Knowledge is Power

Dave Kelley, Contributing Editor

1/1/2005

Business Intelligence (BI) wasn't the hottest topic of conversation amongst IT types in 2004, and to be perfectly honest, it likely won't be the belle of the ball in 2005 either. But that doesn't diminish the importance of BI to consumer goods (CG) companies. In fact, some argue that BI's importance is actually increased by the fact that the decision of which BI applications to deploy, and when to deploy them, are so often left to individual departments because the IT managers' attention is otherwise occupied. That being the case, BI applications have traditionally been forced to play the role of utility infielders, capable of fitting in and providing decent performance just about anywhere in the lineup. But just like the utility infielder who suddenly discovers home run power and becomes a critical part of a ball club, BI could well be on the verge of realizing that knowledge -- especially actionable knowledge -- and the ability to use it really is power, and so becoming one of the truly exciting areas of CG technology.

The Integration Factor
At the moment, the buzzword one hears most frequently during BI discussions is "integration". It's a word that cuts right to the heart of the problem that arises when numerous and differing BI applications are deployed within a single enterprise. It's entirely possible, for example, for a single CG company to have disparate vendors or applications responsible for ERP, e-commerce, CRM and so on, even within departments, but much more so between regions. This might work out okay if the departments or regions are essentially independent, but in the real world, it's an IT migraine in the making, as the various BI tools must somehow be coerced into functioning as a unit. That's why the development and introduction of full-fledged BI suites is one of the major trends in this sector at the moment. CIOs are seeing the logic and financial benefits of replacing a hodgepodge of tools with a single, integrated -- and integratable -- suite.

Competitive Risk
As Mark Smith, Ventana Research CEO & senior vice president of Research, wrote in a VentanaView, there are real competitive risks that come with sticking with a motley crew of BI tools, including:

Unattainable "single version of the truth" -- With different tools accessing information, different information can be the result: marketing forecasts one number, sales is getting another number, finance is getting yet another number, and the CEO is wondering which number is right.
Limited visibility - The transparent organization is a goal, and not easily achieved with disparate information systems.
Security risks - Using multiple BI tools means multiple security infrastructures (if they have them at all), which increases security risks and costs associated with protecting multiple disparate systems.
Failed performance management initiatives - Information is an essential component of performance management. Without it, performance cannot be improved.

That being the case, it's no surprise that there's a strong and ongoing move toward consolidation, standardization and integration among BI vendors. This move should continue, as more and more CG companies realize the financial and structural improvements these suites offer compared with jury-rigging a solution using several legacy tools.

Creating Compatibility
Another type of integration is looming as a BI issue: Integration with Microsoft Office. While Office is unquestionably the 700-pound gorilla of productivity tools, it works surprisingly poorly with many BI applications. Exporting, importing, and cutting and pasting between Office and the BI application are often exercises in frustration and aggravation.

This wasn't such an issue in the past, when Microsoft Excel could handle much of the overlap between Office and the BI app. But as the overlap grows, so does the need for integration. Microsoft, obviously, is working on this integration, but so are others, such as e.Spreadsheet from Actuate and MicroStrategy's Office package.

As centralization continues within enterprises, this integration is going to play a greater role in BI applications.
And speaking of Actuate, a midsummer development could be an indicator of what the midterm future holds for BI. In August of 2004, Actuate announced it would be joining Eclipse Foundation, the open-source advocacy community, as a board member and strategic developer. This puts Actuate in league with fellow Eclipse strategic developers IBM, Intel, and QNX Software Systems, and gives the company a platform to promote its Business Intelligence and Reporting Tools (BIRT) project, which will develop open-source BI and enterprise reporting applications.

This made Actuate the first Eclipse member to provide open-source BI technology for application developers using the Eclipse development platform. More importantly, according to research from Bill Hostmann and Mark Driver of Gartner, "this new involvement with Eclipse and its 10,000 daily downloads enable to Actuate to define open-source BI and reporting technology." This won't give Actuate the power to change the world quite yet, since open-source reporting technology is still in its infancy (some say it's still neo-natal, but I'm more optimistic).

Gartner, in fact, says it will be at least 2007 before open-source BI reporting technology will have a chance to affect the overall market, but smart eyes will be staring hard at Actuate and Eclipse starting now in an effort to gauge just when to jump on board the open-source bandwagon.