Business intelligence refers to the broad classification of applications and technology tools designed to collect, store and analyze raw business data, which can then be used to guide business decisions.
Business intelligence has guided restaurants on which burgers to add, helped retailers determine which customers to target for upselling and guided sports teams to victory. But the business intelligence arena is changing and its reach is growing. BI is becoming increasingly important to businesses as they try to turn data into information. To whit, Gartner found it to be the number one technology priority for 2007.
“Business intelligence is permeating into all nooks and crannies of the business,” says John Hagerty, an analyst at AMR Research. Whereas business intelligence was largely confined to finance and human resource, the increased offerings and developments mean additional uses. “The number of users BI can touch grows phenomenally,” he says. Increasingly, there will be “more insight into more stuff for more people.”
Here are five key business intelligence trends that are having an impact.
Business Intelligence Trend No. 1: There’s so much data, but too little insight.
Here’s one big reason business intelligence is on companies’ radars: the volume and velocity of information (Big Data). More data translates to a greater need to manage it and make it actionable. “Everything we use and everything we buy is becoming an information source and companies must be able to figure out how to harness that,” says Bill Hostmann, a Gartner research analyst.
The problem? “Organizations are recognizing they don’t have the information they need to manage the business,” says Hostmann. The data is there, but it’s trapped in different silos and its accuracy can’t be trusted. For example, how information is entered can vary widely from how it needs to be used to make organizational decisions and, all too often, definitions vary from silo to silo. For example, finance and marketing could define gross margin differently, which influences how and what numbers are reported.
Trend No. 2: Market Consolidation Means Fewer Choices for Business Intelligence Users.
Independent Business Intelligence vendors may soon be a memory. First, Oracle bought Hyperion in February. Then in early October, SAP made a bid for Business Objects. That leaves Cognos and MicroStrategy as potential takeover targets, with speculation growing that Cognos will be next.
On the one hand, there may be some advantages to having large vendors in the business intelligence arena. Traditionally, business intelligence is not a top-of-mind investment for companies, but rather a sort of afterthought once the major application decisions were made, says John Hagerty, an analyst at AMR Research. As large vendors integrate business intelligence capabilities, BI will be easier to integrate into that vendor’s applications. Furthermore, investment in business intelligence may become more of a core decision, he says.
One the other hand, as independent business intelligence companies are acquired by the giants, many practitioners and experts worry that “the software provider you’d like to use will end up in the hands of a vendor you don’t want to do business with,” says Hagerty. Moreover, the company that does the acquiring may not fit into your current architecture; competing technical stacks may became an issue, he says. “What I’m seeing is clients determining which vendor they want to use, then the logical question is, Who’s going to buy this company? It’s on everyone’s mind and that uncertainty causes people not to move or to move to an alternative that they think won’t change.” So market consolidation could make it easier to get BI, but users may be left with fewer choices.
Trend No. 3: Business Intelligence Expands from the Board Room to the Front Lines.
Increasingly, business intelligence tools will be available at all levels of the corporation. Operational business intelligence-which brings business intelligence to employees on the front lines-is growing especially fast, industry watchers say.
Boris Evelson, an analyst with Forrester research, says operational business intelligence will include offerings that integrate data and process dashboards, and event-driven systems that initiate a business process based on certain data conditions.
For example, integrating business intelligence into operational processes could allow companies to react faster to changing business conditions, for example, alerting a call center worker to offer a particular promotion or to potential credit card fraud.
Trend No. 4: The Convergence of Structured and Unstructured Data Will Create Better Business Intelligence.
E-mail, memos, voicemail messages and other sources of unstructured data are rich sources of information, and companies and developers are responding by looking for ways to blend structured and unstructured data for better decision making. For example, retailers could add comments and complaints from e-mail and call centers into a Business Intelligence solution to enhance their market segmentation analysis, says Evelson.
Hagerty agrees: “Getting information that’s not in the typical rows and columns is the next logical frontier.” He adds that this trend holds real promise. “This gives people more information to make the right decision,” says Hagerty. People will no longer have to rely on “gut,” but will instead have more information with which to make informed decisions.