Gartner Business Intelligence Summit 2011, held in Los Angeles earlier this week, attracted a record crowd of more than 1,000, showing that business intelligence remains one of the hottest enterprise software markets.
Gartner analyst Bill Hostmann discussed how the business intelligence (BI) market is evolving in his opening keynote. A few years back, BI was all about technology and data warehousing, he said; now it has evolved to embrace areas such as analytics, performance management and business processes.
"We need to shift our brand identity, as BI is now about making better decisions to forward business objectives," said Hostmann.
He laid out a scale of BI maturity. The bottom rung is occupied by those organizations that are "Unaware." These companies may buy BI tools, but don't know how to use them.
"If you buy a violin, that doesn't mean you can play in the orchestra," said Hostmann. "It takes years to acquire the skills required."
The next level is "Opportunistic." These companies might have implemented some form of performance management and analytics and are harnessing them internally. They may even be working on improving data quality. But their projects are largely ad hoc and not well thought out. Various areas of the company may be operating on different analytics engines, for example. Gartner places about 30% of firms in this bracket.
The third level is "Standards." There are just too many skills, technologies and processes that fall under the BI umbrella for companies to avoid standardization. The establishment of standards, said Hostmann, begins with technology. Gartner estimates that 25% of large enterprises are in this category.
At the "Enterprise" level, standards are fully in place. Agreement exists among top management on BI strategy, performance measures and common definitions. Plenty of know how has been accumulated on how to do complex business analyses, and how to implement governance over BI actions. However, relatively few companies have attained this strata.
The final level is "Transformative." What Gartner means by this is using BI to change an entire industry. Hostmann gave the example of an engineering organization that deals with mining, dams, hydroelectric power and offshore drilling. Most of its projects are large, complex and take five years or more. Management has two key performance measures: cost and time.
"Decisions made early have tremendous impact on five-year programs," said Hostmann. "This company saved $800 million and established better customer relations by using BI to make better decisions far earlier in the process. The whole industry is now looking at them to understand how to use BI and analysis."
After laying out this scale, he pointed out that you can't easily jump multiple levels. It takes time to develop the competencies needed to evolve.
"You have to set realistic expectations on what can be achieved as you move from one level of maturity to the next," he said.
He then surprised everyone by stating that some companies have overinvested in business intelligence tools and analytics engines. He cited a bank in Brazil that deployed a real-time infrastructure to facilitate decision making. But the technology couldn't be utilized easily, as the surrounding business process stipulated that it took a month to three months to make those sorts of decisions due to compliance and regulatory rigidity.
"You can overinvest in analysis and BI if your processes are wrong or too rigid," said Hostmann. "But tools and technology are often not the hard part. You have to work out a strategy, achieve management buy-in, and move up the maturity curve."