The appetite for business intelligence (BI) tools has never been more voracious. A survey of 1,400 CIOs earlier this year by research group Gartner showed that BI was now top of their technology priorities, with BI budgets expected to rise by 5% on average in 2006. That, according to Gartner, will mean spending on BI will total $3.2 billion by year end, an upswing of 7%.
Such growth is being driven in part by tougher regulatory environments – such as the US’s Sarbanes-Oxley Act and the IFRS global accounting standards – that require businesses to have a much more comprehensive and confident understanding of their operations. But, more broadly, the momentum stems from a general acceptance of the value that BI can bring to the business.
With that in mind, organisations are working to deliver analysis and reports to a much wider internal audience while, in many instances, embedding analytical intelligence within their business processes. The goals are highly laudable: greater operational efficiency and better decision-making.
That delivery of intelligence falls into two camps, according to analysts at Forrester Research. They draw a distinction between ‘analytic reporting’ (functionally rich, query/OLAP/analysis mechanism targeted at a limited number of power user producers of BI applications) and ‘enterprise reporting’ (format-rich report authoring mechanisms for a large community of casual user report consumers).
For reasons of performance, end-user skill levels and scalability, organisations have historically had little choice but to provide those capabilities via separate tools.
But over the past year, BI platforms have emerged that try to handle those multiple reporting demands. Not only do such platforms aim to lower overall reporting costs by reversing the proliferation of tools and their supporting infrastructures (Forrester reckons most large companies have between five and 15 BI tools and some have as many as 20), but their web services foundation enables BI capabilities to be embedded more easily within enterprise process flows.
By providing business intelligence tools that are more tightly integrated into business processes, not only can decision-making be aligned to strategy right across the organisation, but weak buy-in by end users – a historical trait of many BI projects – can be overcome. With BI a part of the user’s processes, rather than a separate activity, non-adoption becomes eliminated.
If best-of-breed BI software vendors can make that jump to a BI platform, says Gartner analyst Kurt Schlegel, they will be able to maintain their price points despite the commoditisation and consolidation of products. Furthermore, he adds, a BI tool that is integrated deep into the fabric of business processes is a BI tool that is difficult and expensive to replace.
The provision of the reporting tool as a web service allows it to be easily integrated, either with other software services, such as on-demand application services or into service-oriented architectures. There is one caveat, however, to Schlegel’s recommendations. Should business process alignment become a high priority for BI buyers, then business applications providers are likely to appear more frequently on the shortlists of many organisations. Those applications, after all, already support the business’s core processes.
The response by the pure-play BI vendors will be simple: to ensure their integration with business applications is as painless as possible. Forrester observes that organisations have already begun the long process of standardising on fewer, if not a single BI reporting and analysis platform. But that, it says, will take larger organisations between three and six years to complete – a lifetime in the highly competitive BI market.