Mar 29, 2007 (10:03 AM EDT)
The State of Business Intelligence
Read the Original Article at InformationWeek
Let the politicians debate ad nauseam whether isolationism works in the global arena. The argument's been settled on the business-infrastructure front: No information system is an island, and he who depends on outdated data loses market share. Business intelligence vendors must release products that mesh with these realities if they expect to expand their empires.
And the territory is certainly there for the grabbing: A poll released last month by our sister publication InformationWeek showed nearly half of the 500 IT professionals surveyed plan to increase spending on software for viewing and analyzing business information from 2006 levels).
Forrester says BI platform revenues will reach $7.3 billion by 2008, and CIOs surveyed by Gartner identified BI as their No. 2 technology priority last year, up from No. 10 in 2004. Despite this, analysts have long puzzled over the relatively low penetration rate of BI tools, generally pegged at less than 20 percent of potential customers.
Why the disconnect? After all, BI suites provide the platforms from which critical data is aggregated, searched, presented and analyzed. Sure, it's a complex process. Data must be pulled from disparate sources, such as ERP, order entry and inventory management. But up-to-date information is the lifeblood of business. How can four out of five not be buying in?
The answer may be that too many BI platforms are mired in historical analysis across siloed back ends. The action is in a new, more integrated world of dynamic, real-time information that's emerging from Microsoft, Oracle and other BI vendors. These suites empower real users--not IT pros drafted into duty--and let them draw valuable data from processes, events and other sources beyond conventional data warehouses.
Their vehicle for display? Real-time dashboards that process up-to-the minute information and present it for immediate use and analysis. But that level of integration carries risks: Data sharing within BI brings up serious security, compliance and privacy concerns. And then there are the turf wars, as departments, employees and business partners scramble to protect data--their prime intellectual asset--from internal and external competitors.
Still, a new vision of real-time, networked intelligence is possible thanks to affordable computing and storage platforms. These, combined with advances in leveraging BAM (business activity monitoring) to track strategic business objectives and cost-effective data-warehousing appliances, should help vendors extend the use of BI throughout the business world. Now, will they rise to the challenge? And will IT buy in?
The list of BI players is a veritable who's who: Big application and systems providers--including IBM, Microsoft, Oracle, SAP and most recently, Hewlett-Packard--are trumpeting BI, analytics and data warehousing and are challenging in markets once owned by pure-plays such as Business Objects, Cognos, Hyperion, Information Builders, MicroStrategy and SAS. In addition, systems integrators and resellers are clamoring for BI expertise to buff up their services.
In mid-February SAP acquired Pilot Software, which helped define the term business intelligence and now specializes in performance-management applications based on its BI/analytics platform, PilotWorks. More recently, in early March, Oracle made an offer to buy Hyperion. If the deal goes through, Oracle will muscle up its portfolio with the addition of Hyperion's Essbase OLAP server and BI tools. More importantly, however, Oracle will assume the market lead for performance management tools and financial applications. Market analysts predict more mergers and acquisitions to come.
If these commercial packages are out of your league, open-source BI is becoming a player, as are new data-warehouse appliances that promise analytical power at an affordable price. JasperSoft and Pentaho, two of the better-funded open-source start-ups, help develop BIRTs (BI and Reporting Tools) for Eclipse, the popular open-source development environment. This is no flash in the pan: BI veterans Actuate, Business Objects and Cognos are also BIRT developers.
Finally, BPM and rules-engine providers are in the hunt. BEA Systems with Fuego, as well as Fair Isaac, Savvion, TIBCO and WebMethods, all boast of activity monitoring, embedded analytics, decision management and business information integration in their products. These technologies will be critical to next-generation BI.
Let The People BI
Although BI tools are becoming somewhat easier to use, they remain a challenge for most nontechnical employees, especially if the suites require deep knowledge of underlying data models, schema and metadata. It takes some training before an end user will know how to drill down and discover why, for example, a BI dashboard is showing that labor costs are high in comparison with sales in a particular store.
If BI is to enable quick, daily business decisions on issues such as allocating resources and inventory, users shouldn't be forced to waste time sifting through irrelevant data for answers. They certainly can't depend on IT to do their drilling.
BI and analytic application vendors will take the user's role and responsibilities into account. Business Objects, Microsoft, Oracle and others will further link BI into project lifecycle management systems to integrate a much more guided experience with established project methodologies.
What these vendors often overlook, though, is that executives and managers have always had methods of gathering internal information and applying it to their decisions. Maybe they had IT develop a proprietary application that paves the way by automating existing measures, or they might become spreadsheet jockeys themselves. Some simply rely on instinct. Either way, old habits die hard. BI flourishes where executives, managers and business analysts are willing to challenge conventional wisdom, but not all organizations are that adventurous.
From a strategic standpoint, BI vendors are discovering that the best way to overcome entrenched practices and increase their presence is to infiltrate the application, service and process environment that operational workers encounter every day. In this capacity, BI and performance-management dashboards serve as components of corporate portals or other interfaces. Eighteen months ago we reported that Microsoft Excel was an integral part of the enterprise business intelligence strategy--and with good reason. Excel is flexible, provides both numeric and visual representations of data, and can be scripted to provide bidirectional communication that enables write-backs for forecasting or corrections to existing data (see "One Suite To Serve them All").
Some BI vendors are still battling to pry users away from their spreadsheets, but most--including Microsoft--have accepted defeat gracefully and are working to bring BI's benefits to those who prefer spreadsheets as their main tool and entry point.