Tracking the BI MuseBreaking free of its traditional bounds, business intelligence (BI) will find harbor in many applications"What's the world's oldest profession?" economist Lester Thurow asked his audience at the recent IDC Directions 2002 conference in San Jose, Calif. (April 3). "No, it's not what you think. It's actually the music business. Some of the earliest human artifacts we have are of people performing music. But in 10 years, there may not be a music industry anymore." Among his many shrewd observations, I thought of this one during a recent cross-country flight I had the distinct pleasure of sharing with about a hundred 12- and 13-year-old kids. Restlessly excited, they were headed to Washington, D.C. for a big class trip while I was making a determined effort to get through the 15-pound bag of reading material I had scooped off of my office floor. Alas, no passenger can remain an island of concentration under such circumstances. As we reached cruising altitude, all around me the students unzipped their overstuffed day packs and began pulling out a dazzling array of CD players, MP3 music pods, game consoles — and, of course, the requisite junk food to complete the sensory loop. Soon, they were passing CDs and other food and entertainment components up and down the aisles. Celebrity magazines full of glossy pictures of preening stars were also passed around. "It's cool. I like your music, Summer," said the fellow next to me hopefully as he thrust an arm between my eyes and the reading matter to reach the girl across the aisle. "Don't listen to Mikey's music. It sucks." Mr. Thurow, something tells me that the music industry will continue to exist for a long time to come, despite its current tribulations with digital media and the Internet. And so will BI and analytics, which may not be considered the world's oldest professions, but are certainly activities that have thrived, in some form, since primitive times for enterprising humans to interpret transactional behavior. However — if I may slip this analogy across a few thousand years — just as most music is no longer produced using hollowed-out antlers, bones, intestines, and animal skins, BI and analytics will also break out of the current context within which most of these software solutions are produced and deployed: that is, traditional data warehousing. The BI muse will live in many different places, some visible, some not. Software SkyscrapersThe hottest buzzword in the BI space right now is "analytics," which should suggest that this sector of the software industry still has some work to do in conjuring up catchy buzzwords. IDC's Henry Morris is credited with inventing the term "analytic applications" to describe a new wave of decision-centric systems that go beyond the query, access, and reporting duties of traditional BI tools. Nearly all the major BI vendors are scrambling to dominate growth in the analytic applications space, leading to expected confusion and contention. Users have to look closely: Is what they're being offered merely a repackaging of familiar BI tools? Or is it something that is — to borrow words from Intelligent Enterprise contributing editor Philip Russom — "interactive and analytic (not just static, like a report), [with] procedures that guide the user through analysis, the way other types of applications automate linear business processes." ("Nonanalytic Nonapplications," Decision Support, Feb. 1, 2002.) Morris, in his presentation at IDC Directions, described how analytics would combine with content and collaboration services to form next-generation enterprise applications. Holding this package together will be increased "verticalization," which follows what Morris identified as a familiar evolutionary trend in software applications. After an initial phase of "horizontal" tool development, packaged suites form. Then, to create differentiation and higher value, the suites begin to encompass industry- or business function-specific expertise. Advanced enterprise portals, offering dynamic, role-based process management, will serve as the secure, interactive platform that could, in a sense, escalate the user's experience up to the appropriate level. Where does this leave the BI vendors? Will they be able to compete effectively in both horizontal and vertical markets? Crystal Decisions is one vendor that could have a strong position, thanks in part to its relationships with Microsoft and SAP AG; the Microsoft .Net relationship will be particularly intriguing as BI Web services evolve. Crystal is also developing more vertically oriented analytic applications. At perhaps the other end of the spectrum, SAS Institute is investing heavily in building vertical domain expertise to fit with the operations research capabilities of its software tools. Biotechnology, demand planning for retail, and supplier relationship management are three key areas for SAS analytic applications. Adieu, CFOAs XML and federated data management approaches mature, BI will float free of its moorings within the traditional data warehousing context to explore new analytic waters. Within the "intelligent" enterprise applications that Morris describes, BI tools will have to negotiate data streams containing structured and unstructured data. That's because so many of these applications will have new masters: that is, C-level figures who don't necessarily see the world through the filter of accounting. Instead, they'll want to analyze profitability and return on investment based on specific business processes, marketing campaigns, or other activity — using approaches such as balanced scorecard frameworks and activity-based costing. Our recent recession has taught line-of-business managers that they need new instruments; otherwise, they're at a serious disadvantage vs. competitors who have sophisticated analytics that can look beyond what traditional, accounting-oriented BI vendors that can dance to a different rhythm. David Stodder [dstodder@cmp.com] is editorial director of Intelligent Enterprise.
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