There is much talk about the impact of the (feared) recession on Business Intelligence. Most analysts are expecting a slowdown in customer spending and vendor revenues. I see their point and I am somewhat inclined to agree but there is another side to this. There is an expression that goes something like: you have to repair the roof when it’s not raining. In other words IT spending is obviously up during financial upturns. BI tends to benefit from this as well. But as the economic weather gets rough there is even more need for information. As the budget is cut back people are looking at smart things to save costs, recognize trends early, and identify the most valuable customers and so on. This is exactly what BI enables you to do. So my expectations are that an economic downturn will hit the general IT market much harder than it will impact BI.

I was asked by an IT magazine in the Netherlands to come up with a couple of practical tips on BI service delivery. In my opinion the most important element in service delivery is creating a optimal mix of all crucial elements. My submitted three practical tips cover design, build and implementation. However it is just a start. Please join me to create a top 10 in BI service delivery.  [1] When designing a Business Intelligence environment always consider target groups and type of usage.Target groups: Some users such as managers often have the need for a high level dashboards with little detail. However other users like analysts need lot of detail and powerful analysis tools. Every target group needs their own environment in form, function and frequency (of data refresh). Usage: There should be a mix of fast (ad hoc) and structural (more long term) BI solutions and products for the end user of a BI environment. [2] Excellent BI specialists are a scarce resource but are crucial for the success of the BI environment. Do not cut back on quality. Make sure you have a proper mix of ‘hardcore’ geeks as well as business architects or BI visionaries. In order to make the costs controllable consider outsourcing parts of your BI environment. A good starting point would be technical realization (build) and application maintenance.  [3] Don’t stop when it’s finished. After the technical realization of the BI environment the real work just starts. A critical success factor for this is the BI Competence Center. This center should mix IT and business components to ensure the optimal use of BI within the organization. It should be the BICC that pro actively supports the users in their daily work. In this phase it is no longer about high level sponsorship but more about working floor thought leadership.

Times they are changing. Last year has been tumultuous for BI at best. We have seen the BI market consolidate into a few remaining mega vendors. But there was also room for niche players especially the ones focusing on speed, visualization or collaboration. So what will 2008 bring? To quote from Star Wars: “Impossible to see the future is”. But let’s give a try anyway. There are five mega trends that I foresee. Some have been around for quite some time and some are new. The first one is called: (1) Increase: Business Intelligence must be able to cope with considerable increase in both data (size) and speed (real time). The second one is (2) Integration: Business Intelligence will continue to integrate with operational processes but will also be more aligned with strategy. The integration of (un)structured data will increase. Finally, Business Intelligence will integrate with other business applications or ERP systems. Third, and my personal favorite, is (3) Insight: Business Intelligence will continue to become more intuitive (less end user involvement) showing an increase in advanced visualizations but also more analytic (more end user involvement).The fourth is (4) Interactive: Business Intelligence will be more reciprocal by nature; creating a dialogue between system and end users as well as sharing information and collaborating within performance networks. Finally, number five will be (5) Industrialization: Business Intelligence development will be characterized by a more industrialized approach using standard development frameworks opening up the possibility to outsource.  Increase will be mostly characterized by the need for real time information (partly due to the fact that BI becomes more operational). This will be supported by tools like Netezza and Teradata. They can also support the growing process of data retrieval from vast amounts of data. Integration of unstructured data (text, search, documents, agents) for example in a document warehouse (using tags) sitting next to the data warehouse will be the wave of the future. I expect Google or Attunity to take the lead here but the original BI vendors (Cognos, BusinessObjects) have also been investing in this. Although the market is more or less divided among a few remaining vendors it is still possible that we will see some more integration. This will be partly triggered by the fact that BI will be used on all levels: strategic, tactical and operational. This means BI tooling must support strategy development as well as pervasive BI (it’s everywhere). The renewed interest in open source Business Intelligence (Pentaho, Jaspersoft) is a clear counter reaction against the market domination due to vendor consolidation. Creating Insight today will be the one mega trend where I expect the most innovation to come from. It is a hot topic and fun to watch evolve. Here you will find things like intuitive intelligence (Strategy companion) or decision engines supporting your daily work (Fair Isaac). Also advanced visualization will help the end user get more grip (fractal edge) on things. Triggered by the success of “competing on analytics” or “super crunchers” we will see an rise in the use of analytics, strongly combining informatics, statistics and business knowledge. Perhaps here lies the opportunity for the long awaited promise of data mining? A clear and much appraised trend is the sharing of information with other people either inside or outside your own company to create mutual benefit. But it is more than just sharing the information it is also about sharing the reasoning behind it. How have we come to this conclusion and do you agree? It is asking feedback or contributions to your problem solving by your stake holders. All the characteristics of the web 2.0 can also apply here. This can also be done by using a trusted third party to solve your BI wishes by providing BI as a service. As BI is getting more mature by the minute I expect that we will see a standardization of best practices resulting in an industrialized approach in (standard) BI development. BI factories, often based in typical outsourcing countries, can provide high quality, low cost ready-to-use BI solutions. Some people say that after all the consolidating this will be a boring year for Business Intelligence. But if I look at these five mega trends I can’t wait. Happy new Year.   

Detailed insight into crucial data and events is a necessity for organizations that want to navigate a constantly changing, information-rich environment. Intelligent organizations are constantly reading, analyzing and reacting to information inside and far outside the companies’ boundaries. Information thus becomes a corporate asset, which infuses itself into all strategic and operational parts of the business. Traditionally BI enables business decisions through information access, by delivering the right information, at the right time, in the right way. However nowadays BI does much more than then decision making. It also monitors and supports, among other things, crucial business processes and is much more then ever embedded into daily business. Therefore it can be said that BI is crucial for the strategic, tactical but also the operational needs of an organization. Many companies have service level agreements (SLA) between (mostly internal) parties to formalize the process of data delivery or extraction from data sources and/or the publication of information to business stakeholders. With a traditional focus on decision making or decision support only those SLA have been created with just that scope in mind. This has resulted into a situation where a problem with data delivery or information publication had to be resolved within for example a timeframe of 24 hours or even more. In other words, due to it’s reactive or even reflective nature, the repair of the BI problems have not been the highest priority for many organizations. This makes sense if you compare this to critical business applications such as cash registers or ATM for banking. They support the crucial daily operation and should get top priority. But with the changing nature of BI, becoming more operational and supporting real time business processes, it is time to redraw the SLA and giving (almost) top priority to BI systems as well.

Detailed insight into crucial data and events is a necessity for organizations that want to navigate a constantly changing, information-rich environment. Organizations that know how to connect the use of data to their strategic objectives are more intelligent: they become ‘Intelligent enterprises’, constantly reading, analyzing and reacting to information inside and far outside the companies’ boundaries. Information thus becomes a corporate asset, which infuses itself into all strategic and operational parts of the business. As a result it’s only natural that more and more organizations want to start a Business Intelligence initiative.  However BI initiatives cost money. This is often an inhibiting factor for many companies. At the one hand they need BI to face the business challenges of today’s market but at the other hand they need some kind of justification before they can start. This justification can take two shapes or forms.  The first and most well known is the business case. Basically this is a quantitative analysis of all expected costs versus the expected yield or profit resulting into a return-on-investment. The business case involves calculations on lower costs, more effective processes or less manpower. Those are all very tangible and well defined attributes. Business cases are often made by business departments in order to obtain a budget.   The other is less known - probably far more difficult - but with a higher yield. It involves a non quantitative analysis based on vision. Driven by thought leadership an ideal or goal is formed. Unlike the business case there are no tangible attributes. The advantages or benefits can be things like qualitative better decisions or accessing unknown data sources. Often these initiatives are considered to be vague or soft. There is a promise of profit not a proof of profit or like I call it: return-on-intelligence. This vision based justification is often made on an organizational level in stead of departmental. In my opinion, in this day and age a company can not allow it self to remain without business intelligence and survive the increased competition. A BI environment is a necessity just as much as a LAN or transactional business applications. Therefore they need BI initiatives even without a cold business case. I encourage all companies to take this vision based approach. Not only will it lead to more commitment from your employees, it will also support the execution of your strategy. And in the long run – there is proof enough for that – it will also pay back on its investment.

This is the second part of my posts about the ‘universal truths in business intelligence’. Check out what Frank Buytendijk thinks at: http://blogs.oracle.com/frankbuytendijk/2007/12/04#a95 4. BI projects need high level sponsorship. The reason for this is that we want to introduce Business Intelligence in the organization. It is all about creating awareness and enthusiasm. So do we really need a high level sponsor or manager for this? Perhaps in a very rigid hierarchic organization you do. But we Dutch do not deal well with a top down approach. The real innovation comes from the work floor, we think. I think organization can benefit much more from a highly committed thought leader.  3. BI development should be done incrementally. What would be the opposite of that? Probably some kind of big bang approach where all the functionality can be delivered in one single release. That sounds nice but often this is not possible for BI. To start with I find that when users start to interact with the new BI system they come up with new insights followed by change requests. A successful incremental approach focuses on the identification and prioritization of the most beneficial increments or slices. This should be based on the priority of the objective (is this a key process, is it in line with our strategy?). Other qualifying criteria can be availability and quality of the data. Each slice should be a complete solution. BI projects – just as in real life – should have a first things first approach. Delivering incrementally – keeping the long term view in mind – allows for faster speed to value. So I agree with this truth.  2. BI projects require a business driven approach. Any BI project or program should have business value. Creating a business intelligence environment without a goal is a mission impossible. We do not need data warehouse projects. We need project that can create more sales or reduce churn. A data warehouse or business intelligence project can support this goal. However I do not think that it is should necessarily be the business user who initiates such a project. IT can play an important role in taking the lead by showing what is possible. Especially by creating a prototype. See also my other post on IT push or pull (http://www.biguru-online.com/2007/12/04/active-push-or-passive-pull-role-for-it/).   1. BI needs one version of the truth? Has anyone of you ever played bullshit bingo? It was one of the sources of inspiration for this post. You take 10 of the most used words and cross them out during a meeting when used. Single version would be on the top of that list. I hope that from this day forward no one will ever use this expression again. This was born out of fear for multiple version in spreadsheets across organization. And frankly, I cannot stand the expression anymore. Also I totally disagree with it. Understanding is always determined by its context! And all communication should differ for each target group. Creating a single version – let alone the office politics involved in that – is an utopia. Instead let us focus on a single version of the facts (data quality, lineage and so on). To me the focus should be on the definitions or meta data. As long as the definition is clear you can have different version per context. So are there any ‘truths’ that we missed in our top 10? We would appreciate your suggestions. Also if you disagree with what I said (or agree for that matter) please post a comment. Remember this blog is all about the possibility to be an online BI guru yourself. It is a platform for an open discussion about BI – not just a floorshow for my thoughts.

I get most of my creative ideas when I have the time to contemplate. Often this happens under the shower or in the gym. I always thought the main reason for this was that since I had nowhere to go physically my mind could wander instead. I turns out that I am right, but only partially.  Recent studies show that the emotional state of people highly influence the way they process information. If you feel happy you are more receptive for outside stimuli. You start to see the beauty in things. Also there is an increase in creativity when you are in a good mood. The other way around, depressed people tend to focus on themselves and their problems. So now you know: I like taking showers.  Design can make a product more attractive. Attractive things create positive energy and state of mind. When asked to choose between products that basically do the same - have the same performance, price and so on – people tend to choose the attractive one. The Apple I phone is probably one of the best examples. So if attractive things work better (or at least create the feeling that they do) and stimulate creativity why is it that a lot of Business Intelligence solutions still look like spreadsheets, matrices or boring lists? I always encourage my colleagues to make their solutions super fancy sexy. Meaning that it should not only hold the correct data but at the same time it has to look good too. By presenting the information in a creative, nice looking way you increase the acceptance and usage of the product.  For Business Intelligence solutions the presentation and visualization are just as important as the content. Do you agree?

Ask anyone in this industry for his or hers definition of Business Intelligence and you get a thousand different answers. Is that a bad thing? Not necessarily, but it does imply that we still have not agreed upon some of the basics. It is an interesting paradox that although we are apparently not 100% sure about what Business Intelligence is we do have an opinion on how it should be or where it is going.  Over the last couple of years a common understanding of Business Intelligence has been created holding some universal truths firm in its grasp. Frank Buytendijk and I came up with a Top 10 of those universal (so called) ‘truths’. (Frank is Vice President of EPM Strategy for Oracle’s Business Intelligence and Performance Management Global Business Unit. You can find his blog at: http://blogs.oracle.com/frankbuytendijk/). We decided - just for fun – to turn the BI world as we know it around and see what comes up if we take the opposite view. Here is our Top 10:

1. We need one version of the truth.
2. BI projects require a business driven approach.
3. BI development should be done incrementally.
4. BI projects needs high level sponsorship.
5. BI = decision making process.
6. BI is going to be real time (BI 2.0).
7. Information democracy: BI for everyone.
8. BI cannot be outsourced.
9. Merging : BI, CI, EI, EPM, CPM, BIM…
10. BI is the answer to everything. 

I will start with the bottom five (saving the top 5 for a future blog). Frank will react to this on his own blog. This way we hope to create a dialogue or diablogue (dialogue + blog). Please feel free to join the discussion and share your opinions with us and all other readers.    10. BI is the answer to everything. No, almost every answer creates a new question. Data is often limited, not captured or of low quality. Therefore one can say that BI is NOT the answer to everything. In the best case scenario it is helpful.   9. Merging: BI, CI, EI, EPM, CPM, BIM. There are so many acronyms and abbreviations that I am not even sure that we can agree on all the two- or three letter words at the beginning. And even if we agree that BI stands for Business Intelligence - I doubt that we can agree on a common definition - let alone talk about merging. To my opinion it is not a merger but a different manifestation where the core or main point may differ per area (focus on strategy, or client, or process…). In each case: it should be information centric.  8. BI cannot be outsourced. A lot of BI professionals tell me that BI cannot be outsourced because of its specific nature (mutual development with end users, incremental approach, and so on). One of our clients has already outsourced its BI environment as long as 8 years ago. The proof of the eating is in the pudding.  7. Information democracy: BI for everyone. Information is critical for almost each person, process or technology. We in the western world produce more data than products. But in order to transform the data into information, knowledge and action you need to add your personal experience, time and effort to the mix. Some people will and will benefit from this. Some people will not and can live without it. BI is not for everyone but at least for the smart people.  6. BI is going to be real time (BI 2.0). If you view BI as strategic there is no need for real time data. But if you view BI as more operational than it will come in handy. In my view BI supports better decisions by making a strategy, process or objective - accountable, adjustable or adaptive. For accountability you do not need real time, for the other two you do. Therefore my answer would be: it depends.  5.BI = decision making process. Ouch, tough one. As mentioned previously I think that BI supports better decisions. It is up to the end user if they make use of it. They can make a decision that is in full conflict with the number crunching. Therefore BI is not the same as the decision making process it is just a supporting tool. I look forward to reactions from Frank and all the other readers.

“Who loves not wine, women and song; remains a fool whole life long”. This is an old German expression which means having fun. I wrote about “weib” yesterday (Cybersex and Business Intelligence). So today I will focus on the “weib und gesang”.  Regular readers of my blog know that I am very enthusiastic about the upcoming trend in decision making to rely more on statistical analysis. The umbrella term for this is called analytics. Recent books about this topic are: Competing on analytics by Thomas Davenport and Super Crunchers by Ian Ayres (www.supercrunchers.com). You are no longer a nerd if you think that regression is cool again. For the non mathematical persons: Regression is a statistical procedure that takes raw data and estimates how various causal factors influence a single variable of interest. Ayres describes in Super Crunchers how analyzing massive databases can provide greater insights in human behavior. One of his case studies involves the work of Oren Ashenfelter. Oren can assess the quality of Bordeaux wines based upon regression (basic variables are: rainfall & temperature). There is much skepticism about his work among wine connoisseurs. Robert Parker – probably one of the world most influential wine writers - said: “it is really a Neanderthal way of looking at wine”. However it turns about that Ashenfelter predictions are much more reliable than the old fashioned way. The week from 5-12 October was democracy week. Over forty broadcasting companies worldwide paid attention to this on radio and TV. Here in the Netherlands we had a mock competition for a new national anthem. The current one which is called The Williams song – or Wilhelmus – is considered to be the oldest one in the world. You can hear the competing songs on this website: http://www.wijzijndebaas.nl/page/liederen. As a follow up to this program there was a segment on a company called Platinum Blue. They have come up with a tool that is called Music X-Ray. This is a complex computer program that breaks songs down into 30 or so component parts’ including rhythm, melody, harmony, beat, cadence, timbre, pitch and gives each a number. All hit songs fit the same pattern. If your song matches the pattern this increases the change of success dramatically. They claim that human decision making (does it sound like a hit, can we promote it like a hit) delivers a 10% success rate. However if you add a third factor – statistical analysis – this score goes up to 75%. You can see their presentation on youtube: http://www.youtube.com/watch?v=8lUewWlLgLo. Just the same as with the wine there is a lot of criticism. The X-factor judge Louis Walsh said: “The only technology I would use to pick a hit is my ears. I would not listen to a computer,” The pattern is the same in both cases. The traditional or old fashioned way of doing business is challenged by a new approach based upon statistical analysis leading to much skepticism. In my view this discussion is too much binary digit, true or false (I wanted to say black-and-white but I am still a technology consultant). In both of the above mentioned cases it is just a tool or technique - a guide to making the final decision, which always comes down to a human being. It is not about replacing the human decision making process with statistical analysis. But on the other hand there is enough evidence to support the fact that adding analytics to the decision making process leads to increased results. This can be done by creating a dialogue between Business Intelligence tools and their users, instead of a one-sided approach of data delivery only, leaving the decision making process to the end user. This going back and forth between user and tool can lead to something that I call intuitive intelligence: leading to insight without (much) thinking.

Kaplan & Me [Click to open]

Yesterday was the launch of Microsoft Performance Point Server in the Netherlands. Keynote speaker was Robert Kaplan (Business Balanced Score Card, Strategy Maps). In the afternoon we did a workshop with Kaplan and some of our clients. This gave me the opportunity to ask him some BI questions.

The first question was what role BI can play for the BSC? He answered that BI is very important. Not only for the reporting framework but especially when it comes down to analytics. (See also: http://www.randomhouse.com/bantamdell/supercrunchers/ and http://www.amazon.com/Competing-Analytics-New-Science-Winning/dp/1422103323). According to Kaplan analytics are crucial during the review of the strategy. Domain experts can crunch the numbers to come up with new and perhaps more effective measures to drive performance. In his opinion all organizations should have an analytics group.

I also asked him what he thinks about two trends in BI: real time (or 2.0) and performance networks or ecosystem BI  (sharing your information with your stakeholders).  Kaplan mentioned that real time BI often is only considered for operational dashboards. However if these operational dashboards are alligned with the strategy they can also be your early warning system for more strategic decisions.

He also strongly believes in sharing information to improve performance, but he underlined that a feedback loop is crucial for this. This must start within your own company, allowing your own employees to react (for example by e-mail) if they find deviations. He gave an example of a large petrol company. Their strategy was to improve the convenience for the customer. The truck drivers, delivering gas to the stations, were very sceptical: “guys who do strategy don’t drive trucks”. But after a while they started calling the head office informing them about rude personel, unclean rest rooms and so on. Sharing the strategy was enough to start a change even before an improvement program was set up.

In summary:

1. Analytics are crucial for reviewing strategy (regression is cool again).

2. Real time BI can be an early warning system for strategic decision making.

3. Information sharing implies a feedback loop.

4. Communicating about strategy is almost as important as excuting the strategy.

[Click on image to enlarge]

With great thanks to my collegue Ron Torrico, the outcome of a small internal poll. No big suprises here (IBM), although the number #2 Microsoft ? Time will tell.

My prediction? Although IBM and Microsoft are most likely a strategic partnership with Informatica sounds great. It plays the independence card and also completes the Cognos BI platform which lacks a robust ETL tool.

In order to adapt to faster changing circumstances, organizations are more and more in need of a (near) real time supply of information within the decision making process. This means gathering transactional data from inside the organizations processes (often structured data) or on the outside edge (often unstructured data).  The true business value of business intelligence (BI) can be found in the ability to efficiently gather useful information from a diversity of both internal as well as external information sources and by sharing or interacting the intelligence with the ecosystems partners and customers to improve mutual performance.  This information centric approach is also reflected in the BI or Corporate Performance Management (CPM) suite of various vendors: integrating both organizations processes such as planning, consolidation and forecasting and search / knowledge management solutions. This makes sense as the most productive fields within the BI/CPM market are at this point in time: financial consolidation, BI platform, budgeting, planning and forecasting. This makes BI/CPM suite vendors a tasty bite. BI/CPM vendors often have similar products build upon the same type of technology. Therefore there are little distinguishing characteristics between the various vendors. It is therefore more than likely that technology is not the driving force behind the recent storm of BI/CPM consolidation. Keeping or gaining market share is their main goal. From a technology standpoint there is a case to be made that the innovation will come from small companies focusing on niches, such as: strategy & implementation tools, meta- and master data, advanced visualization, text mining, search or business activity monitoring. These will be likely candidates for a content driven acquisition. A strong trend in the BI/CPM market is the integration between hard- and software. The main push for this is the focus on real time transactional data for the decision making process. This will result in a merge between (transactional) platforms/databases and (interactive) BI/CPM solutions. A dominant position for platform/database vendors such as SAP, Oracle, IBM and Microsoft is to be expected.  These BI/CPM platform vendors will end up with a large number of duplicate tools. They will have at least two or more tools fit for the same solution. They must choose if they want a technical integration (complex, time consuming) or to thin out or rationalize their stack (kill your own darlings). Over time this heated BI/CPM consolidation will result in new product stacks, making recent tool selections obsolete and future ones a challenge.  Recent BI/CPM acquisitions Some of the most striking BI/CPM acquisitions so far have been:

• SAP acquiring Pilot Software, Outlooksoft and Business Objects;
• Oracle acquiring Peopleosoft, Siebel and Hyperion;
• Microsoft acquiring Proclarity (and the release of their Performance Point Sever);
• SAS announced a strategic partnership with Teradata (just separated from NCR);
• Cognos acquiring Adaytum, Frango, Celequest, Applix.

SAP acquires Business Objects SAP has announced that it intends to acquire Business Objects in friendly takeover. They will pay 4.8 billion Euros for this deal. Business Objects will operate as a stand alone business but part of the SAP group. SAP is an established ERP vendor and market leader in Enterprise or business applications. They have a strong transactional platform which includes BI (Netweaver) and CPM (Outlooksoft) capability. SAP has had limited success with their own BI solutions. The main reasons for this are their weak front end capabilities and problems with unlocking data from non SAP sources.  Business Objects is a pure BI player with very strong reporting, analytics and CPM capabilities with many industry models available, focusing on the mid market. They have been the market leader in Business Intelligence. Business Objects has entered the CPM arena late in the game, some say maybe too late. They have made up for this by buying SRC, ALG and Cartesis, allowing them better access to the finance and CFO office. However as they are still busy with the XI integration this must be quite an extra burden. With SAP being strong in enterprise applications but falling behind in BI, this acquisition of the Business Objects makes up for this. Not only can Business Objects help them with their front end solutions or metadata, they can also give them the much wanted business user access and mid market expansion. Business Objects can also help with Non SAP data integration.  Does that mean that everything is like hand and glove between them? Some analysts question the robustness of the Business Objects ETL tool, especially in complex SAP environments. But the main challenge will be the integration of the all the (previously) acquired companies and their solutions. Having more than one solution for planning, reporting, consolidation, analysis or score carding will also create much confusion with their clients on which will survive the cut.  In summary, this acquisition allows SAP to have the transactional platform and the interactive Business Intelligence (Business Objects) and Corporate Performance Management (Outlooksoft) solutions. However they will face a large product overlap in the CPM area: planning, budgeting, financial consolidation. Having said this, technology probably has never been the main driver for this acquisition. This can purely be considered as a strategic reaction against the Oracle / Siebel /Hyperion merger.

Today a collegue of mine told me that a lot of clients think of business intelligence as a dirty word. He says that there is a shared perception among end users that business intelligence is synonymous with expensive (takes for ever, costs a lot of money).  Therefore he is not longer calling it BI but “information supply” instead. I think he has a point. Is this something that BI professionals are aware of? Or have we been working so hard in making BI a mature (Business not IT) discipline that we forgot our clients on the way over? 

There was a time that we did not name it BI or Data warehousing. Instead we were just talking about reports or lists. Little by little we added more tooling and techniques. Than we introduced magic words like: corporate performance management or pervasive business intelligence. But basicly it is still about getting information from data. There is nothing intelligent about that. It is just a (technical) trick.

The real intelligence (or magic) happens when end users start to interact with the information we provide for them. When they use it for decision making or advanced analysis or process improvement and so on. So we manage the information which they again use for the management of their business.

Business Intelligence is dead. Long live BUSINESS INFORMATION MANAGEMENT

Yesterday SAP announced that they have agreed on a friendly take over with Business Objects. As they have already acquired Outlooksoft they can now work on integrating these seperate environments to create a complete DWH/BI/CPM platform. That means that SAS (privately owned), Teradata (just seperated from NCR) and Cognos are the last 3 men standing. So when will IBM annouce that they have bought Cognos? Or wil Microsoft swoop them away first? Fun times!See also my previous blogs: BOBJ for sale & kiss of death (vendor consolidation)

In the Volkskrant (a Dutch newspaper) I read two interesting articles The first one was titled: “Radiologist in India monitors Ethiopian baby”. The second one: “Drilling for oil in Iraq using a webcam”. If you take one step back and analyze these two articles you will find a very simple underlying model they have in common.

In both articles you have an expert (the radiologist or the oil driller) monitoring a remote process (baby development or oil drilling) and if needed taking action.

The main reasons for this remote monitoring are the lack of know-how, expertise or information in the vicinity of the process itself.

The main benefits of this remote monitoring and action taking were cost reduction and less time between the actual event and the appropriate measure.

Now apply this to the Business Intelligence domain.

The expert (Business Intelligence professional or knowledge worker) monitors the key business processes (for example: supply chain, time to market or product delivery), runs analysis’s and  if needed takes action by intervening in the process or contacting the process owner.

If I close my eyes I can see a mission control center – like the bridge in Star Trek – where the whole company and its surroundings is being monitored for better performance.

Make it so.

Day 1 in Mumbai. What an overwhelming city this is. After ‘surviving’ Mumbai rush hour I will never complain anymore when stuck in traffic (ok, maybe a little). But this is probably the only city in the world where you don’t get RSI from clicking your mouse but from honking your horn (if you have been here you know what I mean). After driving through the slums – overpopulated with people so poor they cannot afford to buy shoes - back in my hotel room I found two chocolate cupcakes with fresh whipped cream! So does this mean that we should consider the Indian IT solutions to be at the bottom of the value chain as well? Or at best be of mixed quality? Is India only a country for low cost IT resources – or is there more than meets the eye?

I have spent the day talking with people that know how to do business. And their knowledge of Business Intelligence (BI) far exceeds the ‘simple’ data warehousing and reporting capabilities. Ok, it’s confession time. I also thought of India as a quick fix for our resource problems. Let’s just dump our specs over the wall and let the Indians build it. But guess what? They have strong knowledge of consulting – in for example supply chain or customer value – and of BI integration, and development and even outsourcing and maintenance. Some customers have said to me: “India is a great concept but that does not work for BI. Also all our documentation is in Dutch. This will not work”. But can you believe that today I met some Indians who actually spoke some Dutch! They had worked on a project where originally all requirements were in Dutch but were translated (in India) into English. After they were checked again in the Netherlands they started building the solution in Dutch using an English/Dutch glossary as reference. By working together with the end customer in the Netherlands they quickly picked up some of the lingo. So I have seen the proof here. A lot of successful BI projects (91% of the customers valued it as good, very good or excellent). And although I have to admit that BI is not standard and will probably be different for each customer or even subject area, I am pretty sure these guys can solve anything thrown at them (or already have).

So here are my questions for you:
• How mature can a BI solution or project from India be?
• What are the limitations? What are the opportunities?
• Is it limited to offshore development based on onshore requirements? Or can they do more?
• Where will it end?

Please let me know what you think of this.

I hate to say I told you so - but I am going to do it anyway! I wrote in my blog about vendor consolidation that the innovation would come from small companies and that the larger (BI) vendors would acquire them. Well yesterday Cognos annouced they acquired Applix - a 200 person company specialized in performance Analytics.

See what cognos writes about this on their own website:

Cognos to Acquire Applix
Cognos has announced the execution of a definitive agreement to acquire Applix, Inc., a publicly held company based in Westborough, Massachusetts and an industry leader in analytics. With this acquisition, Cognos expects to further extend its position as a leading independent provider of financial performance management.

Applix will complement Cognos flagship products—Cognos 8 Planning, Cognos 8 Controller, and Cognos 8 Business Intelligence —specifically in the area of financial performance management. Applix performance analytics will give customers new capabilities to analyze and optimize financial performance. This will include improved control and leverage of large, complex financial performance data; strong finance self-service capabilities for “what-if” business modeling and scenario management; new solution areas including profitability analysis; and innovative technology, including a patented, 64-bit, in-memory multidimensional OLAP server

For as long as I can remember, the market for Business Intelligence tools has been more or less stable. Sure, sometimes a new player entered or another disappeared. But on the whole, the market was dominated by a couple of vendors. The most exiting news came from new versions, upgrades or a technological breakthroughs. To put it bluntly: you could choose either Cognos or BusinessObjects or if you were running SAP you could go with BW. Than things slowly started changing. Instead of Business Intelligence we suddenly found ourselves talking about things like Corporate Performance Management, financial consolidation, budgeting, planning, dashboards and scorecards. And we embraced the tools that came with it. Our work was no longer limited to reporting and analysis. We were proud that after so many years finally the strategic value of Business Intelligence was recognized. Thus changing the playing field completely. The focus in BI was shifting from a technical toward a business solution.

The BI and platform vendors quickly recognized this also and have been embracing these tools as well. They bought up companies that had tools specializing in this specific area and integrated them – as best as they could – in their own product portfolio. SAP for example acquired Outlooksoft (Consolidation) and Pilot Software (Strategy Management). Oracle acquired Hyperion (after they bought Peoplesoft and Siebel) – the market leader in planning, budgeting and financial consolidation. Microsoft acquired ProClarity (Analytics) and made a firm entry to the BI/CPM marketplace when they launched their Performance Point Server. Cognos – a pure BI player – acquired Adaytum and Frango and created a complete CPM solution. Finally BusinessObjects- still busy with integrating Crystal – bought Cartesis (consolidation) to complete their CPM offering that they already started building on when they acquired SRC and ALG Software. However is this buying up – this consolidation – not the kiss of death? Where is this going to end? Why this focus on applications rather than information?

Business Intelligence has come a long way. It is now closer tied with the business processes as ever before making the basic data (quality) that comes from this also more and more important. BI still can be an aggregated report of last month sales on a highly accumulated level but it can also be operational dashboards monitoring key business processes on a real time level supporting split second decisions. This makes a strong case for the platform vendors. They have the applications to support the business processes, capture the data and report on them. An integration of software and hardware therefore seems to be unavoidable. Cognos is one of the fist BI pure players to understand this. Their launch of Cognos Now! – which integrates a hardware server and dashboard for realtime monitoring – is proof of that. They might well be the first BI platform vendor.

But basically all BI/CPM vendors have more or less the same products and use the same technology. Even the corporate take over strategies are being copied resulting into a concentration of BI vendors. The real innovation still has to come from small companies that specialize in a niche of business intelligence such as: strategy implementation, meta- and masterdata, advanced visualization, text mining, search and business activity monitoring. These small companies will probably at some point in time be bought by one of the large BI vendors. After all, Cognos Now! was Celquest before. The real challenge for the large BI vendors will than be the technical integration of all these tools. It is easy to make a Ms Powerpoint presentation of where this new application fits in your product portfolio – but making it work with these other tools is a far more difficult thing to do.

Finally, will we end up with one or two BI vendors with a standard set of Business Intelligence tools? No, I don’t think so. The BI tool set will always be dynamic. Remember? After DDS (Decision Support Sytems) and EIS (Executive Information Systems) came Enterprise Reporting and OLAP (Analytics). Than came the consolidation, planning, dashboard and scorecarding tools. Nowadays, the streaming servers and realtime monitoring tools are being wheeled into the business. There will always be something new. The platform vendors will take a dominant position in the BI market but there will always be room for vendors with a focus on BI only. It is almost like the Olympics. Sometimes you need the decathlete to jump, run and throw the javelin and sometimes you just need a 100 meter specialist.

But I am not sure that the real innovation will come from these companies, though they may well acquire the innovators to embed them into their enterprise solutions. Like a thousand points of light, there are individuals and small companies out there already thinking in a really innovative manner about what Business Intelligence could be given new capabilities and technologies.

Who are they? I can’t wait to find out! Let me know what you have seen or are thinking, and that also means the big players too.