Introduction
Businesses are suffering from the inability to properly and appropriately exploit their data assets. The cost of this corporate disability is literally immeasurable, and is felt in terms that touch every aspect of business operation -from increased customer churn to a waste of IT resources. However, extolling the benefits of BI is not at all difficult - indeed the current climate of strict financial control and an associated focus on performance management plays directly into its hands. Whilst many shook their heads in dismay over the highly publicised Enron and WorldCom 'irregularities', the BI market rubbed its hands in collective delight. Such stories served to highlight, in a very direct manner, the implications of a business not having complete control over its data and information resources.
The general BI market is relatively mature, with established and recognised vendors jockeying for position. The underlying technologies and architectures are also becoming well-defined, with a general move away from client/server to Web-based deployments. However, our view is that the way that the products and tools are being used within organisations is far from mature. All too frequently the purchasing of BI products are sanctioned on a case-by-case basis in order to attempt to satisfy short-term information gaps. The classic example is to use BI to address the shortcomings in the native reporting and analysis capabilities of an operational application. Whilst the deployed BI tool may address this particular issue, it does nothing to engender a greater level of organisational decision support and performance management, which by its nature demands pan-enterprise data integration.
Many organisations have realised the need to develop such a platform for BI, and have initiated a data warehousing project, only to have become burdened by nothing more than a data dumping ground. Integrated Business Intelligence (IBI)is Butler Group's term to encapsulate a more advanced and strategic view on the deployment and use of BI technologies. This sees the technology being applied, as appropriate across organisations, in order to support the strategy and goals of the organisation. It enmeshes BI into the fabric of the business, and enforces a culture of collaborative decision-making and information exchange, as dictated by business processes and organisational structures.
IBI combines the necessary technical components, including query, enterprise reporting, and analysis, with vital business elements, such as the need to focus on the development of a supportive culture, and the importance of collaboration within a BI context.
Business Issues
A business' culture can make or break a BI deployment. Getting this right starts well before any product or vendor selection is made, and requires that the organisation understands the nature of the information flows that course through its structure. One of the greatest cultural challenges is in getting people to take ownership of information and the consequences of changes therein. The problem stems from the fact that business processes span department and functional areas of the business. No one individual 'owns' the process, and so when problems arise, as they inevitably do, the result tends to be more of a finger pointing exercise than a serious commitment to rapidly addressing the issue. Only by understanding the information processes - who needs to know what, why, where, and when - will the business begin to unravel the complex and often political issues of information ownership. It is against this backdrop and level of understanding that the technology needs be applied.
Let us not forget that the foundation of successful BI is the accuracy and timeliness of the underlying data. Data quality is not optional and is difficult to address retrospectively - it is an imperative precursor to the appropriate use of front-end BI tools. Whilst this Report focuses on Vendors that provide such tools and solutions, our opinion is that they should not and cannot view data quality as someone else's problem. This is akin to the milkman delivering sour milk, only to turn round and try to blame the cow! Data quality has an important cultural component, and given that data quality is cheaper and easier to address the nearer the source it can be trapped, employees must learn to understand the importance of getting it right first time.
Once deployed, the technology needs to support and encourage collaboration and information exchange, in order that experience can be exploited and the volume of re-work is kept to a minimum. The organisation should look to exploit the capabilities of fundamental BI components - query, reporting, and analysis - in a bid to reach an all-encompassing view of business performance.
Enterprise Performance Management (EPM) is a key component of IBI. It recognises that whilst enterprise applications can help organisations become more efficient, particularly with their inherent processing and workflow capabilities, they offer little with regards to increasing enterprise efficiency. The days of analysing data and information from these operational silos are clearly numbered - different departments and business functions need access to data that may have been generated or manipulated on the other side of the world. Thus the remit for intelligence tools and technologies must also grow.
Along with the prospect of EPM, the concept of closed loop intelligence is also crucial. Much has already been made of the idea that operational systems can be exploited by using them to feed BI applications, who in turn provide an output which can be fed back to the operational layer. This allows business rules to be modified over time and integrates operational processes with decision support processes. In our view, this remains some way off, and requires closer integration between Enterprise Application Integration, Business Process Management, data Extraction, Transformation, and Loading, and Business Intelligence technologies. However, the concepts are extremely useful in helping the business drive forward with a clear goal in mind.
Technical Issues
IBI is clearly not an off-the-shelf proposition, nor should it be. There is no easy way or shortcut to the end goal, due to scale, depth, and impact of the solutions. There is a tendency for large technical solutions to be berated because of their size, complexity, and costs. Whilst IBI is significant, in terms of the impact it will have on business, it should certainly not be seen as a technical entity in the same way as ERP or CRM applications. IBI actively exploits the investment organisations have made in all areas of their business, from applications, databases, data warehouses, to the network infrastructure, and Web/Internet technologies.
From outlining our model of IBI, the task of positioning BI technology components becomes much easier. Perhaps the best example of this is the use of packaged applications. Vendors such as Informatica and Business Objects have been aggressive in this space, both now claiming to be able to offer end-to-end packaged solutions that overcome the build versus buy dilemma. Whilst it may be possible to 'componentise' certain analytical requirements in terms of source data, models, and reports, this will not satisfy the business' greater requirement for performance-driven IBI. Thus, the packaged route will only, at the very best, act as a springboard for further extension of the BI environment.
This highlights one of the features of the BI marketplace. No one vendor has a solution that is appropriate in every instance. In addition, from a feature and function perspective, there is often very little to choose between the offerings - just about all of them do the basics, and do them very well. This puts the onus on the organisation to be able to set out its vision or strategy very clearly, in order that vendor selection can be based on strategy fit as well as technical fit. Our advice is to look to work with a vendor or vendors whose core competencies are in alignment with the needs of the business. For example, in situations where the onus is on the integration of vast amounts of data from an extremely diverse range of sources, then selection should be biased towards vendors such as Informatica, SAS, and Sagent, that have established and proven capabilities in similar scenarios.
One area of potential technical differentiation that seems to have been overlooked by the BI market relates to the organisation's unstructured data sources. While it is generally accepted that the value contained in unstructured information is considerable, the work and expense to bring structure to it is also significant. Because of this many BI vendors may feel that it is difficult to deliver a credible Return On Investment (ROI) model. Currently many BI vendors have fought shy of tackling this problem, preferring to make their technology investments in more visible and easily justified applications. However, without access to all relevant information, organisations can be operating at a disadvantage, like a car engine working on one cylinder rather than four, or a boxer fighting with one hand behind his back.
Technical differentiation is not easy. In many cases, vendor approaches are uncannily similar both in positioning and technical capability. Any differentiation tends to be short-term and unsustainable, due to the ability of the rest of the market to replicate. Currently, there is a very visible trend towards becoming an end-to-end enterprise player, which is leading pure-play BI vendors towards building platform-based suites of end-user tools and analytical applications, thus providing them with the ability to deliver larger deployments across user communities and business areas, but at a cost. We are now seeing similar offerings from most of the leading players including: Business Objects, Brio Software, Cognos, Information Builders, MicroStrategy, and SAS etc., as they push their solutions forward in the race to provide the first enterprise-wide IBI offering, supporting closed loop operational and business process integration and the holy grail of EPM.
BI solutions are moving on from being the information assimilation toys of technologists and power users, to the stage where everyday business users are looking to use the powerful and flexible information flows that BI solutions can provide. Because of this wider usage, and if businesses are to gain real value from their BI strategies, there is a genuine and growing need for solutions that can be fully integrated with the organisation's other main infrastructure systems.
Market Analysis
When compared to other technology markets the BI sector continues to perform well. Sales growth, although not as strong as at the beginning of the decade, remains reasonably buoyant. However, this in itself is not enough, and BI vendors are currently attempting to make the leap from being providers of point-based, or at best departmental solutions, repositioning themselves as providers of end-to-end IBI solutions.
In effect the market is at a crossroads in its development. Technology suppliers are moving ahead with end-to-end intelligence-driven offerings, but are being faced by a consumer sector that, whilst understanding the value of core products such as query, analysis, and reporting, is on the whole reluctant to commit to extending the use of BI outside its current areas of need.
The BI market in its own right is mature, but the fledgling IBI sector is only at an early adopter stage, hence the ongoing need to promote the value proposition that integrating BI across the enterprise, and its infrastructure systems, represents. At this stage the IBI market has no outright leader. There are a number of well-known and well-established vendors vying for position, including: Oracle, SAS, Business Objects, and Cognos. There are also others, including Microsoft, that recognise the potential that this market has, and are working hard to catch up with the market-leading solutions.
In the immediate future we believe that most of the well-established players will continue to build on their existing market share, and that at the head of the market they will be joined by pure-play vendors such as Information Builders and Informatica. Although there will continue to be no outright market leader, as too many similar and function-rich solutions already exist, we believe that some of the lesser lights will struggle to gain sufficient sales to survive.
It will not be until 2008 that the IBI technology sector reaches real maturity, but over the coming years as its value becomes established, and the leading vendors extend the range of their solutions to include 'Closed Loop' facilities. Then we expect Microsoft to position itself alongside the market leaders. We also expect that a number of pure-play vendors will disappear as larger late entrants look to establish their credentials by boosting their own BIofferings.