Business Intelligence & CPM
Analyst Coverage: David Norris
The traditional Business Intelligence (BI) market has developed from the simple reporting that has been associated with computer systems since their earliest day. Even today very many companies still operate using historic reporting of what happened, produced as reports, after the event, as one of their most important drivers to management and decision-making.
From simple reporting, BI has expanded to provide ever more sophisticated and readily digested means of conveying critical information. Alongside the reports there are also dashboards and scorecards that focus on Key Performance Indicators (KPIs), and report on their delivery, often with colour coding (RAG: Red, Amber, Green). This can quickly draw attention to things that require attention and to allow things that are operating as expected to be left alone.
BI is now embedded into all aspects of the business and, when purchasing a core system, it is usual for the vendor to also offer, out-of-the-box, a large element of the day-to-day reporting necessary to enable the business to be effectively monitored.
One of the major advances from a simple report is the use of OLAP (Online Analytical Processing). This presents the key facts displayed as orthogonal tables of sets of business dimensions, so sales can be displayed, by time, by region, by product. This enables greater insight without having to wade through the data in a report with its simple structuring. OLAP is central to most Corporate Performance Management solutions, enabling business management and the cost and management functions to see the trends in the data that underpins a business.
Increasingly, the aim is to set targets and monitor progress against targets, with the key performance indicators being made available on the desktop of every decision maker. As they open up their computer in the morning these KPIs enable them to take the right decisions to achieve goals. Systems then aggregate all of the day-to-day operations together and provide senior management with an overall picture. The KPIs are linked from strategic goals through to operational actions, so everyone, every day, is encouraged to operate in a unified, consistent fashion in line with corporate goals.
Business intelligence (BI) is there to support better decision-making. It is a truism, but it is nonetheless fundamental, that you are what you measure, and without BI it is impossible to run any operation effectively. BI used to be the preserve of senior management and Finance, but it is now recognised that for any business to be effective all functions at all levels require the support and insight that BI can deliver. This has led to BI developing into a series of niche products supporting all of the various aspects of a business with tailored support. Whether they are CRM, Finance, Manufacturing, Marketing, Logistics etc, the basics are tailored to make it more accessible to the relevant business functions. As well as being tailored by function, the offerings are also tailored by industry. This means, increasingly, that you have out-of-the-box functionality targeted with delivering a good 80% of the capability required for a given function in a given industry with minimal installation cost and delay in delivering a return on the investment.
Everyone who has to make decisions (and that is spreading down from being just the management to embrace everyone in an organisation) needs support to make better decisions, more rapidly and consistently than they can unaided. Increasingly, it is becoming the case that we all have to make decisions on an on-going basis and, if we are to achieve complex corporate goals, everyone must be aligned and consistent in the application of rules. Therefore BI is becoming ubiquitous and we all need to take an interest, regardless of which department we work in and, increasingly, regardless of the level that we operate at within the company. The financial goals need to link to the operational objectives, they need to link to the responses given to every customer and prospect and all of that is tied together by a business intelligence solution that enables decentralised capability that is timely and consistent.
What we have seen over the last decade has been the development of solutions tailored to individual functions rather than a generic, one-size-fits-all approach. Allied to that has been a movement towards management by exception, with reports detailing everything rarely being the sole means of recording what has happened. Therefore attention is drawn to the things that require action now and everything else is logged but there is no call to action.
Another key trend is for the capability to be delivered out of the box. No longer are the vendors offering a tool kit, it is now expected that you are buying something that will operate from Day 1 to add value and is immediately tailored to the specific needs of each element of the audience.
Alongside this has been a movement away from tabular to far more visual representations, from graphs through to heat maps and other means of conveying complex multidimensional data. These are displayed in ways that can be absorbed more readily by the subject matter experts to assist them to make better decisions.
There is a trend towards moving things ever closer to real time and also a move towards ever larger data sets being used as sensors are now embedded in most technologies. Big data and real time are capabilities that solutions are increasingly expected to offer.
The other trend is towards BI solutions being sold to everyone in the enterprise, with vendors looking to sell a variety of different licensing options according to the needs of different user groups.
From being a rather neglected area tacked on to the end of ERP solutions, Business Intelligence has become central to the offering of all of the major vendors, so market leaders such as Microsoft, IBM, Oracle and SAP all offer the full range of BI solutions.
The market still has many specialist providers and SAS and MicroStrategy are very well known. Specialist vendors are attractive because, for the big players, the BI elements can get rather lost in the sheer scale and complexity of their offering, whilst a specialist has the focus that can be important. The market has opportunities for many entrants to offer their unique perspective on how to bring BI to life for the masses in an organisation. Relatively new entrants such as QlikTech with Qlikview, Tableau, Board, Actuate, Pentaho, and Jaspersoft have all established themselves alongside the big vendors as viable and worthy contenders.
One of the key areas that new entrants specialise in offering is to focus on areas such as ease of use, visual workbenches that avoid the need for specialist skills and also, when you are looking to sell large numbers of seats, highly competitive pricing models. The market can offer a wide variety of ways to address a requirement and the vendors’ offers match the niches, be that for reliability and integration with core ERP functionality, or low cost high productivity, or inventive ways to deliver capability to unskilled users who still require support.