What’s Next for Business Intelligence

March 8, 2004

What’s Next for Business Intelligence

What’s Next for Business Intelligence

By Fern B. Halper

The Business Intelligence (BI) market is continuing to evolve. With a number of vendors such as Cognos and Business Objects rounding out their core set of BI functionality with their new reporting capabilities, the question is: What’s next for this market?

We believe that successful BI vendors should focus on adding analytical depth and dynamic capabilities to their offerings. These capabilities should include:

Business Performance Management: A number of vendors (SAS, Cognos and Business Objects among them) are already offering performance management solutions. Performance management provides companies with a systematic way of monitoring business activities against various targets and goals and (ideally) displaying this visually. This is a natural extension of business intelligence and is critical to a company. What good is goal setting if a company can’t monitor its progress toward the goal? Performance management software helps companies more successfully track, follow through, and iterate on their strategy.

Predictive Capabilities: Most BI vendors provide query capabilities; your basic “slice and dice, shake and bake” (e.g., sales per region). Some go deeper and provide more sophisticated algorithms for analyzing data. We believe BI vendors should have some kind of predictive software in their toolbox, like the SAS Enterprise Miner. These mining tools help to find patterns in very large amounts of data. For example, a company may be generating sales reports and notices a decline in sales. They could use a data mining technique to find the pattern of customers who are leaving their service and then apply this to their existing customers to determine who may leave the service and offer this group some special incentives.

Dynamic Response: BI vendors must be able to satisfy customer requirements in a dynamic environment. They must be able to help their customers respond to challenges or threats in real time. Hurwitz & Associates refers to this capability as ‘dynamic response’. In some instances, it may not be enough to capture and analyze data weekly or monthly; a company may have to do this daily, hourly, or even continuously (in certain circumstances), for example, to determine the effectiveness of a promotion, and whether it needs to be altered.

All of these techniques can be very powerful. Of course, much of this is not new. I remember building Executive Information Systems (EIS) with dashboards when I was at Bell Laboratories in the 1980s. I used advanced artificial intelligence techniques to predict customer activity in the early 1990s. I built systems to continuously monitor financial systems. Of course, most of the technology was home-grown. Now the technology exists to really put it into action and companies need to harness this power.

The challenge for both the leaders and contenders will be to demonstrate the VALUE of this kind of technology to executives that may not be quantitative thinkers. Visualization will be important for these executives. Additionally, companies will need to have the skill set to deal with this kind of software, although vendors are trying to make it easier for customers to use. And, of course, businesses must be able to execute on the information and knowledge that they are generating. The upside for BI customers -being much more responsive and competitive – is definitely worth it.

Fern B. Halper is Principal and Senior Consultant of Hurwitz & Associates, a consulting, research, and analyst firm focused on emerging software markets. She can be reached at fhalper@hurwitzassociates.com

 

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