and balances:http://www.mfinante.ro/, where there were no data
available for 2014 and 2015).
5. Choosing on BI solution and apply it in relation with the SMEs data
structure in order to obtain dashboards, dynamic report.
3. Literature review
3.1. What BI means and what problems solve?
“Business Intelligence (BI) is a term that defines a set of informatics
applications with economical background, used into companies to analyze data in
order to transform them into information that will be the base of decisions taken
by managers.” [1]
“Business intelligence & analytics (BI&A) has evolved to become a
foundational cornerstone of enterprise decision support. BI&A adoption, firms are
increasingly adopting BI&A technologies like dashboards, adhoc query and
interactive visualization etc. to support decision-making.” [2]
In the latest years, when the big volume of data processing is more
necessary, the BI&A has arisen the interest among academics and researchers,
too. They came with different solution for improving BI&A features.
Modern BI have to be available on mobile, allow self-service and
collaborative environment. The BI available on mobile has to provide
functionality for all of the multitouch gestures, such as mobile interface do, has to
provide ability to utilize the information capture for QR codes, accelerometer
data, bar code readers, and speech recognition. In the self-service BI rudimentary
actions that would be taken based on a shallow view of data have already been
thought of and taken in these environments. Those actions have been built into the
environment, along with the standard business rules needed by the analyst. The
user has to do more technical interactive analysis. The modern BI has to include
Business intelligence solution for Romanian SMEs […] a network business environment 359
methods of collaboration such as discussion forum or workflow component,
allowing cooperation between company members, to fundament and interpret data
and reach correct conclusions, [3]
The Business Intelligence Environment, [4]: “The BI environment
incorporates a spectrum of capabilities ranging from the operational aspects
including data extraction, data integration, parsing and standardization, and data
cleansing and validation, all the way to the analytical parts including data
warehouse platforms, analytics tools, OLAP cubes, data mining, presentation
schemes, and visualization methods for creating scorecards, dashboards, and other
types of visualizations, graphical presentations, and mashups.”
Business Intelligence solutions are provided with tools and techniques that
help entrepreneurs to analyze, understand and foresee complex business
situations. BI tools allow entrepreneurs to make decision in real time having in
front the entire panoply of situations that the business was or may confront. This
panorama is of crucial importance in periods of financial and economic crisis and
in very competitive environment such as the one faced by the actual SMEs. BI
tools help companies to reach their goals, such as improved productivity, lower
costs, reliable performance, reductions in paperwork, saving time etc. [5; 6]. BI
solution allows entrepreneurs extract useful information and transform it in
knowledge, from the constantly growing volumes of digital data, increasing
revenues, by decreasing costs, and increasing productivity. BI tools bring the
opportunity to calculate Key Performance Indicators, to make complex analysis,
such as What-If. BI systems are very important in respecting the agreements with
customers, efficient communication with them and in real time. [7].
From the technical point of view a Business Intelligence solution BI
includes: [8] a) Data warehousing - architecture, modeling, storage, managing,
data processing; b) ETL process extracting, transforming, loading and data
integration; c) Implementation of reports, data visualization, dashboards, d)
Online Analytical Processing OLAP and multidimensional data analysis; e) Data
mining, statistical analysis, forecast
One of BI shortcomings, that the literature review reveals [9] and we
consider important, is a strong focus on structured, enterprise-internal data, but
lack the capability of integrating external and/or unstructured information in an
easy, (near) real-time and effective way. Thus, some useful information can be
lost and affect the business panorama that can be followed by wrong business
decisions. This shortcoming can be exceeded if the SMEs form a Network
Business Environment, based on Cloud technology, where the information is free
and available for all the environment members.
An interesting feature of modern BI in the era of big volume of data to be
processed is transforming ETL (Extract, Transform, and Load) process in ELTA
(Extract, Load, Transform and Analyze) process. ELTA offer more flexibility in
360 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
reflecting environmental changes and short the time BI solutions are
implemented. The transformation over the date is done after the loading process,
according to the business needs. Usually the data is extracted from heterogeneous
sources in heterogeneous formats, then stored in a new data structure and then
transformed accordingly to the needs of business in which is made the decision.
The new process called Analyze imply using transformed data in statistical,
economical etc model in order to capture new, interesting, unsuspected features of
the business. These data can be used in forecasts, what-if analyses etc.
From the designer and maintainer perspective the BI solutions have to
offer an infrastructure for information and management support, have to be safety
reliable, and easy to maintain. From the customer perspective the BI solutions
have to offer information in real-time, has to be practically, friendly and
economic. BI solutions have to help managers in the process of decision-making,
customer identification, reduce costs, offer a innovative business model and offer
external communication (sharing, leading, cost-effective and offer quality
information) [10]
From the Marketing perspective BIS has to process data regarding: [11] a)
People (demographics, social networks, customer review, click stream, survey
data); b) Product (characteristics, category, customer data, survey data); c)
Promotion (data regarding promotion campaigns, survey data); d) Price
(transactions, survey data); e) Place (location based social networks, survey data)
As methods to analyze these data we can mention: clustering,
classification, association, regression, collaborative filtering.
In [12], the way SMEs use BI from ERP systems is analyzed. The study
shows that SMEs do not take full advantage of the business intelligence
capabilities. That result may indicate the lack of economies of knowledge, and the
under-utilization of the capabilities of the ERP system, resulting to poor ROI, and
less efficient management and marketing decisions, that are critical in times of
crisis. However, as expected the perceptions of the advantages emanating from the
implementation of ERP systems are highly and positively correlated with the
perceptions of business intelligence capabilities that the system delivers.
Proprieties of BI reports are:
- Ease to use: BI reports are intuitive, allows discovering new information
through graphical representations and they are dynamic: it can be changed with
multiple filters, drill-down or drill-up operations.
- Flexible: BI reports can be designed under different types of operating
systems and different versions, and under multiple types of databases.
- Easy to customize: BI reports can be designed as the user need, he can
choose the parameters the graphic representations, the objects to drag in report
(list box, multi box, statistics box, search box, input box, container, buttons, lines,
etc) in order to meet each user requirements
Business intelligence solution for Romanian SMEs […] a network business environment 361
- Data security: The database can be encrypted with different algorithms
such as RSA and AES, and the admin can create different roles for de end-users
and to share only what is necessary. As well each BI report page can be encrypted
- Trend: in the era of big volume of data to be processed the BI solutions
tend to integrate Cloud Computing technologies
The BI solutions/products have modular functionalities that include, [8]: a)
dashboards - easily customizable, allowing better and faster real-time decisions;
b) KPI indicators, alert generators and exceptions reports, are also provided; c)
localization and business data visualization in geographical or geo-location
format; d) what-if analysis - which allow the company management to assess the
potential impact of business decisions in simulated stages, before confronting the
reality; e) interactive reports - help the final beneficiary to transform data into
knowledge, allowing visualization and analysis through various types of reports
and graphics designed to be used as decision support; f) sharing, distributing
information to users, viewable in normal, easily interpretable format.
3.2. What BI solutions the market offer?, Which BI solution is better
for SMEs?
Generally speaking all SMEs’ entrepreneurs, regardless of the industry
they belong to, accept the necessity of adopting BI solutions for real time decision
making. Nevertheless they still need to decide which BI solution to choose. There
are two big categories: Open Source (OS) BI or commercial BI that are detailed
below. The entrepreneur will have to take into account the technical infrastructure,
human and financial resources need for implementing BI solution. If the
entrepreneur choose an OS solution the license cost are reduced, but there he still
has to manage the cost and time needed to teach the human resources how to
efficient exploit the adopted solutions. Otherwise, the entrepreneur may opt for a
method of sharing hardware and software, such as Cloud BI, in order to pay only
for the services used and for increasing performance in information processing
[13].
Open source BI Solutions/products
Using open source solutions is a modern trend for European companies.
This trend is very well motivated while OS offer free license and technical
support on the solutions’ forum. Most of the big and small companies use Apache
web server, Linux operating system for their servers and MySQL database
management. There are OS solutions with licensing costs, but the cost for an OS
solution is smaller than the cost for a commercial license. OS solutions are very
stable, flexible, and reliable. It remains that the users get used with its. OS seems
to be dedicated for SMEs.
Beside operating systems and database management software OS offer a
wide range of solutions such as for financial accounting (GnuCash:
362 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)http://www.gnucash.org/), image processing (GIMP: www.gimp.org/), Business
Intelligence (Freereporting.com:http://www.freereporting.com/, Eclipse BIRT
Report Designer:http://download.eclipse.org/birt/downloads/, Palo (OLAP
database):http://www.jedox.com/de/home/uebersicht.html, SocrateOpen:http://www.bitsoftware.eu/ro/products-content/socrateopen.html, Actuate BIRT
Business Intelligence and Reporting Tools www.actuate.com/products/, SpagoBI:
www.spagobi.org/, Jaspersoft: www.jaspersoft.com/ ), etc. The BI solutions are
designed for reporting and decision making.
Commercial BI Solutions/products
As it was expected, the giants of software development, such as Microsoft,
Oracle, IBM, SAP and SAS Institute, created also BI solutions. But there are also
specialized software companies that developed Information Builders,
MicroStrategy, Panorama Software, QlikTech, Actuate, etc.
These solutions have also free demo editions that for SMEs with a smaller
activity may be taken into account. In this regard, we have applied the QlickView
BI interface on Oracle Sql Developer database with financial dates regarding
Romanian SMEs. (fig. 2, 3, 4, 5).
Modern BI solutions are turning to intelligent process automation,
monitoring events (BI ubiquitous and context sensitive), content analysis, process
monitoring, predictive analysis, and alerting users on the occurrence of certain
events. They have to enable [14] Business User Data Mashup and Modeling,
Internal Platform Integration, BI Platform Administration, Metadata Management,
Cloud Deployment, Development and Integration, Free-Form Interactive
Exploration, Analytic Dashboards and Content, IT-Developed Reporting and
Dashboards, Traditional Styles of Analysis, and to enables organizations to
develop and deliver content to mobile devices, Collaboration and Social
Integration and Embedded BI.
Taking into account all these criteria Gartner Company published a study
regarding BI solutions, called 2015 Gartner Magic Quadrant for BI &Analytics
Platforms. The result of the study reveals that the leaders are Tableau, Qlik,
Microsoft. In our case study we have chosen Qlik. [15]
4. Case study: Financial analysis for a Romanian SMEs using Qlik BI
Our data source for BI solution includes data on SMEs in Romania and
their activities. We have choose the data source dimension and the entity table-of-
facts in accordance with the requirements of cooperation and competition between
SMEs in Romania, presenting relevant information on which we can measure
firms economic and financial performance for decision making in order to
establish medium and short term business strategies. Decisions will reflect the
Business intelligence solution for Romanian SMEs […] a network business environment 363
coherence, materialized in profitability, solvency, and profitability of companies.
Historical data type allows what-if analysis, scenario analysis and forecasting
type, which also affect the company's business strategy. Data source highlights
trends, directions and exemptions for long periods of time. The source data
structure is represented schematically in Figure 1.
Fig. 2 is a dynamic report for localization and business data visualization
in geographical format that allows the user to search for a Romanian SMEs and to
get the contact details, the CAEN code and the economic-financial data (assets,
liabilities, equity, debt, stocks, net income, total expenses, turnover, profit,
number of employees) for 2006-2013 periods.
Fig. 3 is a dynamic report with SMEs’ KPI indicators such as economic,
social and commercial profitability.
Fig. 4 is a dashboard regarding SMEs’ solvability, such as general
profitability, capital profitability, financial stability rate, financial autonomy rate,
overall borrowing rate, debt recovery time, rotation of current assets time,
inventory turnover time, and financial leverage.
Fig. 5 is a dynamic report that present a What-if analyze for Romanian
SMEs. We may see how total income influence the net profit, or how brut profit
can be influenced by economic profitability and if the SMEs was profitable for
each year in 2006-2013 period. A SME is profitable if the economic profitability
is bigger than the interest rate and, in the same time, the financial profitability is
bigger than the economic profitability. (RE>RD and RF>RE). It is favorable to
work with credits if the economic profitability is bigger than the interest rate,
because has as consequence using more efficient the capital.
SME that has access to this Network Business Environment has access to
all these analyzes for every SME in database. Thus they can choose a valid
business partner. The database can be improved with other information regarding
the services and products of the NBE members. Thus the SMEs advertise free.
In our case study, the company AGRA OARDA SRL (Alba County) is
working in the field of preparation and spinning of worsted-type fibres. For the
year 2012 it had a net profit of 77851, with 5 employees, with a value of current
assets of 486040, a value of total liabilities of 290725, and a value of total
expenditure 690303 etc. Contact data of the owner of the company is shown in
Fig. 2.
For the same company, in the year 2012, we calculated the economic
profitability (RE) of 17.86, financial profitability (RF) of 38.44 and commercial
profitability (RC) of 13.83. In this case RE > RD and RF>RE. This is a profitable
company and it is safe to do business with it.
364 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
Fig. 1. The object oriented model designed to evaluate the financial and economic activities of
SMEs
Business intelligence solution for Romanian SMEs […] a network business environment 365
Fig.2. Localization and SMEs’ business data visualization (QlikView), Source: own research
Fig.3. SMEs’ Key Performance Indicators (QlikView), Source: own research
Economic profitability is calculated as follows: RE = Gross Profit / Total
assets * 100
Financial profitability is calculated as follows: RF = Profit / Equity * 100
Commercial profitability is calculated as follows: RC = Result
Exploitation / Turnover * 100,
The relationship between profitability is: RE > RD and RF > RE, where
RD is the interest rate. If RE > RD recourse to borrowed capital will increase
financial profitability, as financial leverage it will be positive and will return to
shareholders (RF > RE). In this case, the organization will have to use as much
366 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
interest loans to take advantage of financial leverage, but to limit the risk of
insolvency.
In our case, the financial risk of the company is small and any company
can enter into partnership with AGRA OGRA SRL. The company can obtain a
credit.
For our company, the profitability of total assets - ROA is not very high and
amounted to 15. The company is economically viable because conditions RE >
interest rate and RF > RE are met simultaneously. Company has to analyze his
activity in order to increase net profit (PN = 77 851), which is too small relative to
capital and gross profit (PB=92680), which is too small compared to the value of
total assets (AT = 518 773) and the result is a small economic profitability.
The company must also give importance to the general creditworthiness that is low,
of 1.78, reducing total debt. Financial autonomy rate is 13.66: firm may increase its
own capital, which is small in relation to total liabilities. Financial lever value of
6.66, above the threshold of 5 indicates that a company is easy undercapitalized.
Financial stability is high, its rate having a value of 64.57. The overall indebtednes
rate of 58.94 is high and total debt reduction is recommended. Return on Equity -
ROE is 99.74 exceeds the current interest rate, which means that the company can
make investments.
The assets ratio is 6.3, while that of assets is 93.6. It can be considered that
the company does focus to invest the capital, and it is advisable to review its
investment policy. Depending on the nature of the company further conclusions can
arouse and make decisions accordingly. The rotational speed of current assets is 264
days, is very high. The stock rate is 164 has a high value. The recovery time rate is
55 days and the debts recovery rate is158 days. These are favorable if low levels,
but the firm is not the case. The company pays its debt in a longer time than collect
debts. Rate debt is 0.5 which favors creditors, because the rate is lower with greater
protection from creditors in case of liquidation losses.
What- If analysis simulates the influence of total net income variation on net
profit. Fig. 4 shows a variation of total net income upside of 20%, would result in
an increase in net profit, in the event of sustained total expenditure (red curve, the
lower curve in chart). In the graph are represented the values of net profit for the
period 2007-2013 of AGRA OARDA SRL company. Observe how in 2013 net
profit (3490) fell to approximately one third of the profit in 2012 (9631), the
difference increased about 22 times compared to 2007 (77,851). The graph is
similar to that of a second degree polynomial advanced function, whose regression
equation is shown in Fig 5. The coefficient of determination R2 has a high value
(0.97), meaning that the regression equation adjusted very well data.
Business intelligence solution for Romanian SMEs […] a network business environment 367
Fig.4. Dashboard regarding SMEs’ Solvability (QlikView), Source: own research
83114 24994 9 . 1947
2
+ ? = x x Y (1),
where Y is net profit, and x is total net income. The regression equation for the
influence of total net income variation on net profit for period 2007-2013 is similar
to that of a third degree polynomial function.
96815 20253 2045..2 486.97
2 3
+ ? ? = x x x Y (2),
where Y is variation of net profit, and x variation of is total net income.
368 Marian Gheorghe, Rocsana ?oni? (Bucea-Manea)
Fig.5. What If Analysis, Source: own research.
6. Conclusions
In these article we demonstrated how important is to use BI for SMEs and
that it is possible for SMEs to associate in a network business environment (NBE)
in order to get access on information in real time. In this regard, we designed the
data structure with data of Romanian SMEs and using a BI interface we process
data easily and rapid for a Romanian SME. The same analysis can be done for
every SMEs in the network, with only some clicks. Our solution offers semantic
autodiscovery and intelligent profiling for users. The charts analyze the data by
interacting directly, the user having a visual representation of it. Ad hoc query
enables users to ask their own questions of the data, without relying on IT to
create a report.
Acknowledgement
This work is supported by the Romania’s Operational Program for Human
Resource Development (POSDRU), financed from the European Social Fund and
the Romanian Government under the contract number POSDRU/159/1.5/S/
134393 (cempdi.pub.ro/knowledge).
Business intelligence solution for Romanian SMEs […] a network business environment 369
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