• Strategy
  • CFO Magazine

Designs of Intelligence

As companies extend business-intelligence software to the masses, they should think before they deploy.

Companies go to enormous
trouble to capture and store data,
and then go to even more trouble
(and expense) when they attempt
to extract and use it. The systems
for accomplishing the latter task go
by various names — business intelligence
(BI), performance management,
analytics — and while a technologist
could make a case as to
why one category differs from
another, for most corporate
employees the distinctions are
largely moot.

A current spate of mergers
will further blur those boundaries,
as BI vendors rush to add
performance-management applications
to their “product footprints”
and performance-management
vendors expand into analytics. A
few companies already cut across
all three categories, and the world’s
largest software vendors, including
IBM, Oracle, and SAP, are rumored
to be exploring acquisition targets.

That urge to merge is
motivated at least in part by the relative
success of the (broadly
defined) BI market, which is booming
at an annual rate of 11.5 percent,
and the business-performance-
management category, with
growth of 12.8 percent, compared
with overall growth in the software
market of just 8 percent. In turn,
that growth is being driven by the
spread of the technology to more desktops
in more parts of the organization.
Traditional BI software has typically been
the province of technologically astute
analysts, who use it to generate reports for
employees who need to know what the
numbers say without learning how to
make them talk. But newer performance management
and analytics applications
are being provided to employees throughout
a company, from the executive suite
to the call center.

Companies have tried to provide those
capabilities to the masses before, with
mixed success. Business intelligence is
sometimes branded as a classic example
of “shelfware,” software that is bought but
not necessarily used or even deployed.
There are a number of signs, however,
that the situation is changing.

For one, mergers take some pressure
off companies to stitch together products
from multiple vendors in order to address
both the back-end data needs and the
front-end presentation and interface issues
that BI projects entail. While a genuine
merging of disparate technologies typically
takes a year or more following an acquisition,
at the least a vendor may now be
able to offer a broader family of products
and help clients piece them together. Over
time, analysts say, that integration will exist
out of the box and may be largely invisible
to end users, who may find themselves
tapping the powers of BI and related technologies
without even realizing it.

That, says IDC analyst Dan Vesset, is at
the heart of what he terms the “third wave”
of BI. In this latest wave, “a vast population
of employees whose BI requirements have
not been met” by the initial waves of mainframe
and client-server-based technologies
will find that new Web-based software
improves information flow and decision-making.
Expanding the reach of BI, says
Vesset, will depend not only on technological
advancements, but also on how companies
learn from past mistakes and match
their investments in software to their business
practices.

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