Digital information is exploding – and doubling every 18 months, according to analysts. Given that information is the lifeblood of many organizations today, businesses must take a strategic approach toward information strategy and architecture to ensure scalability, reliability and an infrastructure that delivers on business needs today, as well as into the future.
When it comes to managing their information, business intelligence (BI) is top-of-mind for most businesses. It tops Gartner Inc.’s list of technology priorities, and rapidly is becoming the core of mission-critical applications. Most Global 2000 organizations are acutely aware of the need to better manage information; many companies consider it a corporate asset. But while businesses may recognize the value of their information, they struggle to manage and organize this content explosion of images, e-mail and presentations.
The following trends represent topics that interest our customers the most. They play an important role in the evolution of BI as companies begin mapping out strategies to manage all of their information assets – structured and unstructured data alike.
Consolidation heralds BI’s maturation
Last year, vendor consolidation was the overriding theme of the BI world. Three major specialists – Cognos, Hyperion and Business Objects – were snapped up by larger technology players in rapid succession. More acquisitions are expected this year.
This consolidation offers some benefits to customers. CFOs are eager to reduce the number of IT suppliers, while CIOs expect vendors to handle more integration. However, many benefits have not yet been realized. More than anything, the consolidation of the vendor landscape represents the maturation of BI as a technology platform, ready to take its place alongside related information management disciplines such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM).
Operational BI brings new opportunities
As companies focus on spreading BI tools throughout the organization, operational BI is transitioning from last year’s buzzword to a top priority for 2008. Operational BI pushes business decisions closer to the business event by putting timely information into the hands of operational-level workers for decision-making. Indeed, Gartner estimates that by the end of 2009, 90 percent of Global 2000 companies will have mission-critical BI and data warehouse systems – up from less than 25 percent in 2007.
More companies look to widely distribute BI insights via analytics to mission-critical applications.
Few companies have explored the myriad opportunities – from preventing identity fraud to improving supply chain efficiency – available by fully embracing operational BI. As this effort matures, companies will focus on a plethora of technical, political and organizational challenges.
Analytics becomes critical to executing business strategy
Analytics has emerged as a mainstream business topic this year, especially for marketing and other areas outside of finance. Thomas Davenport’s influential book, Competing on Analytics, stresses the use of analytics as a strategic differentiator. Many companies today are using applied analytics for executing business strategy, not just for financial or process efficiency.
The rise in operational BI also is driving increased use of analytics. Companies are starting to link ERP, CRM and supply chain management systems with analytics tools. The product of this linkage is real-time decision-making to optimize processes, production, pricing and other variables.
Business driving data quality
Master data management (MDM) and data quality have been prominent trends the last two years. As companies first embraced the notion of building a common data language, they then struggled with the organizational and technology barriers of achieving this. In 2008, MDM remains a front-burner issue, but now, data quality is moving beyond IT to become a part of the business agenda. As the strategic importance of information such as BI becomes more apparent, IT and business are becoming more than partners: They realize they must be joined at the hip.
The previous “toe-dipping” into MDM is now giving way to major commitments. In 2008, companies will accelerate the governance process by having master data strategies relevant to their industries. As the intensity of interest in MDM increases, there will be a divergence of vendor strategies. Customers and vendors realize product data and customer data require different approaches. Vendor positioning will evolve as customers expect MDM vendors with product data solutions to have specific industry expertise. Other MDM vendors will shift to a customer-centric data focus.
Governance shifts into three-part discussion
In recent years, governance was a top trend. Companies finally figured out it was a crucial element of BI strategy. Despite this consensus, the number of well-formed governance committees and processes remained few. In 2008, however, companies will begin to move from theory to practice, accepting that real-world governance is neither tidy nor linear.
At the same time, companies will recognize that governance plays out in strikingly different ways at three levels within the organization: enterprise, intra-divisional and local. The overriding conflict is that differing business needs can cause each of these levels to implement governance that is at odds with the others. Consequently, as companies implement real-world governance, they must prevent this situation. The starting point is deciding at which level governance is most important. To navigate through different interests and points of view, many companies will benefit from using an unbiased facilitator.
Recognizing the value of unstructured information
In C-level suites, executives now realize that some of their most valuable information about customers, suppliers and the market reside outside their database servers. It is buried in e-mails, instant messages, PowerPoint presentations, audiocasts, webcasts, and other unstructured data.
New federal court regulations involving document discovery also require companies to find better ways to manage and search unstructured data. The combination of regulatory pressure and opportunity are propelling the next phase of BI information value: turning unstructured data into actionable insight. This reflects a growing appreciation that managing unstructured information with the same discipline and rigor that BI solutions bring to structured data offers great opportunities. BI technologies will evolve to address some aspects of this challenge.
In the past year, companies have taken initial steps to develop a framework to deal with unstructured data. Throughout 2008, many CIOs will face heightened pressure to find this data; inventory, classify, assess and archive it; and determine how to properly exploit it, while at the same time, demonstrating a return on investment. While the amount of talk about unstructured data will soar this year, action will lag due to technological and financial challenges.
Appliances shift into second gear
As companies move to narrow down vendors and consolidate BI tools, they still must find creative solutions to immediate problems. The surge in installations of data warehouse appliances in 2007 largely reflects lines of business dealing with system performance issues. The vast majority of appliances have been sold as disposable or recyclable technology, sidestepping IT’s concerns for increased manageability.
With appliances continuing to make headway in 2008, companies will seek appliances built on industry-standard technology that easily blend with existing systems management tools. Look for appliances that speed time-to-value, while integrating comfortably into existing BI infrastructure.
Managed spreadsheets signal new pragmatism
Many users have refused to give up their familiar spreadsheets for modern BI tools, which they find cumbersome. Consequently, spreadsheets are primary culprits in the proliferation of unmanaged data. In the year ahead, BI tools and Excel spreadsheets will become a duet, and not continue on as competing soloists.
Improved integration of backend BI systems and Excel spreadsheets as the user interface, coupled with other initiatives, will provide the opportunity to truly implement “managed spreadsheets.” This will allow workers to use desktop tools to analyze data, viewing it in a familiar, productive manner. However, the spreadsheets will not be used to assemble and integrate the data, preserving the underlying data’s audit trail.
BI joins the Internet cloud
As BI expands to new types of users, the way they will expect to use and manage information is being shaped by their Internet use in off-hours. Portals and other technology represented the first tentative steps of the “Googlization” of BI. This hugely empowering shift will play a key part in the rise of overall information management. In the year ahead, a combination of Web 2.0 technologies – including blogs, Wikis and instant messaging – will become part of the BI delivery mechanism. Accessed via the cloud, they will reshape how BI is experienced.
A service-oriented architecture (SOA) will be the means of delivering enhanced capabilities in the BI cloud. SOA has moved from last year’s topic of conversation into the long-term plans of many companies. Its adoption will provide organizations with the crucial underpinning to successfully exploit the potential of Web 2.0 technologies, the cloud and operational BI. The adoption of SOA to enable operational BI also will quash any lingering questions of BI as a service.
The magic mix: meeting the need for BI talent
As BI is more broadly distributed throughout the organization to enhance decision-making on critical issues, from the executive suite to the factory floor there is a growing need for qualified personnel to drive this evolution. Broader and deeper deployments demand senior BI practitioners who are both computer scientists and MBAs, able to deeply understand statistics, data analysis, business processes, and their specific industry. Meanwhile, the growing demand for BI skills, along with top-down pressure to reduce costs, is forcing senior officials at many companies to reconsider offshore outsourcing.
BI has become integral to day-to-day operations, propelling the technology into mission-critical status. As a result, companies are moving from simply recognizing the importance of issues such as governance to taking major steps to address them, while also keeping an eye on future opportunities, such as leveraging unstructured data.
These trends indicate BI has entered a new era where companies are increasingly dependent on it at all levels. Executives, customer-facing employees, and knowledge workers in-between routinely apply actionable insights derived from vast data stores to support growth, reduce costs, and minimize risks within their businesses.
About the Author
Valerie Logan is the worldwide leader for Consulting and Integration within the Information Management unit, Technology Solutions Group, HP. In this role, she is committed to establishing HP as the premier provider of information management and business intelligence professional services globally. Logan joined HP in early 2007 as part of the acquisition of Knightsbridge Solutions. Logan has more than 16 years of experience in the areas of integrated business intelligence, business performance management, process management, large-scale program management, knowledge management, change management and advanced analytics.