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September 17, 2003

Weasku Intelligence

BI, heading into uncharted waters, must change quickly if it is to lead the way

by David Stodder

Continued from Page 1

Deciphering Demand

"I think we're on the cusp of a major uptick in BI," said Imhoff. "We've grown up; we've even got standards. BI has come a long way from its beginnings 15 years ago, but the penetration is still quite low, especially when you look at SMBs [small- to medium-sized businesses]. We will see it go much farther."

Will this growth follow the typical path in the software industry: that is, with venture capitalists (VCs) funding BI startups? "The VCs got burned," said White. "There's also a lot of money sitting outside the stock market at the moment because everyone is reluctant to put money into new projects." However, Smith and Imhoff saw VC interest in areas not met by the primary BI infrastructure providers, especially to meet growing line-of-business demand for performance management tools. "Tools for market analytics, as opposed to straight BI analytics, are very interesting to VCs right now," said Imhoff.

Will customer relationship management (CRM) ever live up to its potential as a major application opportunity for BI and analytics? "CRM has a black eye," said McKnight. "Implementations have been over budget and have taken a long time to deliver. Major vendors have also done a poor job with analytic CRM. But just like with BI, you can't turn your back on CRM. It's a good concept. CRM can bring efficiency. The current situation actually reminds me of the early days of data warehousing."

"The real problem with CRM is that, as with portals, the technology may be fine but it won't help if you don't change the culture of the organization," said Imhoff. "Companies found that they risked exposing the chaos of their organizations and just making it a whole lot easier to tick off customers."

This led us into an extended discussion about the importance of bringing BI closer to business processes because "you can't use a lot of this technology effectively unless you understand the business process," according to White. "With things like CRM, if you can't change the way you do a business process, then there's no sense in buying the technology." That's what makes analytic applications a fundamentally different beast [from] traditional BI, which is becoming part of the enterprise infrastructure, as most of the summit's participants saw it.

With companies waking up to the need to define, measure, and analyze business processes, the software community is struggling to provide leadership. "The problem is that when it comes to business process management, the market features a fragmented, ragtag bunch of technologies," said Smith. He saw promising trends, with various vendors putting process and document management together with BI-style analytics, especially to serve CFO needs in the wake of new regulations such as the Sarbanes-Oxley Act. "But we're heading into uncharted territory," Smith advised.

BI: Behind the Market?

Driven by the thrill of new technology, the press, market analysts, and software vendors are often accused of being far ahead of where most users are in terms of implementation. The panel felt this was indeed the case with BI; most organizations are still trying to get their reporting automated and filled with quality enterprise data. However, when it comes to analyzing and improving business processes, it could be that BI is behind the curve. "BI has been very data-driven, very subject-driven," observed White. "A big change is going to have to happen to make it more process-driven." How will data warehousing change to keep pace with the demands that BI is facing? McKnight felt we'd see more activity around "getting data together from a real-time, virtual standpoint rather than in batch, and using data mining to realize the full value of BI."

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Alas, like any good author, I must leave dear readers hanging right there since I've run out of room in this column. I hope to pick up on this important subject in a future installment — and close by thanking Scott Humphrey for putting on such a fine event.

David Stodder [dstodder@cmp.com] is editorial director of Intelligent Enterprise.