Gartner Gives BI a High 5

"You only find out who's swimming naked when the tide goes out." The famous Warren Buffett quote has been used more than once in reference to the fate awaiting many businesses in today's economic crisis, and according to a Gartner report about business intelligence (BI) trends for 2009, one revelation driven by the recession will be which organizations have it together -- and which are struggling.

The report, "Predicts 2009: Business Intelligence and Performance Management Will Deliver Greater Business Value," is a collaborative effort by nine Gartner analysts specializing in BI, and pulls no punches in terms of the fate awaiting many companies: "The economic crisis will reveal which enterprises have a sound information infrastructure and which do not," the authors write. The five predictions for the year in terms of BI and the enterprise are as follows:

  1. By 2012, business units -- not technology departments -- will be held responsible for more than 40 percent of the total budget for BI projects. Although technology departments might be making decisions about what technology products to run, business units will be the ones deciding what to do with those tools once they're in the enterprise. Business people are therefore driving the need for analytics, reporting, and performance management -- and will have more say in purchasing decisions for BI tools. Gartner analysts warn, however, that organizations need to be wary of creating information silos. Technology departments often have more insight into which applications will integrate with existing business processes. Because of that skill set, business units and technology units need to work together in choosing, implementing, and using BI tools.
  2. Through 2012, more than 35 percent of the top 5,000 global companies will make uninformed decisions due to underinvestment in information infrastructure and business-user tools. Analyst Bill Hostmann writes that the recession forces an enterprise to stay aware of dramatic changes in its business and to rethink strategic and operating plans. "The economic crisis will reveal which enterprises have the information and tools to support management decisions and which do not," Hostmann writes. To avoid "swimming naked," organizations need to create a task force to respond to executives' changing information and analysis needs.
  3. By 2010, 20 percent of organizations will have an industry-specific analytic application delivered through software-as-a-service (SaaS). As SaaS continues to permeate the enterprise, Gartner estimates it will increasingly appear within enterprise BI portfolios. Analysis by Kurt Schlegel brings two important ideas to the forefront:
    (a) Reliance on the SaaS model will shift the balance of power in the $5 billion BI platform market, he writes.
    (b) Second, the emergence of on-demand tools will spread BI industrywide.
    More often than not, current BI tools lead organizations down the path toward data silos. BI delivered through SaaS allows for a single data model -- and avoids silos. Schlegel recommends that organizations view these SaaS products not as standalone applications, but as tie-ins to the internal enterprise data warehouse.
  4. In 2009, collaborative decision-making will emerge as a new product category that combines social software with BI platform capabilities. A recent Gartner BI survey indicates that 71 percent of respondents think that improving decision-making is the top driver for BI investments. Gartner research has shown that individuals seek advice from peers when making decisions -- a trait that plays out equally in the consumer world as well as among enterprises. As social collaboration becomes increasingly important throughout the enterprise, Gartner estimates that BI vendors will look to bring social aspects to their offerings. The report states: "The emergence of social software such as Facebook, MySpace, and Deli.cio.us presents an opportunity for savvy [technology] leaders to exploit the groundswell of interest in informal collaboration." The analysts use the following example of how social media could impact business intelligence: When making a decision about how much to invest in marketing a new product, users can tag what consumers say is important to them (as Key Performance Indicators, or KPIs) when purchasing that product. The attributions are saved for future sales of that product. The BI platform could then send alerts to the business user if and when a given KPI no longer supports existing decisions or processes.
  5. By 2012, one-third of analytic applications applied to business processes will be delivered through large-grained application mashups. "Enterprises should not trust their mega-vendor to solve all their integration problems," the analysts write. Relying on a sole vendor as a one-stop-shop for technology may seem appealing and easy. The authors write, however, that an organization opting for the "single throat to choke" might miss out on innovative, best-of-breed technologies that are not delivered via mega-vendors. The analysts recommend that organizations in need of internal data restructuring look to large-grain application mashups, which provide a more cost-effective way to embed analytics without a major re-architecture or overhaul of existing applications.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

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