The BI TransformationInnovation and evolution provide new value and opportunityby Mark Smith Continued from Page 1 BI vendors are showing a steady, continuous evolution toward performance management. The challenges are transforming from historical performance measurement tools and applications (query, reporting, and analyzing historical performance) while managing existing customers' expectations in their core competencies. This challenge will be greater for vendors that need to determine how they'll embrace and integrate planning and what-if capabilities into their server architectures. Other vendors, such as Hyperion Solutions Corp., Microsoft, and Oracle, that have been building on platforms that can support these capabilities, will have an easier time making the transition. The two sleeping giants in this space are SAS Institute Inc. and Fair, Isaac & Company Inc. Over the last two years, SAS, which has more than $1 billion in revenue, has reorganized its marketing and product direction to address the performance management market, and I expect to see products materialize in 2003. Fair, Isaac, with its recent acquisition of HNC Software, is now a more than $500 million provider of analytics. It will extend its existing and new products beyond its dominant market share in financial services to the general market. Your Organizational ChallengesThe larger challenge isn't how software will evolve toward performance management, but how organizations will transition their cultures and methods in this direction. Established executive and organizational politics can fracture your ability to transform into a more transparent, bidirectional, performance-driven culture. Enlightened organizations are addressing this issue with new solutions that leverage collaboration and metric-driven applications that can coordinate and communicate direction and progress on performance goals to communities of individuals. The significant investments that you've made in existing software, hardware, and resources aren't always aligned to performance management. Enterprise application and application development projects are perfect examples of how many organizations get caught up in never-ending upgrades and maintenance just to automate or speed up transaction-level operations. Spending in this area can gain you some efficiency, but you should focus investments on what you'll need to optimize and align individuals throughout your organization to achieve critical financial and organizational goals. Looking AheadBI is transforming toward performance management, which helps you leverage organizational assets (people, information, and processes) in a methodical way. This market evolution is critical, as many existing BI platforms and tools continue to be difficult to use and hamper end-user self-sufficiency in broad enterprise deployments. Demand for improvement is creating a new wave of innovation that uses process, rules, and workflow technology to tailor information and collaborative capabilities to each individual's role. Currently, no performance management solution is the undisputed leader for enabling understanding, optimization, and alignment (as seen in DecisionCycle) at all your organizational levels (strategic, tactical, and operational). You'll need to re-evaluate your investments in transactional infrastructure and the fragmentation of your BI investments, and then align them toward performance management. If you don't, you'll continue on a road to information anarchy and suboptimal performance that won't help you coordinate your assets and resources with your strategic performance goals. Mark Smith [mark.smith@ventanaresearch.com] is the CEO and senior vice president of research at Ventana Research, an advisory services and research firm providing insight and education on best practices and technology in performance management. RESOURCESFair, Isaac & Company Inc.: www.fairisaac.com Hyperion Solutions Corp.: www.hyperion.com Microsoft: www.microsoft.com Oracle: www.oracle.com PeopleSoft: www.peoplesoft.com SAP AG: www.sap.com SAS Institute Inc.: www.sas.com Siebel Systems Inc.: www.siebel.com Related Articles at IntelligentEnterprise.com: "Business Critical Prism — Overview of Performance Management" Oct. 4, 2001 "Strategic Assessment Guide" Oct. 1, 2002 "Winning the BI Race" Sept. 17, 2002
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