Business intelligence (BI) is changing drastically because of five important trends that are reshaping the role BI plays in the business and in the IT infrastructure. They are not going away; and we will have to adapt BI to them if we want it to continue to be an important business tool.
The first trend is the proliferation of BI analytics into vendor software for customer relationship management (CRM), enterprise resource planning (ERP), supply chain management (SCM) and many other software applications. For many business executives, this challenges the need for BI as a separate capability. If they get analytic capabilities with their application investment, a separate data warehouse and analytic technology seem like an additional and unnecessary expense. The idea here is that BI is simply an analytic capability.
The second trend is the increasing number of independent BI applications. These applications provide an analytic solution for a specific need, such as financial analysis to meet the demands of the Sarbanes-Oxley Act and scorecard or dashboard products to provide executives with a picture of company performance. This trend also adds to the proliferation of analytic technology.
The third trend is the increasing independence of businesspeople in the decision process regarding BI. This further decentralizes BI as vendors sell their applications with analytics and their independent BI applications directly to businesspeople. This diminishes the importance of technical issues in BI product selection. BI best practices are clear: The quality of a BI infrastructure directly affects the quality of delivered information. Proliferating analytic technologies can cause major obstacles for creating the centralized BI infrastructure necessary for success.
The fourth trend is the ongoing practice of many BI vendors to add functionality to broaden their market niches. The added functionality isn't to improve their core product, but to expand their product offerings into other areas either through acquisition or development (e.g., vendors adding ETL capabilities to their BI analytic products, or vice versa). The BI space has always been crowded; but in the past, almost all the vendors offered a distinct capability. Today, that is not the case. As a result, the BI space has become more confusing.
The fifth and most challenging trend is near real-time BI. Gartner Research estimates that from 2002 to 2006, the percentage of BI deployments that provide instantaneous data currency will grow from 11 percent to 29 percent. Gartner estimates that approximately 25 percent of bank BI deployments need data that is no more than one hour old. Non-financial companies are close behind at 18 percent. The pressure for better data faster is everywhere.
Each of these trends demonstrates the central role that analytics and BI play in the business world today. Everyone needs analytic capabilities and fresh data readily available. However, challenges will arise in organizations where the needs behind these trends are not addressed as part of a centralized BI infrastructure. These challenges are:
- Pressure: Business needs for more information, better analysis and faster delivery will continue to increase.
Proliferation: BI analytics will appear in more software, more BI applications will be developed and more business problems will need to be solved.
Problems: Lack of information integration, data volumes increasing exponentially, fragmented information delivery and increasingly complex technical environments.
Business needs for more information, more BI applications, information integration and effective information delivery are the design concepts behind BI. Can it be that making BI work is like shoveling against the tide? The view from the trenches where BI professionals fight their battles is:
Pressure, Proliferation and Problems: This is business as usual because most companies are reactive when it comes to IT planning and execution.
Data Administration and Information Architecture: These important functions are viewed as supporting roles to application delivery and implementation.
IT Funding and Prioritization: Decision making focuses on projects that address business unit managers' needs, which are usually operational needs to improve applications.
ROI or Payback: Because calculating return on investment or payback for BI is difficult, BI and information integration projects do not get fair consideration.
The result is that more attention is paid to application and technical infrastructure needs than to data management or BI. Yet every business needs good, solid, correct and unquestionably reliable information to be a competitive business.
BI is not simply the ability to have analytics available, nor is it a single application. Success comes from having information available when it is needed with the integrity and quality that make it absolutely reliable. Tackling the lack of information integration and fragmented information delivery requires a centralized BI infrastructure that is the heart of an information delivery architecture.
The solution is to adapt BI to these trends while continuing to stay the course with enterprise BI, build on BI as one component of an effective information delivery architecture and develop management's appreciation for the use of information to manage the business. No one ever said it would be easy.
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