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Tue, Feb 24, 2009 15:14 EST

Businesses Are Still Crazy for BI After All These Years

Topic: Applications

Blog: Enterprise Software Unplugged

Current Rating: 4 Comments: 5

For the last four years, Gartner has surveyed thousands of CIOs from around the globe about their enterprise systems, and each year the top technology priority that those CIOs cite has been exactly the same: business intelligence (BI) applications.

According to Gartner managing VP Ian Bertram, BI apps are considered "transformational" business systems. That's why BI has been the highest for priority for CIOs four years running, and why, he notes in a research report, BI "will fare better than many other technologies and management practices" during the global recession.

"BI is even more important when times are tough. It can help find bottlenecks and inefficiencies or to expose areas that are profitable," Bertram states. "The rapid growth in information generated from enterprise applications, the popularity of metrics-driven business initiatives and the growing need for regulatory compliance will also continue to drive growth in BI."

While I take no issue with Bertram's overall viewpoint or Gartner's survey data, I have to say that my take on the data is starkly different. Whereas the Gartner research may point to rising demand for BI apps, I see pent-up enterprise-wide frustration, aimed squarely at IT and CIOs for failing to give the business what it needs and deserves—for four straight years!

In my book, that's much too long a time to be asking for the same request and not getting it. Especially if you're the CEO or COO or CMO or supply chain chief or any other business user currently frustrated by the sham of a "business intelligence" system that you're currently forced to endure.

As I have reported previously, too many business users have given up on actually receiving an integrated and corporatewide BI, analytic and forecasting application set. Instead, many execs are relying on their gut to make critical business decisions.

The cause of this vexing business problem? Largely, it's the disconnected and expanding back-office mess residing inside IT's walls these days—siloed ERP and BI applications, standalone SaaS CRM apps, a couple of marketing department data warehouses, maybe even a legacy supply chain app, all working out-of-synch with each other.

A new Forrester Research report notes that right now companies and top executives must find any possible way to increase revenues. And creative IT and business users are now "leveraging BI as a corporate asset to continue to survive, compete and thrive."

Forrester analyst Boris Evelson offers a couple examples of ways in which actual Forrester clients are turning BI data into profit centers by "uncovering previously untapped revenue streams."

Here's one example: A large (and unnamed) global retailer is using its internal point-of-sale (POS) data to offer customer-buying data (for example, seasonal patterns, market basket, effect of promotions) to its partners, such as its suppliers, manufacturers, wholesalers and distributors.

"Raw POS data for their own products has always been available to manufacturers," Evelson writes, "but an analytical portal brings clear additional value, by not only providing insight into how your products are selling, but also what customers buy across product lines that may include your competitors." (The retailer has taken care of potential privacy and conflict-of-interest concerns by showing each manufacturer and supplier its own POS data at the lowest level of detail, he adds, but the data for competing products only at an aggregate level.)

Smart. Timely. Profitable.

How'd you like to be that CIO and IT staff right now?

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Average (2 votes)
4
 
 
Tue, Feb 24, 2009 23:49 EST
Anonymous user
Posted by: nuance intelligence
Rating: 90

Thanks William,

Thoughtful analysis - I agree that BI will continue to grow as a sector as executives try to wring more value from their companies. I think the point is that BI *can be* transformative, but often, the info just sits in the hands of a few people -- effectively silo'ing the silo'ed data.

In my analysis, the problem is bigger than just silos, it's the sheer volume of data. There is a fair bit of research available that points to the human brain's relatively limited capacity to hold abstracted data in relation to each other. The equivalent of a roughly 60 - 100 cell spreadsheet is about all most people can really hold in their brain at once, and internally visualize.

I recently wrote on how to transform BI data into a more interpretable tool using business map mashups. By putting lots of data on a map, and being able to zoom, filter and compare it with other internal and external data, a business analyst can quickly see gaps, clusters and patterns that are invisible in the BI data delivered via spreadsheet.

Some of the biggest users of BI data are consumer packaged goods (CPG) companies -- some of whom are downloading million-cell spreadsheets from Walmart's Retail Link service every week (and even more frequently, in some cases). When you take that info and map it, comparing demographic data and even weather, you get very engaging maps that allow people to ask new questions of the data.

I think it's these types of innovative uses of BI that will set leaders apart from laggards, and welcome your review of some other case studies we have done on our blog.

 
Wed, Feb 25, 2009 7:43 EST
Posted by: SoftwareSweatshop
Rating:

Your articles are always on point... Good topics and intelligently written.

Raza Imam
www.SoftwareSweatshop.com

 
Wed, Feb 25, 2009 11:50 EST
Anonymous user
Posted by: Bill Hewitt
Rating: 90

Tom, you've hit the nail on the head- businesses are frustrated with the lack of good quality data available to make business decisions. In this tough economy, these decisions become more important; in some cases life or death. There are two big challenges facing IT in meeting these requests- 1, they are now dealing with fewer staff than ever before, and their environments are build to manage the movement of data, not the quality of the information. Data quality doesn't go far enough- it's more about the process necessary to keep the data clean. Data Governance delivers such a process because it involves the business in the act if keeping data high quality. The biggest challenge for IT remains bridging the gap between IT and the users, and for that, the IT department needs to speak the businesses language and understand the daily issues they are trying to resolve in order to deliver a flexible reporting system that truly satisfies the business.

 
Wed, Feb 25, 2009 21:02 EST
Posted by: brian.kusumawan
Rating:

Hi, Tom. First of all, I must say that this is a good article and it is applicable these days in a situation where people think that IT can always solve any problem(s) better - next I refer as a trend.

The 6th paragraph of your writing is the beginning of this discussion, I believe. It is where - as I mentioned - people who used to think that IT can be the best solution for them without looking deeper whether or not they are ready for implementing IT or BI in this case. As you have seen, I have seen many either where some of my business partners and/or colleagues failing just because they are trusting too much on the technologies their consultants used to advice.

IT - for me - is a very good support for any form of business but again, it must be something valuable. Valuable here means a condition where IT is really helping AND not being a nightmare as it might scare its users because of its complexity or whatsoever. It must produce efficiency as well as effectiveness in real practice, not only during the talk.

IT can be a good backbone for any business BUT please do remember that IT can't stand alone. In simple word, Business does not run better without IT existence and so does IT. Therefore, implementing IT in business sounds pretty good BUT then again, please put it as a valuable asset in the business. The business owners, CIO, CEO must be responsible in determining which level of IT usage is really expected to be applied. In other words, too much IT invested can't simply help the company out in order to run its business smoother or better BUT reversely it might ruin the business somehow.

This is how I describe my comment title as Trend Vs. Value as the emphasize here is not just to follow the current trend where everyone talks about IT but the choice must be valuable as well, which technology is really suitable or appropriate to the business financially, effectively, and efficiently.

Any additions are welcomed and thank you for taking it into surface, Tom.

Cheers,

Brian Kusumawan
http://www.briankusumawan.co.cc

 
Fri, Feb 27, 2009 7:33 EST
Posted by: Peter Thomas
Rating: 60

Thomas,

Thanks for the thought-provoking article. I have linked back from my blog at: http://peterthomas.wordpress.com/2009/02/27/businesses-are-still-crazy-for-bi-after-all-these-years-ciocom/ I think that a piecemeal approach to BI can at best have limited success, if you want to really release value, then then is no alternative to taking a more linked-up approach.

Peter

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