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Oracle's supply chain BI the answer for SaaS provider

SPS Commerce added Oracle's OBIEE supply chain business intelligence software to give its buyers and suppliers more information to manage their supply chains more efficiently.

Dave Novak, senior vice president of sales and business development for SPS Commerce, can tell you about the importance of listening to your customers.

SPS offers a Web-based set of intelligence services that helps retailers and suppliers run their supply chains more efficiently. With 1,200 retailers and some 37,000 customers tied together in its ecosystem, SPS had an "immense amount of data" flowing through its data centers, including such things as invoices, purchase orders and packing and labeling information, according to Novak.

"We knew our data centers were loaded with all this rich and valuable content. But we also knew that customers wanted to know more about the data we were processing for them," Novak said.

"For instance, a customer selling to Target might want to know how their fulfillment rates are doing or which products are moving faster to consumers and which ones are in danger of being overstocked."

Listening to what his customers really wanted and knowing that he already had those underutilized goods in hand, Novak realized he was sitting on a new business opportunity. But to take advantage of it, he needed one more element.

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 "All we needed was a reliable business intelligence platform that could deliver this data to our customers as well as augment our own operational applications," he said.

Novak and his team began their quest to find that supply chain business intelligence platform -- one that would be Web-based so as to fit with their SaaS business model. One thing they quickly discovered was the paucity of Web-based offerings to choose from.

"First and foremost, we needed something that was 100% Internet-based," Novak said. "I didn't want to deal with any client-server stuff, integrating all these different UIs, security and metadata layers. When you really research it, there are not many out there."

Ultimately, SPS chose Oracle's Business Intelligence Suite Enterprise Edition (OBIEE) platform. An important reason for choosing the product was its multi-tenant capabilities, which the company believed could adequately handle the large number of customers it had on the supply side.

In late 2008, SPS launched its Trading Partner Intelligence platform. Starting in March of this year, and over the next several months, the company delivered a series of Web-based modules for retailers, suppliers, carriers and logistics providers to help them refine their decision-making processes.

For instance, some modules help users better understand supply chain bottlenecks for suppliers and logistics companies, through interactive analysis of fulfillment issues, or gain a better understanding of product sell through an interactive analysis of point-of-sale data from retail customers.

Once the OBIEE platform was implemented, it took six months to deliver the first trading partner application, which was faster than Novak had anticipated. He credits OBIEE's open architecture for helping the company get the application to market quickly.

"We couldn't afford to create another river. We needed things to fit into the river we already had flowing," Novak said. "We had to have an integrated security model, open UI, and we wanted to avoid the management and administration costs involved in scaling. To do all that, you need something that is not proprietary."

SPS is satisfied with the way it can scale OBIEE to accommodate the fluctuations in its traffic. Company officials credit the product's caching capabilities for making it scale, which has helped overcome technical obstacles typically thrown up by the database. Novak cautions, however, that it is essential to have an able data warehouse architect at your disposal.

"The technique for building a good data warehouse is simpler than building a complex operational schema, but you have to do smart things," he said. "If you have a BI tool that makes the database do a bunch of funky things, you can end up with an inorganic data architecture and design that is expensive and hard to maintain."

Novak also warned that in making changes to the UI or security settings in a SaaS-based application, you must make sure the BI tool you choose can not only scale but scale economically -- something he found to be as important as the performance itself.

SPS officials said they brought the project in before deadline and under budget, something Novak attributed in part to experienced IT people and Oracle's technical support organization.

"I think we were pretty smart about the whole process and got good counsel from Oracle, and we had some experienced people on staff," Novak said. "We hardly approached this blind and naïve."

So far, a little over a dozen customers are using the SPS BI-based offering. The company expects 25% of its customer base to adopt its intelligence service by 2012. SPS will also deploy the OBIEE platform internally in order to monitor its own transaction performance, segment out market data, and better analyze billing data.

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