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September 17, 2002

Winning the BI Race

BI software vendors are heading in interesting directions, but deployment problems are still the main barrier to growth

by Mark Smith

The waning economic indicators and financial markets have prompted a greater interest in financial performance and optimization of existing business operations. This no-nonsense, back to the basics approach to business management focuses on aligning individuals and their actions to business imperatives. This direction makes it critical for organizations to fully leverage their business intelligence (BI) software investments and to drive new projects toward the principles of performance management.

The question is whether organizations can truly achieve performance management or provide BI holistically across the entire business with their current skills and maturity of IT infrastructure. The status quo continues to plague the discipline of BI much as it has plagued the definition of BI — which hasn't evolved to accurately describe how businesses must utilize decision-support software.

Gartner Group still drives the term and stands by its quantitative aspect of transforming data to information to derive knowledge through reporting and analysis of structured information. But the reality is that organizations are using a much broader view of BI that can include any technology, tool, or application to support decision-making. This expanded view spans out to three areas:

Information: the utilization of any information (structured data or unstructured text) from inside or outside of the organization needed for taking action or making a decision
Context: the ability to access and analyze information in the context of a business area, process, or entity for any individual
Collaboration: the use of collaboration and knowledge management technologies to speed the process of making informed and knowledgeable decisions.

The challenge ahead is how to integrate these disparate software technologies so that business can invest in decision support without worrying about multiyear, million-dollar projects that hamper business advancements.

The BI Suite Race

The most visible aspect of the BI race is in the evolution of vendors toward suites that comprise a platform supporting end-user tools and analytic applications. The ability to drive larger deployments across user communities and business areas is a very large undertaking. Similar to what we saw in the late 1990s from the enterprise application providers (such as Oracle, PeopleSoft, and SAP), we are now seeing BI vendors (such as Business Objects, Brio Software Inc., Cognos Inc., Informatica Corp., Microsoft, and SAS Institute Inc.) racing to provide an enterprisewide suite of BI capabilities.

Some organizations would like to operate on one analytic backbone to reduce the challenges of information inconsistency and metadata management. However, there are many skeptics who do not believe that the value or maturity of these suites merit any or little attention. The latter is most often the case: For the most part, these applications do not provide significant application functionality; rather, they provide a customized version of BI tools with pre-packaged data models. Nevertheless, the BI vendors believe that evolving customer demand and resulting revenue opportunity will evolve in the next three to five years. We'll have to wait and see.

The larger enterprise application providers (such as Oracle, PeopleSoft, SAP, and Siebel Systems Inc.) have also made product investments in this area, but they haven't been willing to strategically market and sell their products there. In fact, because of organizational changes and business challenges, they have further deemphasized their efforts on BI suites. Despite product and marketing claims, these enterprise application vendors are still hampered mostly by their own actions. (Siebel Systems is an exception; following its acquisition of nQuire Software in 2001, it's made BI an integral component of its solution strategy.)

The Drive to User Deployments

The end-user market for BI tools continues to blossom via the purchasing of query, reporting, analysis, and publishing (QRAP) tools. There is still significant demand and belief in IT and business that these tools will give end users the access and analysis functionality to solve any business decision quandary. But the reality is that they're being delivered to users who don't have the time, skill, or inclination to use them. The majority of business end users require access to a business library of metrics for selection, personalized to their role, with limited analysis and ability to set tolerance thresholds for monitoring and alerting.