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The New Era of BI and Business Analytics

  • July 01 2004, 1:00am EDT
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"The new generation of business intelligence and business analytics is about the ability to truly empower everyone in an enterprise or extended enterprise to have the information they need so that the insights drive their actions and interactions," proclaims Larry Barbetta, vice president and general manager of Siebel Analytics.

"There has been a real shift to using the information captured in transactional systems - ERP, CRM and supply chain - to try to derive insight. If you think about this broadly," explains Barbetta, "we've seen the operating efficiency side of the equation taken about as far as it can be taken. Now, businesses are looking to move to the next step - which is about how they can become more effective and how they can use their information to run their business not just efficiently, but effectively. They want to know how they can do a better job of retaining customers, attracting customers, pricing their products and so on. They want to be able to effectively use the insight from all of the customer data."

Barbetta is not proposing that traditional BI tools are no longer needed. "It is clear that the BI market is moving far beyond traditional query and reporting and OLAP. Those capabilities will always have a very vibrant place within an organization, but there is now a need for an entirely different class of capabilities. We really are seeing a new set of needs. Reporting will continue as will data marts and budgeting and planning and data warehousing. There are certain types of operations that require the rich historical and contextual data that resides in the data warehouse. Our products enable the best of both worlds. They can hit the data warehouse with everything, and they also have the ability to reach outside of data warehouses when that is needed."

"Focusing the new generation of business analytics/business intelligence," says Barbetta, "requires some very difficult things technically. It is very clear that complete information across multiple data sources - including external data - is needed, and it is needed in a timely manner. In many cases, you need real-time data. If there is latency in a decisioning system that requires an organization to wait for everything in the world to get into some magical place, it's just too late. The opportunity will be missed. We see the need for BI and business analytics to be able to provide insight from larger volumes of data across boundaries and sources with a real-time capability. The other important aspect is making access truly pervasive throughout an organization."

Most people recognize Siebel Systems, says Barbetta, as the dominant player and market leader in CRM. What they may not know is that a little more than two years ago, Siebel made a strategic commitment to participate in the analytics market - both in the context of CRM and even beyond CRM. He adds, "Last year's IDC market research indicated that Siebel has become the leader in customer analytic applications - which is cited by IDC to be the fastest growing segment of the entire analytic application and overall business intelligence marketplace. Siebel has moved from being just the market leader in CRM to also being the market leader in customer analytic applications."

Year Founded: 1993
Publicly Traded NASDAQ: SEBL
Number of Employees: Approximately 5,000
Revenue: $1.3 billion (2003)
Net Income: $72 million (2003)*
Number of Customers: More than 4,000

* Pro forma net income of $72M for 2003 reflects results from ongoing operations, excluding restructuring and other changes.

Siebel Analytics' meteoric rise is the result of a number of key factors. "When Siebel decided that they wanted to move into the analytics space, they didn't just buy an analytic application company," explains Barbetta. "Siebel realized that what was needed was a new kind of platform to deliver the analytic solutions. Thus, in October of 2001, Siebel announced its plans to purchase nQuire, the company I had founded. We had released our nQuire Suite, an open analytical platform, in late 1999. That infrastructure became the core of Siebel analytic solutions and provided, in effect, pre-built, pre-designed data warehouse technologies underneath it, and pre-built metrics addressing industry-specific issues tailored by role on top of that. We are providing more and more capabilities in our total solution. All of our applications are built on a single comprehensive platform that does everything from reporting to complex business intelligence to predictive analytics. The platform has points of integration where appropriate, and we provide a coherent, comprehensive business analytic technology stack to meet the new needs. We are operationalizing the analytical capability so that it can fuse all of the analytic capabilities into an organization's business processes, making it broadly available and having feedback loops so it gains insight from what it does, which affects what happens next time." Additionally, Barbetta notes that predictive analytics must work in collaboration with business rules and business constraint, and Siebel Analytics hides that complexity from the users.

The origins of nQuire provide interesting insight into the factors that led Barbetta to found the company and explain why the acquisition has been so successful. "We put together a great team to found nQuire," says Barbetta. "Because of the massive explosion in data, the proliferation of data sources and the requirement for more timeliness or zero latency, we saw the need for BI and analytic capabilities that would be pervasively available within and outside of the organization. This was confirmed when I got home after a long meeting with a set of executives from a Fortune 50 company. My five-year old daughter was at the computer, and I found it sobering that she had the ability to find basically anything on the Internet, while the executives I had just met with spent the whole day telling me how they had no access to any useful information. What's wrong with that picture? I viewed it, as did a number of people on our team, as a failing of BI technologies in the current state. We put our heads together to solve that problem. When we were approached by Siebel in the fall of 2001, we realized that Siebel could provide a serious distribution infrastructure and access to significant capital that would enable us to reach our full potential. Siebel was - and is - very strategically committed to enterprise analytics, and the rest, as they say, is history."

Larry Barbetta, VP and General Manager of Analytics, Siebel Systems

The second factor contributing to the success of Siebel Analytics is that, according to Barbetta, "We continue to invest very heavily in our products and drive innovation - both in our analytic applications and in our enterprise analytic platform. We recently made available a major new release of those products and reiterated our commitment to expanding our leadership in the customer analytic applications market as well as focusing on the necessary next generation in enterprise business intelligence capabilities," says Barbetta. "We grew our license revenue in analytics as reported in Q1 more than 80 percent - and that's organic growth, not growth via acquisition. We continue to have significant momentum," he adds.

While many mergers and acquisitions falter and fail to meet expectations, the acquisition of nQuire by Siebel Systems has been a win/win for all - Siebel, the nQuire team and current and potential customers. "Siebel is a great company," proclaims Barbetta, "and we've had great success. The strategic fit is incredible. We have a huge customer base, and the company takes satisfaction of customers very, very seriously. I'm sure you've heard many companies talk about customer satisfaction, but our customers are our number one priority. In fact, if I'm in a meeting - even if it's a sales call - and I receive a phone call from a customer with a problem, I respectfully leave the meeting and solve the customer's problem. The company's culture is very clear that the success and satisfaction of customers is our number one priority."

The Siebel Enterprise Analytics Platform includes: Siebel Intelligence Dashboard to provide personalized and intuitive interactive access to information; Siebel Answers to provide full ad hoc analytic functionality via the Web; Siebel Delivers to create scheduled or event-triggered analytic processes that detect problems and opportunities; Siebel Analytics Server to provide powerful BI and analytic capabilities; and Siebel Data Mining - high-performance data mining model execution in a server environment. Additionally, Siebel Systems provides a comprehensive family of industry-specific data models, analytical models and pre-built templates for rapid deployment in their Siebel Customer Analytic Applications to enable organizations to know what has happened, what is likely to happen and what should happen next so that they can improve customer retention, reduce churn, execute more targeted and effective customer acquisition programs and increase customer value.

Larry Barbetta

Barbetta's entire post-college life has been spent in the information technology related areas that now form the core of business intelligence. His extensive experience spans relational databases, OLAP, data warehousing, ETL and analytics. In addition to being one of the early members of the team at Metaphor, Barbetta founded Prodea Software, one of the first companies to have OLAP on a relational database. Prodea was acquired by Platinum Techology in January of 1996. At Platinum, Barbetta held the position of senior vice president responsible for business intelligence and remained with the company for the term stipulated in the acquisition. After spending some time working on the OLAP Council, Barbetta again took the entrepreneurial plunge and founded nQuire. He joined Siebel with their acquisition of nQuire in 2001.

The Siebel Enterprise Analytics platform has already gained wide acceptance. "Seventy-five percent of the Siebel analytics customers have licensed the enterprise edition Siebel Analytics to access a wide range of enterprise sources," says Barbetta. "Such access is necessary to provide true insight. For example, our analytic application for the pharmaceutical industry - one of the more than 20 vertical industries that we serve - has well over 150 analytic applications. It's a pretty rich stack. The pharmaceutical industry, for example, needs information about doctors' prescription-writing behavior and information from other sources that aren't part of Siebel at all. Thus, our analytic applications have pre-built interfaces into syndicated third-party data. And, if someone has the misfortune of not having Siebel, we can even run Siebel Analytics on top of those other products."

"Siebel Analytics customers are the largest and, in many cases, the most analytically sophisticated companies around the world, and they are using Siebel Analytics to obtain a level of enterprise business analytic capabilities that they simply could not get with traditional tools. We have a complete analytic application, everything from pre-design to relationship management to data warehouse data models to pre-built ETL," states Barbetta. "We provide an ETL engine as part of our solution through a strategic partnership with Informatica. We provide pre-built metrics, meta data and dashboards tailored by role. You can see that we're not talking about just a box of reports. We're talking about how you integrate insight into decision-making processes and how you tailor that to the role of the individual. All of our applications also speak to three roles at a minimum. They provide an executive role so that, for example, the head of sales and the CEO can see what's going on in the pipeline with closed revenue. They provide a sales management role so that regional management can understand who is performing, who isn't, what's going on and what's changing in the forecast. The individual front-line employee role helps them understand how they can use insight to drive action and more intelligent interaction. In each case, we're trying to bring about the democratization of information and use it not just to measure and monitor behavior, but to help use insight to increase performance."

Barbetta is quick to point out that an analytic application should not be constraining in any way. "Think of it as a way to start to deliver immense value in a proven way that reflects best practices in an industry - that you can very easily, flexibly and rapidly customize. We have many customers who have gone from nothing to full production with hundreds or thousands of users in less than three months, and I'm not talking about mapping it on top of an existing data warehouse - which you can do in a matter of minutes or hours. I am talking about having a high analytical infrastructure, everything from a data warehouse to analytically driven alerts and triggers based on business conditions."

"We are the leaders in customer analytic applications. We have a solution that is proven and represents best practices in the industry, and we continue to evolve and make it even better. Our solution is delivered on a great set of platform technologies that is truly best of breed. Our customer satisfaction rate is incredibly high, the reorder rate is exceptional and our customers are able to do things that they simply could not do with traditional tools," emphasizes Barbetta. "We're not trying to be all things to all people - SAS and SPSS provide excellent statistical analysis - but we know that there is a series of critical business applications and business issues that need to be addressed that require predictive analytic capabilities delivered to a broad number of people in a more real-time and operationalized manner to intelligently guide how they act and interact. The ability to deal with the complexity and disparity of data sources and deliver analytical depth and richness to the front line is really what the market is about. We absolutely can deliver that set of capabilities - the new generation of BI and business analytics."

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