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It is Time to Reinvent Your BI Strategy

Business intelligence (BI) sits at the top of the IT priority list for many enterprises. Enterprises that haven’t paid enough attention now see a need to act, and those that have kept up with BI want to consolidate their siloed implementations. The promises of BI attract any organization, but how do you get started? Enterprises face multidimensional choices, and they cannot start with vendor selection. Tasks such as data governance, matching requirements with logical architectures and picking an experienced architect and implementer should be at the top of the list.

BI is no Longer Just About Reporting

 

Although BI concepts and technologies have been around for more than 20 years, many enterprises still struggle with getting started. Those that have been active in BI now struggle to consolidate multiple BI environments. And even after decades of BI usage, most organizations find best practices elusive.

 

Forrester defines BI as a set of processes and technologies that transform raw, meaningless data into useful and actionable information. The crowded market segment of BI often gets mislabeled, can be very complex and constantly changes. The BI market pulses with alternative approaches, contradictory technologies and hundreds of vendors that constantly move to consolidate, innovate and leapfrog one another.1 Enterprises at the beginning of a perilous BI journey need guidance and help untangling the web of BI complexities.

 

Explosive Data Growth Fuels BI Demand

 

The BI market has certainly seen its ups and downs. It was very hot in the 1990s, when just about everyone was rushing to build a data warehouse (DW) or data mart of some kind. The early 2000s saw a minor retrenchment because most implementations were characterized as complex, costly, and difficult to demonstrate with a tangible return on investment. Now BI sits atop business and IT investment priorities as it sheds its skin in favor of a new model. For first-time purchases, BI applications actually lead the pack of application software priorities with 13 percent of enterprises planning a purchase in 2007.2 Here’s why:

 

  • Enterprises can’t just focus on being efficient anymore. Squeezing more efficiency from operational applications such as ERP, CRM, or SCM, no longer helps enterprises to stay competitive. BI applications are needed for business processes and business operations to become more effective. For example, workflow and rules can be used to efficiently process a customer credit application, but BI analytics can effectively segment a customer population and target credit offers to specific customer segments for a better response and improved cross-sell and up-sell ratios.
  • Explosive data growth demands serious attention. Digital data volumes - both structured and unstructured - are growing by 30 percent per year and will be approaching 1 zettabyte by 2010. That’s a one with 21 zeros! The kind of lightweight spreadsheet-based BI applications common today won’t be enough for reporting on and analyzing mountains of data tomorrow.

The New BI Architecture: Reporting Sits at the Tip of the Iceberg

 

Reporting and analytics - or the so-called “presentation” layer of BI - is just a small part of the BI stack. Real, successful, industrial-strength BI implementations need to account for and include many more layers (see Figure 1). Because no vendor offers all of the components (or at least best-of-breed components) in a single unified offering, enterprises face difficult integration challenges.

 
Figure 1: Business Intelligence Stack

 

References:

  1. In 2006 and early 2007, software giants Microsoft and Oracle acquired ProClarity and Hyperion, respectively. These acquisitions strengthened both buyers’ offerings in BI, and represent a larger trend of ongoing acquisitions in the BI vendor space. See the April 19, 2006, “Microsoft Buys ProClarity: This Small Acquisition Makes A Big Difference In Microsoft’s BI Portfolio” report and see the March 19, 2007, “Hyperion Acquisition Boosts Oracle’s Position In Business Performance And BI” report. In the fall of 2007, Cognos acquired Applix, and SAP acquired Business Objects, continuing the consolidation in the BI market. Source: “Cognos to Acquire Applix,” Cognos press release, September 5, 2007 (http://www.cognos.com/news/releases/2007/0905.html) and “SAP to Acquire Business Objects in Friendly Takeover; Combined Companies to Accelerate Leadership for Business User Applications”, SAP press release, October 7, 2007 (http://www.sap.com/about/press/press.epx?pressid=8360).
  2. In 2007, North American enterprises will significantly increase software spending for new software initiatives and projects. See the November 2, 2006, “The State Of Enterprise Software Adoption” report.

Boris Evelson is a princiapl analytst with Forrester Research specializing in business intelligence. Evelson is one of the driving forces behind Forrester's offerings for information and knowledge management professionals. His current research focuses on some of the latest trends in BI, such as convergence of multiple, formerly separate disciplines of structured and unstructured data, process and data intelligence, real-time BI and many others into overall enterprise effectiveness and optimization.û

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