April 30, 2002 Enterprise-Scope Suites of Analytic ApplicationsNew packaged analytic applications — integrated into suites that cover multiple domains across the enterprise — present both challenges and benefits.Looking at what's new in recent offerings from business intelligence (BI) software vendors, one of the more prominent trends in early 2002 concerns what I call (for lack of a more graceful term) the "enterprise-scope suite of analytic applications." Let's take a look into the contents of these suites, as well as what makes them enterprise in scope. Then we can consider their challenges and benefits. Contents of SuitesAn enterprise-scope suite consists of multiple analytic applications, where each application focuses on a different business domain. Most suites include analytic applications for financials and sales, the perennial favorites since the dawn of analytic applications. Other popular domains include operations, customer profitability (sometimes customer segmentation), and miscellaneous supply chain issues (procurement, product quality, and distribution). Most vendors offer a license for the entire suite, but also let customers license and implement analytic applications individually. A few vendors offer bundles of related applications and services. Enterprise in ScopeTo be "enterprise-scope," a suite must satisfy three conditions:
When these three conditions for enterprise-scope are satisfied, a suite of analytic applications has the potential of providing a key benefit, namely cross-domain visibility. The idea is that an enterprise-scope suite of analytic applications provides visibility into cross-functional business processes and their interdependencies, which you can't see using single-domain analytic silos. For instance, sales forecasting can be corroborated by information from financials and operations. And you can understand procurement better when you have access to accounts receivable and general ledger data. Competitive LandscapeAnalytic applications have been around for many years (mostly as analytic silos), whereas enterprise-scope suites are still quite new. At this point, BI vendors are still making announcements and rolling out the initial applications of their suites. For instance, the suites with the most applications rolled out today are Business Objects SA's BusinessObjects Analytics, Cognos Inc.'s Analytic Applications, and Informatica Corp.'s Informatica Applications. But don't dwell on this list. With more applications coming every few weeks (and more BI vendors entering the race), the list will change quickly. Also of note are Brio Software Inc.'s Performance Suite and Hyperion Solutions Corp.'s business performance management applications. Brio is beefing up its foundation of metrics and building a new tool for designing performance-oriented metrics as preliminary work for building packaged analytic applications. Hyperion has long offered analytic applications, mostly for financial performance management; it is now integrating these into a suite and making its platform more conducive to deploying integrated analytics. Assessment — Balancing the Challenges with BenefitsChallenges. As with any category of software, enterprise-scope suites of analytic applications have their challenges. First, let's recognize that assembling multiple analytic applications into an ever-expanding suite is a Herculean task. So you shouldn't expect a single vendor to have today just the right combination of applications for all your enterprise intelligence needs. Note that this will become less of an issue as vendors expand their offerings. And don't expect that all the applications from one vendor are best of breed. The individual applications of these suites tend to lack the rich functionality of their older, analytic-silo predecessors. Furthermore, beware that the analytic applications of most suites are proprietary and non-portable, in that they work with only the vendor's platform. If you customize a packaged analytic application heavily (which is inevitable for many user organizations), you may not be able to upgrade gracefully. And many corporations already have legacy analytic applications or generic OLAP and reporting platforms, so implementing an entire suite can be redundant. Note that there's an ironic disconnect between the key benefit of an enterprise-scope suite (visibility across business domains) and the way vendors sell the suite (one application at a time). The reality is that the people who need to segment the customer base are not the same people who want to track sales performance, and these are not the people interested in analyzing procurement. Savvy vendors realize this, so they offer the integrated suite as a complete menu, but also sell it á la carte (or in creatively assembled ad hoc packages) based on the needs of departmental customers. The theory is that the rest of the enterprise will purchase applications, once the value of the suite is established in one department. Users and vendors following this strategy should always remember that — unless you implement the entire suite — you won't gain the full benefit of cross-domain visibility. Benefits. With all these possible challenges, why would anyone in their right mind choose to implement analytic applications from an enterprise-scope suite? Simply put, buying a packaged solution has numerous benefits and avoids the risks of building an analytic application and its data warehouse from scratch. On the one hand, I don't think that the classic "build vs. buy" argument has been very compelling in the past to users of analytic applications. On the other hand, however, more users are finding it compelling today because the quality and quantity of packaged analytic applications have increased considerably of late. For example, I personally feel that the infusion of business performance management methodologies into analytic applications has given them more structure, actionability, and relevance to business users' jobs than such apps had previously. Plus, implementers of analytic applications have recently polished their best practices for encapsulating domain expertise, which has long been the leading barrier to successful analytic applications. And, after years of development, analytic applications are now commercially available covering a broader range of business functions than ever before. All totaled, the challenges of enterprise-scope suites are many, yet the benefits are almost as numerous. Assuming that the quality and quantity of commercially available packages continue to increase, the balance of challenges and benefits should soon tip toward the latter, making enterprise-scope suites of analytic applications compelling for even more user organizations. Philip Russom, Ph.D. [www.philiprussom.com] is an independent industry analyst and consultant based in Waltham, Mass. Related Articles by Philip Russom on IntelligentEnterprise.com: From Back to Front. Informatica expands from ETL back end to dashboard front end. March 8, 2002 Altering the Suit. Packaged analytic applications are like suits that you buy off the rack, but then alter to fit. Just be sure the alterations don't cost more than the suit! November 28, 2001 The Rubber Hits the Road. Cognos Series 7 is an important milestone on the road to satisfying new requirements for analytic applications. November 14, 2001 |
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