Business Intelligence - News and Articles

Oracle Buys Hyperion

March 1, 2007 from CRN – “Oracle said it would create a more comprehensive business intelligence software suite following its US$3.3 billion acquisition of Hyperion on Thursday. The two firms said the deal, which is expected to close sometime next month, would allow Oracle to integrate Hyperion's business performance management software into its own business intelligence (BI) product. Oracle's first BI product was released at the beginning of last year.

Hyperion started out primarily as a provider of financial reporting services but has also become successful with its online analytical processing (OLAP) engine, which allows users to quickly analyze complex queries. A few years ago, Hyperion made a strategic acquisition of its own when it spent US$140 million to buy Brio, which gave it an improved query tool…”

180 View – The acquisition represents the growing trend by ERP vendors to provide an end-to-end solution. Initially ERP was a back office application (financials, distribution…) Then it included the front office (CRM, eCommerce…). And now it includes Corporate Performance Management / Business Intelligence. In the short run, this aquisition should be good for all concerned. But what happens when sales fall off as a result of Hyperion prospects who are reluctant to acquire Hyperion because they don't use Oracle ERP systems?

The Magic of BI

September 28, 2006 from SQL Server Magazine – “According to Gartner’s Magic Quadrant for Data Warehouse Database Management Systems, 2006 report (published September 12), Microsoft’s BI platform revenue grew at a rate of 35.9 percent in 2005. And Microsoft’s recent earnings reports (http://www.microsoft.com/msft/earnings/default.mspx) document that Microsoft SQL Server revenue as a whole also grew 35 percent year over year in the fourth quarter of fiscal year 2006. In Microsoft’s press release about its BI growth (http://www.microsoft.com/presspass/press/2006/sep06/09-22BIMomentumPR.mspx), Jeff Raikes, president of the Microsoft Business Division, says:

“Our ongoing BI investments are enabling a transformation of the way people interact with important business information. We continue to evolve our solution set, recently rounding it out with an integrated performance management application, such that our offering will provide customers with a complete, flexible and cost-effective BI solution, one that enables truly pervasive BI across the enterprise.”

Those of you familiar with Gartner’s magic quadrant model know that it breaks vendors into four categories: niche player, challenger, visionary, or leader. Garner assigns a vendor’s standing in the quadrant based on the vendor’s completeness of vision and ability to execute that vision. Gartner’s recent magic quadrant report shows that Microsoft has made great progress across the board in data warehousing and is now on the line between challenger and leader.”

180 View – Here is another indicator of Business Intelligence becoming part of the end-to-end strategy of ERP vendors. Microsoft has a huge advantage over many of its rivals, and will exploit this advantage over the years to come.

BI and CPM markets in 2007: When two become one

January 22, 2007 from IT Director – “For years analysts have asked suppliers "so which market are you in - BI (Business Intelligence) or CPM (Corporate Performance Management)?" Suppliers were somewhat coy about the answer. BI and CPM were perceived as distinct and separate markets. BI was the high margin Cash Cow and CPM was the Question Mark in the portfolio. Suppliers did not want to risk cashflow from the large $7bn BI market by gambling on the smaller $1bn CPM market. Hence supplier commitment to a CPM marketing message or a BI marketing message vacillated depending on whether cashflow or new market penetration was the current key directive. But all has now changed.

2006 was a great year for the CPM vendors and most registered 30%+ revenue growth. Sniffing opportunity, supplier indecisiveness vapourised overnight. The answer to the "which market are you in?" question has been categorically answered: "BOTH".

All the BI vendors are now firmly positioning themselves in the PM market. Business Objects will shortly unveil ambitious PM plans based on their acquisitions of ALG and SRC. Cognos boasts an Innovation Centre that delivers industry sector CPM solutions in Cognos Performance Blueprints. It now talks openly of "Cognos BI/PM solutions". SAP (with SEM) and Oracle (touting both its own CPM suite and the ex-PeopleSoft EPM suite) are pushing new BI and CPM solutions as part of their 'enterprise solution stacks'. SAS is leveraging its analytics market leadership position into enterprise PM products. Microsoft will launch its PerformancePoint PM suite in 2007.

Paradoxically Hyperion is moving in the opposite direction. Having led the CPM market from its inception it is now reverting to its BI roots and will present 'Why Buy BI from a Performance Management Vendor' at the upcoming Gartner BI Summit.

So what's next for the BI/PM vendors? BI as a category will gradually disappear, as OLAP did before BI. "Content Intelligence" will become the new category and the next holy grail. Already SAS, IBM and Cognos are offering enterprise search for unstructured data - emails, Word, PDF documents and the like.

If the BI/PM vendors can combine their mastery of data intelligence (as in BI) with text intelligence (as in document management) to slice and dice, drill down, and aggregate data and text for any question a user might care to ask, then customers will really have something to rave about - a way of emulating the way we currently work with paper. The answers to "where did I put that file?", "what does this information and data mean for the business?" and "what is the context for these conclusions?" will become only a mouse click away. The adoption of SOA will make this easier. Structured and unstructured data management software tools will converge facilitated by SOA.

Expect more acquisitions and new competitors in the Content Intelligence space. HP's recent acquisition of BI/PM provider Knightsbridge is ominous, as is Google's emerging presence in the Corporates with its Google (enterprise) Search Appliance - British Airways is a reference customer.

But what of the pure-play BI and PM vendors? In PM the likes of CorVu and Pilot will provide specialist niche market solutions to government, healthcare, and other markets where specialist non-standard PM solutions are required. BI 2.0 will emerge, but in a slightly different form than most commentators are predicting. High growth vendors such as QlikTech, Spotfire, and Tableau offer fast, flexible, highly interactive and visual solutions for knowledge workers. BI 2.0 will be for the scientific, technical, and professional knowledge workers - the rest of us will access more basic BI functionality and reporting as part of enterprise-wide performance management systems.”

180 View – We disagree with the author that BI and CPM are becoming one. All organizations require BI but only the larger ones need CPM that includes consolidation, strategic planning, scorecarding and forecasting.

SAS Review

October 1, 2006 from CAmagazine and written by Michael Burns – “In the global market for corporate performance management and business intelligence software, SAS Institute Inc. is unquestionably a leader. With 10,000 employees, 4.5 million users and 40,000 customer sites in 110 countries, the company earned revenue of US$1.74 billion last year. Based in Cary, North Carolina, it has offices throughout the world, including Toronto. It also has the distinction of being the world's largest privately held software company.

In the past, SAS competed with companies like Hyperion and Cognos. Today, it also shares the market with some ERP vendors that are bundling CPM components with their systems. So why would anyone want to use multiple products if they could just use one integrated ERP solution?”

Business Intelligence Tools - Vendor Analysis

July 6, 2006 from IDC – “IDC defines the BI tools market as being composed of two market segments: query, reporting, and analysis (QRA) and advanced analytics. A further segmentation by software packaging divides the market into standalone and database-embedded BI tools:
1) Query, reporting, and analysis software includes ad hoc query and multidimensional analysis tools as well as dashboards and production reporting tools. Query and reporting tools are designed specifically to support ad hoc data access and report building by either IT or business users. This category does not include other application development tools that may be used for building reports but are not specifically designed for that purpose. Multidimensional analysis tools include both online analytical processing (OLAP) servers and client-side analysis tools that provide a data management environment used for modeling business problems and analyzing business data. Packaged data marts, which are preconfigured software combining data transformation, management, and access in a single package, usually with business models, are also included in this functional market.
2) Advanced analytics software includes data mining and statistical software (previously called technical data analysis). It uses technologies such as neural networks, rule induction, and clustering, among others, to discover relationships in data and make predictions that are hidden, not apparent, or too complex to be extracted using query, reporting, and multidimensional analysis software. This market also includes technical, econometric, and other mathematics-specific software that provides libraries of statistical algorithms and tests for analyzing data. Although statistics products vary in sophistication, most provide base-level functions such as frequencies, cross-tabulation, and chi square. This market also includes a specialized form of statistical software focused on functional areas such as the industrial design of experiments, clinical trial testing, exploratory data analysis, and high-volume and real-time statistical analysis…

In 2005, the BI market grew 11.5% to reach $5.7 billion in worldwide license and maintenance revenue. As Table 1 shows, the database-embedded BI server market experienced a higher growth rate (19.9%) than did standalone BI software (10.7%). The query, reporting, and analysis market outgrew the advanced analytics market in 2005. We had anticipated a higher growth rate for advanced analytics. One of the reasons for the lower-than-expected performance of this market segment was a larger-than-expected shift in revenue to query, reporting, and analysis tools as well as to packaged analytic applications by SAS, the largest advanced analytics tools vendor.

Business Objects
Business Objects ended 2005 again as the leading BI software vendor, with $795 million in BI tools revenue and a 14% market share. Business Objects is the dominant query, reporting, and analysis vendor, with a broad user base spanning all major geographic regions, company size segments, and industries. Building on this base, the company has ambitious goals for growth. This growth can either be organic or involve further acquisitions. Both paths will likely contribute to Business Objects' top line over the foreseeable future, with most of the organic growth coming from query, reporting, and analysis tools from both expanding the company's user base within enterprise accounts and deeper penetration of midsize organizations.

SAS Institute
SAS was the second-largest vendor in 2005, with $582 million in BI tools revenue and a 10.2% market share. Fifty-nine percent of SAS' BI tools revenue comes from advanced analytics software. However, in 2005 the company saw strong performance from its Enterprise BI Server product suite, which resulted in a 26% growth in its query, reporting, and analysis revenue (for more details see SAS Revamps Its BI Software and Finds Traction Outside Its Core Competency of Data Mining and Statistics, IDC #34846, February 2006). SAS is also continuing to find success in specialty analytic applications that take advantage of its advanced analytics tools. Examples include applications for various types of forecasting, optimization, and descriptive and predictive analytics. Although this revenue is not accounted for in the current BI tools study, it influences the company's overall product mix and in aggregate has a tempering effect on BI tools revenue.

In the short term, IDC does not see any serious challenge to SAS' dominance of the advanced analytics market and expects the company to continue to experience above-market growth rates for query, reporting, and analysis. However, at the same time there is likely going to be a long-term, continuous shift toward more packaged analytic applications.

Cognos
Cognos finished 2005 as the third-largest BI vendor, with $567 million in BI software revenue and a 9.9% market share. Like its longtime rival Business Objects, Cognos experienced competitive market pressures, which kept its query, reporting, and analysis revenue growth rate below that of the market. IDC speculates that the company's ReportNet product, which had tremendous growth when it was first introduced at the end of 2003, encountered tough competition from the many
reporting products in the market from specialty BI and database vendors. Although Cognos still derives a majority of its revenue from BI tools, the company experienced a higher growth rate in its business performance management applications than it did in BI tools. This trend is indicative of a steady shift toward a focus on analytic applications. As the market for BI tools matures, Cognos is likely to continue to expand on its strategy of both developing and acquiring packaged analytic applications in areas such as workforce analytics (released in 2006), supply chain analytics, customer analytics, and business performance management. This expected shift will put internal pressure on BI tools. However, these trends take years to play out; in the meantime, Cognos remains solidly one of the top BI tools software providers.

Microsoft
IDC estimates the value of Microsoft's BI tools at $353 million, which puts the company into fourth place with a 6.2% market share. Among its closest competitors, Microsoft is a relative newcomer to the BI tools market; the company introduced its OLAP server at the end of 1997. Nevertheless, Microsoft has seen strong growth over the past several years as it has expanded and enhanced its database-embedded BI features and combined them with related tools such as data integration. Specifically, the high growth rate in 2004 is attributed to the release of SQL Server Reporting Services.

More recently, Microsoft acquired ProClarity. (The acquisition closed in 2006; therefore, IDC has shown the two companies as separate entities in this 2005 market share study.) This acquisition filled an important gap in Microsoft's BI software portfolio. The company now has not only server-side BI engines for OLAP and data mining but also a Web-based (as well as thick-client) end-user query, reporting, and analysis tool.

Microsoft's impact on the BI tools market cannot be overemphasized. Currently this is especially true with respect to its Reporting Services and Analysis Services products. However, the company is also going to have an impact at the "front end" of BI in the coming years. Note that although Microsoft Excel is not counted as a purpose-built BI tool, Microsoft's recent focus on promoting Excel as a key interface for BI is also going to have a negative impact on competition. Again, this impact will not create any sudden material shifts in the market, but an evolutionary change has been put into motion by the database vendors, and it will reshape the BI tools market over the next 15 years…

The next wave of BI will reach out to these employees as well as other organizational stakeholders such as suppliers, partners, customers, and government agencies to improve information delivery and decision support functionality for all. This shift in market focus can be only partially addressed through existing BI software, which as already mentioned was created with the analyst or power user as the intended audience. Clearly a frontline employee will have limited use for an OLAP or an ad hoc query tool. In fact, to address the needs of frontline employees and line-of-business managers, organizations must redefine and expand what they mean by BI. The expanded vision of BI must take into account not only the technologies involved but also business drivers and performance management methodologies.

180 View – IDC provides analysis on many other BI vendors including Hyperion, Oracle, MicroStrategy, SAP, SPSS, Information Builders, IBM, Actuate, Lawson and QlikTech. The analysis also includes BI business drivers. If you’re into BI, you should check this article out.

The Top 10 Business Performance Management vendors

July 2006 from DM Review - "Any vendor-ranking list is going to end up being subjective, controversial and open to debate. However, the benefit to end users of having a core list outweighs the pain of the arrows that I am sure will come my way from those not included.

The business performance management (BPM) vendor marketplace has, by my count, approximately 90+ vendors, and it is continuing to grow. Recently, a number of vendors entered the market with a very narrow but deep focus on one aspect of BPM. This list is not about them. The Top 10 reflects those I see as the core, established vendors in the space.

The primary criteria for inclusion in the list are: 1) a fairly comprehensive offering, covering most if not all areas of BPM, 2) a focus on the BPM market (which leaves out the ERP vendors because BPM is just one small component of their offerings), 3) a significant track record of success in the field, 4) demonstrated company viability and growth, and 5) continued innovation. There was another criterion that I had in the back of my mind as well: is the vendor's marketing and sales pitch in line with the product's reality? There were some otherwise capable vendors who insisted they did a lot more than I could find in their actual products.

Now on to the list, which is in alphabetical order. The list of 10 is intended as a starting point for those considering BPM - nothing more, nothing less.

Applix: This vendor, building on its high-performance TM1 OLAP engine, has added a planning manager, a consolidation framework and a financial reporting solution to round out its BPM offering. At this point in time, Applix provides the necessary BI, budgeting, consolidation and dashboard tools to cover the core BPM bases. In addition, thanks in large part to their core engine, Applix is well positioned to address the burgeoning operational performance management area of BPM. Applix's highly satisfied clients often place it at the top of BPM satisfaction surveys. The categories that customers highlight as being most impressive are ease of implementation, ease of use and performance.

Business Objects: A strong vendor in the BI space for years, Business Objects' primary BPM capabilities were based on dashboards. While dashboards (and the scorecards they display) are a key component of BPM, this is not enough for a full BPM initiative. The wise souls at Business Objects realized this and acquired SRC, a small but successful budgeting and consolidation vendor. In addition, SRC filled out some vertical BPM offerings for financial services and health care. More recently, the combined company focused its vertical energies on the retail market. Its clients give it high marks for product quality. With its size and breadth of offering, Business Objects can be one of the leaders in the space.

Cartesis: Strong in Europe, particularly on its home turf of France, Cartesis' North American operations had lagged behind until recently, when the firm shuffled its North American management team and sales force. The result has been a significant uptick in number and size of U.S. deals. The core product was always strong in complex financial consolidation. Cartesis had some basic budgeting capabilities but greatly enhanced the offering with the acquisition of a company called INEA that focused on BPM for financial services companies. In addition, Cartesis picked up a consulting company that had developed strong capabilities around information delivery. The recent announcements about XBRL access to benchmark data and expanded vertical focus begin to differentiate Cartesis from some of the competition. The end result is a re-energized North American team, with a product set that addresses all the core BPM application modules.

Clarity Systems: While probably not as well known as some of the other vendors on this list, Clarity does have a fairly complete BPM suite and a satisfied client base. Clarity started life as a consulting company, and this background serves them well in a continued focus on meeting customer needs. Clarity's Web-enabled solutions make extensive use of Excel, which allows users to leverage existing models they have built. An open architecture supports multiple database choices. Within its applications, Clarity uses both relational and multidimensional data structures. The current product set addresses budgeting, consolidation and dashboards.

Cognos: This vendor is one that appears on almost everyone's BPM shortlist. There is good reason for this: they have a fairly complete offering and a highly satisfied customer base. In particular, their clients point to product functionality, quality and ease of use as areas where Cognos excels. Cognos enhanced its suite significantly in the past year with its strategic initiative and long-range planning blueprint models and the release of Cognos 8. This release provides a single BI solution with robust reporting and analysis integrated with Cognos' sophisticated planning, budgeting and consolidation solutions. The recent addition of their GO! Search service that finds relevant BI content as part of enterprise search results only serves to strengthen their offering.

Extensity: Formerly known as Geac, and Comshare before that, this vendor has a strong financial performance management product set. Recent enhancements to their strategic planning and modeling capabilities complement their leading planning, budgeting and consolidation solutions. The addition of smart consolidation capabilities focusing only on impacted data improves application performance response and analysis times. At press time, Extensity announced that it will acquire Systems Union. While this will add more BI capabilities to their offering and broaden their geographic reach, it also introduces significant product overlap and organization integration challenges. Take this into account when considering this vendor.

Hyperion: With a comprehensive and strong BPM offering, Hyperion is usually near the top of the list of vendors to be considered. Customers cite Hyperion's depth and breadth of product functionality as one of the things they like best. Hyperion has made major advances in the past year. With the release of System 9, the company now provides a unified front end to its deep portfolio of BPM tools and applications. In addition, the purchase of Razza Solutions has enhanced Hyperion's ability to synchronize metadata across multiple products. The introduction of its Workforce Planning module has streamlined the headcount and salary-planning process. The recently announced acquisition of Upstream Software enables Hyperion to focus on the movement and quality of financial data.

Longview Solutions: Longview's BPM solution includes comprehensive planning, budgeting, consolidation and reporting capabilities. Customers give their highest ratings to Longview's product functionality and price/value equation. This vendor expanded its software with the release of its Strategic Tax tool, which facilitates tax data collection, planning and compliance reporting. As one of the few truly unified solutions, Longview's robust product competes effectively with the biggest vendors in the BPM market.

OutlookSoft: This vendor has a lot going for it. They have fully integrated Excel (and other elements of Office) into their offering, reducing the learning curve and resulting in high ease-of-use ratings from their clients. In addition, they were the first to offer a truly unified, fully Web-based solution. More recently they introduced predictive analytics capabilities, which the BPM Pulse survey indicates is high on the list of next-generation capabilities BPM prospects are seeking. Since its introduction in 2000, the OutlookSoft product has been entirely and exclusively Microsoft based. They just announced full support for Oracle 10g, which now gives their clients and prospects a choice.

SAS: Well-known in the BI/data mining arena, SAS has been playing catch-up in the BPM space. It's not because of their product set. Their offerings touch all areas of BPM, including some specialized areas that not all vendors address, such as activity-based costing. They also offer deep verticalized solutions that are not just window dressing for the sales cycle; rather, they are industry-specific modules that supplement and expand their cross-industry BPM products. With all of this and a new marketing focus on performance management, I expect to see them show up in more and more BPM deals.

A number of other vendors just below the Top 10 are worth noting. KCI addresses financial and operational BPM with a focus on performance and scalability. ALG Software comes at BPM with an activity-based costing and profitability optimization approach. Hosted solutions are starting to gain traction in the space, and both Host Analytics and Adaptive Planning offer components of performance management delivered as a service. For the mid-market, FRx and Prophix offer robust solutions at a reasonable cost, and Satori Group provides both BPM applications and tools with a vertical focus.

Clearly, there are many good solutions to choose from. The key is picking the right one for your organization. In the end, that comes down to having a razor-sharp focus on your requirements and evaluating how each vendor stacks up when it comes to your specific needs. Investing in a comprehensive due diligence process up front will provide significant payback down the road.

180 View - Business Process Management (BPM) is also called Corporate Performance Management (CPM) and Enterprise Performance Management (EPM). We prefer the CPM acronym. For our article published in June 2006 on CPM, click here.

2006 Business Intelligence / Corporate Performance Management Survey

June 2006 from CAmagazine written by Michael Burns - "Our Business Intelligence survey has morphed into a Corporate Performance Management (CPM) survey. Business Intelligence is but one component of CPM. Our attached survey includes the leading Business Intelligence and CPM vendors. You will find analysis for Cognos, DynacTools, Hyperion, Khalix, Microsoft Office Business Scorecard Manager, OutlookSoft, Panorama, PROPHIX, SAS, TARGIT and Vanguard. Check it out by clicking here.

ProClarity: If You Can't Beat 'Em, Buy 'Em

April 13, 2006 from SQL Server Magazine - "Microsoft dramatically shook up the business intelligence (BI) market competitive landscape last week with the acquisition of ProClarity, one of the leading developers of third-party analysis and visualization tools for the Microsoft BI platform. The Microsoft press release emphasizes the compatibility of the two companies' visions. The release features a statement from Bill Baker, general manager of Microsoft Office Business Applications, who says the ProClarity acquisition will help Microsoft "build even more BI capabilities into the Microsoft Office system productivity tools people use every day." And ProClarity CEO Bob Lokken says his company shares "Microsoft's enthusiasm for making BI accessible to all decision maker's within an organization."

Although I haven't reviewed ProClarity's latest market-share data, I know that the company was one of the first third-party providers of tools for the Microsoft BI space and is widely regarded as one of the best BI providers in the market. Microsoft regularly buys small software companies to roll into its own product suites, but it's rare for Microsoft to acquire such a visible, leading player. I've been following the SQL Server space since the product's beginnings (when SQL Server ran on LAN Manager and OS/2), and I can't recall Microsoft ever acquiring a product that has such a significant market share in a mature market segment--at least in the SQL Server space. (I'm sure someone will quickly point out some major event I've missed, and I'll be glad to pass that info along next week!)

I worked with the first release of the ProClarity platform and attended one of the company's earliest partner-training events in the days of SQL Server 7.0. I remember joking with CEO Bob Lokken, "So, when is Microsoft going to buy you?" From the start, ProClarity's offering was strong, especially when compared to the weak Microsoft offerings of the time, which relied on Microsoft Office as a BI front end. In addition, the ProClarity platform did a great job of leveraging Microsoft technology.

The move to acquire the mature ProClarity product raises some interesting questions:

Will Microsoft integrate ProClarity into existing Microsoft tool offerings (i.e., Office), or will ProClarity become a standalone, high-end product? What does this acquisition mean for other third-party BI tool providers? Which companies will be able to compete, and which small tool companies may go out of business?

Microsoft hasn't revealed whether ProClarity's platform will be integrated into the Microsoft BI stack or be consumed by the upcoming Office 2007. But ProClarity Analytics is a best-of-breed product, and Microsoft has made great BI-related strides in the upcoming Office release. So tool choices for Microsoft customers are bound to be varied and rich.

I'm not sure I'd want to be a standalone-tool competitor in the Microsoft BI space. Competition in this arena will be tough given the massive upcoming BI improvements in Office 2007 and the acquisition of ProClarity. I'm sure BI competitors such as Cognos and Business Objects are also keenly interested in this acquisition. Microsoft BI has made enormous strides over the years, and the company has become recognized as a leading player in the BI space. The ProClarity acquisition can only make Microsoft an even stronger player." For the article, click here.

Performance Management Spending Nears $23B in 2006

2006 from AMR research - "Enterprise performance management (EPM) spending remains strong in 2006, with nearly $23B planned for software, hardware, labor (internal and external), and integration services. This is according to the results of a detailed survey AMR Research conducted of more than 200 companies across all industry sectors within North America... The following are some trends we uncovered:

• Not surprisingly, the dashboard and scorecard segment is on fire—a reflection of the number of inquiries we get from customers about these subjects.
• BI is also on an upswing, but camps are forming around three types of providers—best of breed, platform vendors, and enterprise application providers. Generally speaking, manufacturers are more strongly aligned with their enterprise application vendors and services firms are more in synch with best-of-breed competitors. Both segments have healthy platform supporters as well. We expect a more competitive market for these software firms in 2006.
• Although planning, budgeting, and forecasting products show a slight decline in spending, they are deemed the most strategically important EPM investment in 2006, slightly exceeding the importance of BI. Interestingly, manufacturers mentioned these products much more frequently than services firms. More than half of the firms surveyed indicated they have an operational system in place.
• The large decrease in analytic applications and slight decrease in analytic infrastructure are not easily explainable. In fact, it makes us scratch our heads and wonder why since inquiries from customers are veering more into these areas. The biggest impediments companies have in deploying performance management are access to enterprise-wide data and data from customers and suppliers outside the four walls of the firm." For the article, click here.
  

180 View - Some people call it Enterprise Performance Management (EPM). Others call it Corporate Performance Management (CPM) or Business Performance Management (BPM). It would be a lot less confusing if the vendors could agree on the buzzword. We think the decrease in analytic applications has more to do with confusion as to what it means. In our opinion there is no difference between analytics and business intelligence. However, if you speak with the vendors or do research, you will find differences, which are often difficult to understand. In our research we found this quote related to an article on the difference between analytics and business intelligence:

"This article makes a distinction where there should be none. Business intelligence is about delivering "intelligence" to the "business" and it takes many forms, from querying and reporting to OLAP and data mining. The only people who want or need to make these types of distinctions are vendors who need to carve out a market niche by confusing people with new terms for existing processes and technologies." Wayne Eckerson, Director of Research and Services, TDW

For the article and this quote, click here.

Mining for Gold

From FastCompany and written by Evan Goldberg, founder, chief technology officer and chairman of the board of NetSuite - "Whether you know it or not you're managing a lot of databases in your business. Tons of mission-critical information resides in a huge variety of applications on your company's computers. From the customer list in the accounting system to the email in people's inboxes, these bits of information are nuggets of gold if they can make it to the right person at the right time. Through a process called "data mining," you can actually look at historical information and use it to make better business decisions. But data locked in silos can be difficult or impossible to mine. Let me give you an example.

Customer Joe emails his salesperson, irate that the shipment he ordered has not arrived. The salesperson has no access to the shipping system and must offer to call back when he digs up the information. He calls the shipping department, they figure out where the shipment is, and he emails Joe back, reassuring him that the delivery will arrive tomorrow.

There are two things wrong with this scenario. The first is a practical problem: Sales couldn't help Joe right away because the information about the shipment was locked up in an inaccessible system. The second is what blocks any chance of data mining: The fact that Joe complained at all is information that is now locked up in the salesperson's email account, doubtless headed for the delete folder.

Wouldn't it be better if Joe had been able to access the shipping information himself, reassure the customer in the first call, and then log the fact that Joe had a complaint about shipping so that anyone dealing with this customer in the future can be aware of the history? And here's the kicker: Later, the customer-service department can track how many complaints were about shipping and identify if there is a more global problem to be solved. They can even correlate shipping complaints with likelihood of repurchase to put a dollar amount on the problem and help give an ROI on fixing it.

New tools are emerging to make it much easier for smaller companies to mine the data in their systems, like larger organizations have been doing for years. Doing so can provide a long term competitive advantage over organizations that make their decisions based on little or no historical data.

The most important infrastructure to get in place to allow data mining is, of course, databases. A customer relationship management application for your sales people and service people will capture information that otherwise ends up getting lost in sticky notes or emails. Many questions can be answered just by running reports in these applications, and with today's Web-based versions of CRM the applications can be easy to get up and running without being hard on the budget.

The next step will be answering more global questions about the business like the ones I have alluded to above. How does activity in one department affect the bottom line? To answer these questions will typically involve information from multiple business applications, such as the CRM system and the accounting system. There are a few approaches to solving this dilemma.

The first is to synchronize the data between the systems. This can be challenging and the technical expertise required generally beyond what small organizations have access to. But if the application vendors themselves have developed tools to synchronize the information in their databases, such as allowing purchase history to be stored in the sales system, this may be an option.

The second approach is to develop what is called a "data warehouse". This is an external database that combines information from multiple "operational" databases such as the CRM system and the accounting system. Technically savvy users in your organization may be able to do home-grown versions of this approach that work fine for you -- even if it means the data is just summary data in a big spreadsheet. More advanced data warehouses can require third-party tools and consulting and can get expensive.

Finally you can choose business applications that actually offer cross-departmental functionality and are "pre-integrated"; you can therefore do your data mining straight from the operational system. Some sales force automation tools also offer customer support functionality. Totally integrated systems cover everything from accounting to your web site activity to sales and service.

Whatever approach you choose, there's gold in them thar hills. A better understanding of who your customers are, how and when they purchase, and how your interactions with them affect future activity is another contribution IT systems can make to the bottom line."

180 View - Evan Goldberg has put his money where his mouth is and developed a "pre-integrated" system. The article makes sense and is a subtle and effective way to promote NetSuite. For the article, click here.

BPM Viewpoint: Suite Vs. Stand-Alone: The Latest Debate

March 2006 from Business Finance - "Business performance management (BPM) was the little kid on the finance-application block when it emerged as a category of software a few years ago. Stand-alone BPM packages sit on top of mammoth enterprise resource planning (ERP) suites, giving companies budgeting, reporting and analytics capabilities that fit their needs. In Business Finance articles on the debate about suite vs. best-of-breed, there was never any doubt where BPM software from non-ERP vendors fell.

But times are changing, and the scrawny kid is bulking up. BPM systems will never challenge ERP as transactional repositories, but they are becoming bigger and more complex every year. And the "stand-alone vs. suite" discussion is beginning to surface within BPM-specific software purchase decisions. Several major players in the BPM software space completed recent acquisitions in a push to offer a broader spectrum of BPM functionality. Then late last year, they announced that they had integrated those disparate systems into comprehensive product suites.

The appeal of the suites is easy to understand. Without one, a complex company with lots of operational data coming from a wide range of source systems has to assemble a variety of software packages to cover budgeting, forecasting, consolidations, management reporting and financial analytics. In the process, the organization struggles to ensure that the applications always use the same up-to-date version of all data. The total cost of this undertaking can quickly skyrocket because of the effort required to maintain a myriad of different data connections.

But, warn many consultants, BPM buyers looking for consolidated data management and ease of integration from product bundles sold as suites need to do their homework. The promise of tight connectivity may be hollow. Some software packaged as a "suite" is tied together more at a marketing level than in the source code. The user interface may look the same across products -- which can be a plus for training requirements -- but under the covers, applications that share a name and front end may still be radically different.

The other big risk in purchasing a suite is that buyers may not obtain as much functionality from each of its components as they would get if they bought the planning, reporting and analytics pieces separately. This is especially likely for organizations in industries for which distinct vertical solutions are available. These companies may find that the extra expenditure of resources required to keep multiple unique applications from multiple vendors running in unison would be more than offset by the savings they can reap by buying an application that closely meets their requirements. They would need to customize software either way, but when they make their purchase decision, they should weigh the cost and value of each option.

Of course, determining how much customization a product will need and how much effort will be required to connect data analysis packages with data source systems is a daunting challenge. Purchasers should find out all the requirements for linking products into a smooth operation. Many a BPM project has been put on hold or canceled because the purchaser expected implementation to be far cheaper and quicker. But buyer beware: Routine vendor demos and high-level discussions with salespeople don't provide enough information. Help is available from other sources, including independent consultants with considerable BPM experience. And the due diligence process for a software purchase always should involve in-depth meetings with companies that already use products on the organization's shortlist.

This doesn't mean a BPM initiative isn't worth the effort. I regularly talk to organizations that have deployed performance management software, and many say they can't imagine managing a business without their new tool. It just means that the bigger and more complicated these systems become, the closer the correlation between the thoroughness of the due diligence process and buyers' satisfaction with their purchase." For the article, click here.

Microsoft unveils mid-market BI software

March 16, 2006 from InfoWorld - "Microsoft unveiled new business intelligence (BI) software Wednesday that was designed to let mid-market companies use analytics and scorecards to study business data through various organizational roles. BIO (Business Intelligence Optimization) for Microsoft Dynamics SL, slated for release to manufacturing in May, allows business users to build, manage and use scorecards and reports, according to Microsoft officials. Users can then view the analytical reports with Microsoft tools such as Excel, Office SharePoint Services, and other Office products or directly within the BIO application.

Microsoft developed the new BI software with channel partner NexVue Analytics. BIO is built on SQL Server Analysis Services and integrates with SQL Server 2000 and 2005, Microsoft said. The software is scheduled for general availability in June. Pricing for the BIO Foundation, an entry-level option, starts at $3,600 and includes financial analytics and a two-user license. Additional users and project, distribution, and field service analytics solutions can be licensed for additional fees." For the article, click here.

180 View - You will find many examples of ERP vendoprs acquiring or developing BI solutions. Sage began selling its version of the eAnalytics Portal authored by Dynamic Software Systems International. Late in 2005, Exact Software acquired Vanguard Business Systems, which makes a BI product. Systems Union acquired F9 and MIS AG a few years ago... ERP systems generate lots of data but without BI it's not easy to get useful information to make decisions.

The Effect of the BI Application on Business Performance

March 1, 2006 from DM Review - "Over the last couple of years, most of the business intelligence (BI) vendors have relabeled their products as performance management solutions. Their definitions of performance management have varied, depending on what products they happen to include in their suites, but they usually fail to demonstrate exactly how their products have helped the business performance of their customers. Even if they tried, it would be very difficult for them to show how the particular features of their products generated superior business performance compared to competitive products...

The latest OLAP Survey had an even larger sample than the four previous editions: data from 2,100 participants in 95 countries was used to analyze dozens of aspects of the purchase and use of more than two dozen OLAP products. In total, 5,551 people responded, but some were not yet users, others were vendors using their own products and some were unable to answer questions. This is by far the largest independent survey of BI users ever carried out.

How Do You Measure Business Performance?
Because of the wide range of products included, The OLAP Surveys don't compare features of products - how could you compare the features of Hyperion Essbase and Oracle Discoverer? Instead, since the second edition of The OLAP Surveys in 2002, we've used a benefits-based benchmark. After all, why would you buy any BI product if you weren't hoping to gain business benefit?

We came up with a basket of eight possible business benefits. They cover various areas, focusing on aspects such as reduced costs, increased revenues, improved customer satisfaction and greater internal efficiency. We also allowed respondents to add a ninth if they thought it relevant. Few did, and because no consistent ninth benefit has emerged, we continue to use the same standard list of eight benefits:

• Saved headcount in IT,
• Saved headcount in business departments,
• Reduced external IT costs (hardware, support, consulting or software licensing),
• Saved other non-IT costs (e.g., inventory, waste, financing),
• Faster or more accurate reporting,
• Increased revenues through better sales and marketing analysis,
• Improved customer satisfaction through enhanced product quality and/or service levels, and
• Better business decisions through more thorough or timely analysis...

The OLAP Survey uses the business benefit index to measure the effect of numerous factors, including:

• Product choice,
• Methods of product selection,
• Architecture (MOLAP versus ROLAP),
• Input data volumes,
• Server platform,
• License fees paid,
• External consulting costs,
• Type of lead implementer,
• The extent of Web deployment,
• Deployment time,
• Data load/aggregation time, and
• Query performance.

Of all the aspects evaluated, query time turned out to have the biggest impact on the business benefits achieved. Others, such as data volumes and server platform, had remarkably little impact on the BBI. This year, even product choice had little impact, though it was higher than in previous years. For the rest of the article, click here.

180 View - The author has focused his attention on Online Analytical Processing (OLAP), which is but one component of corporate performance management systems. The other components - strategic planning, scorecarding, budgeting and forecasting, and consolidation - would have a much bigger impact.

'Analytics' buzzword needs careful definition

February 7, 2006 from InfoWorld - "One of the buzzwords around BI (business intelligence) software -- analytics -- has been through the linguistic grinder, with vendors and customers using it to describe very different functions. The term can cause confusion for enterprises, especially as they consider BI products from vendors who use analytics to mean different things, said Andreas Bitterer, a Gartner research vice president, in a presentation Tuesday at the company's BI conference in London.

"It's fairly interesting who is actually positioning themselves as a vendor who can provide the ability to do analytics," Bitterer said. "And again, whatever they mean by that is still fairly unclear. If you believe some of the marketing and PR ... it is just fluff." When Gartner conducted an informal survey among users about what the term means, the answers ranged from online analytical processing (OLAP) to monitoring call centers to reporting and data mining, Bitterer said.

The responses "were completely all over the place," he said, adding that Gartner had more questions than answers after the survey. Gartner has created its own definition: "Analytics leverage data in a particular functional process (or application) to enable context-specific insight that is actionable." It can be used in many industries in real-time data processing situations to allow for faster business decisions, he said.

Analytics is different from BI, although BI products play a role in analytics. SAP, Oracle and Microsoft have no apparent definition of analytics, although they toss the word around frequently, Bitterer said. For customers trying to define how the various definitions align, "just grill them on that, because it's kind of meaningless if they sit on a term," he said.

Despite the ambiguities, those vendors, along with Siebel Systems, appear to be the most best suited for providing analytics capabilities, Bitterer said." For the article, click here.

180 View - Technology analysts sometimes create confusion which in turn makes their insights apparently more useful. From our perspective, Gartner is splitting hairs when it comes to distinguishing between BI and Analytics. It's the same thing.

Bigger BI Budgets Are CIOs' Priority for '06

February 8, 2006 from destimationCRM - "CIOs rank BI as their number one tech priority for 2006 and plan to increase their BI budgets by an average of 4.8 percent, according to Gartner's "2006 CIO Survey." "Companies have purchased almost $40 billion worth of enterprise applications, including ERP, CRM, and HR, during the past few years," says Kurt Schlegel, research director at Gartner. "This has generated significant volumes of data in support of the operational processes they automate. BI is designed to leverage this data in support of their enterprise application investments."

The market is estimated to reach $2.5 billion in 2006, a 6 percent increase over 2005. Overall, Gartner expects the BI market to grow at a solid pace during the next five years, with new license revenues experiencing a compound annual growth rate (CAGR) of 7.3 percent. In addition, larger organizations are increasing BI spending, especially as they work to comply with government regulations like the Sarbanes-Oxley Act.

The increasing scope of BI platforms to include more users and access more data sources also will spur market growth, according to the report. Traditionally, BI was used by senior executives and analysts, but many companies are now extending BI capabilities throughout the organization to other employees. BI platforms increasingly will rely on data from a broader array of applications and data sources, as opposed to solely databases.

Schlegel cautions that significant inhibitors remain, however, to the successful deployment and adoption of BI. Limited BI skills, a general perception that BI applications have a high cost of ownership, and difficulty in "quantifying the direct business benefits of better performance and improved decision making" will continue to hamper adoption, the report states.

Companies must develop the end-user skills to clear these hurdles, leveraging BI applications and changing the way information architecture and app portfolios are implemented and managed. "One of the keys for BI will be when companies move beyond looking at BI as just a data-mining tool and incorporate BI into the organization's strategic IT planning, " Schlegel says." For the article, click here.

180 View - Most organizations suffer the problem of being data rich and information poor. We define BI to mean turning data into information useful to make decisions. There is a spectrum of BI solutions from a simple report to Online Analytical Processing (OLAP). The vendors of applications such as ERP and CRM are incorporating BI into their systems. There are also many third party products available. And Microsoft has has embedded BI into their database, and will even include BI tools in the next version of Office. The problem won't be lack of tools, but lack of what to analyze and what to do with all the information.

Office Live to come with BI bite

January 31, 2006 from Computer Business News - "As details of Microsoft Corp's Office Live beta program start to trickle out of the Redmond, Washington software giant, some industry observers are asking whether this product will hurt the established business intelligence vendors like Business Objects SA, Cognos Inc and Hyperion Solutions Corp...

But established BI vendors aren't that concerned, saying that its an interesting development but not the same market they play in. For instance the web analytics promised in Live Office live are at best rudimentary compared to fully fledged solutions in the market. "You can't compare apples to mini-tangerines," one BI company spokesman said." For the rest of the article, click here.

180 View - When Microsoft enters any market, they do so with the intent to dominate. Microsoft will at the very least make BI more affordable and will probably make it a standard technology for small and mid sized organizations.

Analyze This

From CIO Magazine - "In some organizations, analytics are in first place. They’re actually becoming the primary driver of strategy and competitive advantage. Analytics and quantitative decisions are being used to optimize business processes—to identify the best customers, select the ideal price, calculate the best supply chain routing or pick the best person to hire. Some companies, organizations and sports teams are clearly competing on analytics...

Buy-In from the Boss - The key factor in successfully competing on analytics in our study was a strong pull from senior executives. Analytical resources such as business intelligence software won’t change anything within an organization unless executives insist that analytics drive business strategy. Decision making based on data, facts and complex statistics doesn’t just evolve. It requires substantial changes in culture and behavior that must be driven from the top...

The Right Talent Makes a Difference - Supplying the right kind of hardware environment and analytical software is typically easier to address than creating demand, but just as important. While good data from transactional systems is increasingly available and analytical technology has become easier to use, companies that compete on analytics still require people with substantial quantitative
skills—either in-house or contracted from outside." For the rest of the article, click here.

The author, Tom Davenport, of this article "is a professor and director of research at Babson College. He is conducting an ongoing research study to explore the evolution of business intelligence in organizations. The study, titled “Competing on Analytics,” is based on discussions with senior executives from more than 30 industry — leading organizations that are successful — both in terms of their overall performance and in their use of business analytics. This research study was carried out independently through the Babson Working Knowledge Research Center, but was sponsored by SAS and Intel."

Market Analysis: Business Intelligence

October 7, 2005 from Network Computing - "Companies also want a standardized platform from which to analyze their business data, and they want this platform to work across the organization, not just at the departmental level. This single view of the enterprise is crucial for letting business users stay on top of trends and make decisions in real time using up-to-date data, and IT pros know it. CIOs surveyed by Gartner identified BI as their No. 2 technology priority this year, up from No. 10 in 2004. Not surprisingly, the market for BI reporting and analysis tools is on the rise. Forrester Research predicts it will reach $7.3 billion by 2008, up from $5.5 billion last year." For the rest of the article, click here.

BI (Business Intelligence) and the SMB (Small and Mid Sized Business)

September 20, 2005 from ITBusiness.ca - We were asked to answer this questions for the readers of SMB Extra "What does business intelligence mean to an SMB, and how do I take advantage of it to work smarter?" Our answer - "This question cannot be answered without a definition of business intelligence (BI), which simply means turning your data into information that is useful to make decisions.

SMBs, just like larger companies, need BI. Most organizations don't get the information they want from their existing computer systems without going through hoops, and these hoops are usually Excel spreadsheets. Spreadsheets are inefficient and unreliable; errors can creep in anytime through re-keying or calculation mistakes. There is no audit trail on changes, so errors may go undetected. To make matters worse, spreadsheets are not updated as things change in the real world, so decisions are sometimes made based on old data." For the rest of our answer, click here.

BI research

July 11, 2005 from InfoWorld - Based on research from IDG Research "It’s not surprising that nearly two-thirds of respondents rated BI as a high-to-critical priority during the next few years. Most BI packages are implemented for internal use, of course, but some 60 percent of companies make their BI data available to customers, too — about one-third to suppliers and nearly one-quarter to government regulators.

As for which features are used most widely, the ability to drill down into information topped the list, with 78 percent of respondents rating it as highly important. Sorting and filtering, a consistent GUI, and the ability to visualize data also ranked highly.

Companies seem particularly enamored with BI’s predictive analytic capability. This feature is used predominantly by the financial folks (with a 64 percent response rate among firms) but is also used by sales (53 percent), marketing (50 percent), and customer service (40 percent), among others.

When asked to identify the needs that have driven them to use or consider BI, 47 percent cite the desire to achieve better quality of data. But other technological challenges loom as well. For example, 39 percent want to integrate BI software with their existing infrastructure, and 32 percent need it for security and user rights management.

The main factor holding back the growth of BI is a familiar one: money. Some 49 percent of respondents say budget constraints limit their ability to roll out BI; another 40 percent worry about the time required to implement a BI project. On the matter of user interface, whereas some respondents like graphical dashboards, more than a third said the UI of their current BI solution is not appropriate for all potential users, and slightly more than half expressed support for a UI that resembles a simple search engine. Click here for the article.

Second annual survey of business intelligence systems

June 2005 from CAmagazine and written by Michael Burns - "Most organizations don’t get the information they want from their existing systems. Some get their IT department to write a report, which usually takes too long. Others create spreadsheets that let users do exactly what they want. But errors can slip into spreadsheets through rekeying or calculation mistakes. To make matters worse, spreadsheets are not usually shared across an organization and they are not updated as things change. So decisions are made with old data.

That’s where BI tools come in. They are supposed to take the mechanics out of the process. Analysts don’t need to fiddle with the spreadsheet or wait for the IT department. With BI, analysts can slice and dice data any way they want. Since the BI information is all stored on a central server rather than on one user’s desktop, BI tools should also provide just one version of the truth.

Our survey includes responses from many of the leading BI systems – including Microsoft, Cognos, Hyperion, Panorama, Clarity, SunSystems, Applix and Actuate. We asked a variety of questions about their cost, user base, target market and technology, as well as more than 80 questions related to BI functionality. For the article, click here.

Microsoft to compete with Cognos, Hyperion, Business Objects...

May 9, 2005 from ZDNet News - "Microsoft expects to deliver a test version of the new product in September, Lewis Levin, Microsoft's vice president of Office Business Applications, told a group of reporters. He said that a select group of users is now testing the product, which is code-named Maestro. "It's part of a broadening set of investments we're making in business intelligence," Levin said of the product.

The Maestro project comes out of Microsoft's previous foray into the business-intelligence software market with a couple of free products: Reporting Services for SQL Server and Business Scorecard Accelerator. The company plans to charge a license fee for Maestro, but executives were not ready to discuss prices on Monday.

Microsoft views business-intelligence software as a $3 billion to $4 billion a year market, Levin said. Maestro is aimed directly at the top companies in that field, including Business Objects, Cognos and Hyperion, he added. They each make programs that deliver reports and alerts to business managers, indicating how a company is tracking with sales and profit targets and other performance goals, such as returns, warrantee claims and discounting levels."

Microsoft used to be a platform company and owes much of its success to companies like Cognos that develop and use Microsoft technologies such as Microsoft SQL Server, which means that Cognos customers need to invest in Microsoft too. Same goes for ERP vendors that bring in additional revenues to Microsoft platform products. The ERP vendors are also competing with Microsoft Business Solutions - Great Plains, Navision, Solomon and Axapta. Click here for the article.

Business intelligence for the masses

March 31 , 2005 from TheStreet.com - "Microsoft's foray into the BI (business intelligence) market is not new, however, we expect that Microsoft is likely to become an increasingly formidable competitor in BI, particularly with small and medium-size business customers," wrote Goldman analyst Rick Sherlund in a note to clients...

Microsoft dropped the other shoe on Wednesday with an hour-long call with analysts to tout improvements to its business intelligence platform that will debut in the second half of the year as part of SQL Server 2005, Microsoft's new database offering. Many of the enhancements are fairly technical, but the overriding theme was summed up by Bill Baker, general manager of the SQL Server product group in a few words: "Business intelligence for the masses."

Although that may sound rather trite, it is, in fact, the heart of the issue. As corporate data proliferate, businesses need to extract every bit of value from it without the expense and delay of having the IT department write custom programs for every request. And that's where business intelligence software comes in. Under ideal conditions, BI applications allow employees to write a query and print a report from their own desk...

Still, the most positive recent news for the BI companies is what appears to be a coming spike in demand. A survey by Goldman Sachs found that 59% of IT executives polled during a recent survey said they were planning to buy BI tools in the next 12 months -- and 61% of them plan to buy the software from a pure-play BI vendor. Click here for the article.

Gartner Identifies the 'Fatal Flaws' of Business Intelligence and Advises Organisations on How to Avoid Them

February 3 , 2005 from BetterManagement.com - "Presenting at Gartner Inc.'s Business Intelligence Summit in London this week, analysts warned that although Business Intelligence (BI) offers great business opportunities, most enterprises are still failing to use it strategically. Gartner's leading BI analysts identified the most common pitfalls of BI implementations and advised an audience of more than 750 attendees how they might be avoided.

A Gartner survey of 1300 CIOs in more than 30 countries around the world has revealed that CIOs plan to increase spending on BI by an average of 6 percent this year. As companies move away from cost cutting initiatives, CIOs believe that the strategic use of business intelligence, combined with a focus on improving business processes, will be most significant in delivering IT's contribution to business growth in 2005 through 2008.

"If you ask organisations what they want to use BI for, better decision-making is the top answer," said Frank Buytendijk, Research Vice President at Gartner. "But most organisations are not making better decisions now than they did five years ago. The pressure from cost cutting and compliance has put a greater focus on BI, but businesses are still using it very tactically. Successful organisations realise that having a real vision for BI is the key to business performance and they use information as a resource implemented in their business culture."

Gartner's leading BI analysts highlighted seven major flaws inherent in BI and outlined Gartner's best practice for avoiding them.

Flaw 1 — "If we build it, they will come"
Gartner's Research Director Bill Hostmann pointed out that data is fundamental to BI, but how the data warehouse is set up and run is also critical. Data warehouses are often created by the IT organisation with little or no business involvement. Consequently, users within the organisation often perceive them to be of low value. "Too many IT departments build a data warehouse based on the assumption that once it is built, users will automatically see the benefit," he said. "BI applications require a clear and intimate understanding of the business itself and it is only by working on business and IT issues in tandem that the real value of BI is realised."

Flaw 2 — "Managers need to negotiate the numbers"
According to Mr Buytendijk, too many people hide behind spreadsheets because they are used to them and because they know how to manipulate the numbers to satisfy the politics of their organisations. He advised enterprises to use the pressure of compliance to achieve greater things, such as cleaning up the many data silos, creating more ownership around performance data and eliminating many of the thousands of spreadsheets."

Click here for the article and the rest of the flaws.

A Big Myth about BI Needs

January 6, 2005 from DM Review - "When presenting today's "standard" BI package - which is often comprised of dashboards, OLAP analyses, ad hoc querying and report generators - the classical "BI pyramid" still tends to be very much used by the BI solution providers. The BI pyramid shows how to distribute the different BI tools between different user groups.

According to the BI pyramid, which has now been around basically since BI became a hot topic some 10 years ago, senior management wants a global overview of their business. This is best presented in what used to be called executive information systems (EIS) but has now evolved into so-called dashboards.

Middle management, however, needs more distributed yet detailed data, and they should, therefore, get the pleasure to work directly with OLAP for analyses and ad hoc query tools for flexible reporting. The people on the operational level, finally, will do best with standardized, detailed, preformatted reports provided by an automatic report engine."

The author goes on to say that that everyone in the organization is interested in the information that is available from each of the tools. It is true that senior management will want to drill down for more detail when necessary. But personally, I think the pyramid still makes sense especially when you consider the costs of equal access to information.

The article is available by clicking here.

Business Performance Management Software Buyers Guide

January 2005 from businessfinancemag.com - BPM Partners lists BPM vendors in different categories - Tools, Applications and ERP vendors. The reason for breaking it out this way is that BPM (Business Performance Management) includes a number of elements including tools (OLAP, Report & Query and ETL). OLAP (OnLine Analytical Processing) involves building cubes for subsequent slicing and dicing. ETL (Extract, Transform and Load) involves getting the data for subsequent analysis. The tools are available from some companies that only specialize in these BPM tools. However, BPM tools can also be obtained from BPM vendors that also provide the applications - Analytics, Budgeting, Consolidation, and Metrics Portal/Dashboard. As well, some ERP vendors also provide BPM tools and BPM applications. The guide shows which vendors provide which tools and applications as well as some commentary. It's a good 1st step to investigating BPM and can be accessed by clicking here.

Getting a Grip on Performance

November 15, 2004 from CFO IT - "While software currently labeled BPM (or CPM, for corporate-performance management, with a few other variations used by some vendors) has been marketed to finance departments for several years, John Schoenherr, vice president of analytic solutions at Oracle Corp., points out that "if you strip away the name and look at the promise of the software, it's been around for 25 years." In the 1980s, "executive information" and "decision support" systems tried to do what BPM now promises: link a range of key strategic and financial information together with operational data and present it in a summarized way that aids decision-making...

At BPM's core are consolidation, planning and budgeting applications, a common database, and, often, the ability to display the data via a scorecard or dashboard interface. Vendors tout the closed-loop nature of BPM: the same data flows through applications used for budgeting, planning, forecasting, and operations, so as business results change, budgets and forecasts can change in response. In a sense, BPM is to performance data what ERP is to transactional data: a broad embrace of all relevant information, fully integrated and thus providing a single view tailored, in this case, to the needs of finance and operations executives...

BPM currently ranks among the fastest-growing enterprise software markets, with sales increasing about 15 percent in 2003 to about $1.1 billion, says John Van Decker, senior vice president at Meta Group. He and other analysts expect that rate of growth to continue for several years, especially as organizations continue to look to BPM to meet compliance/governance requirements, currently one of the biggest drivers...

Another factor propelling BPM comes courtesy of a new tier of software companies that now offer products for $50,000 to $150,000 versus the $250,000-plus range that was typical until recently...

Offered by companies including Applix, ALG, CorVu, Host Analytics, Kalido, Longview, OutlookSoft, Pilot, and SRC, these newer products tend to be Web-based, integrated suites of (at minimum) budgeting, planning, and consolidation components, and often include visualization capabilities such as dashboards. Many take advantage of new analytics capabilities in the Microsoft operating system they rely on.

These newer players must battle with the giants of BPM — including Hyperion, Cognos, Geac, SAS Institute, Cartesis, and, depending on how you define the market, a few other vendors — and ERP players such as SAP and Oracle, which have made strong commitments to adding BPM functionality. The price tags for BPM software from the more established companies are typically $250,000 to $350,000, plus implementation costs that may double that initial expense. But the products are generally regarded as more sophisticated and proven."

Click here for the article.

Performance Management: Integrating a Suite of Proven Methodologies

November 5, 2004 from DM Direct- "Performance management (PM)1 is translating plans into results - execution. It is the process of managing your strategy. Strategy is of paramount importance and is senior management's number one responsibility. For commercial companies, strategy can be reduced to three major choices.

1. What products or service lines should we offer or not offer?
2. What markets should we serve or not serve?
3. How are we going to win?

Although PM provides insights to improve all three choices, its power is in achieving number three - winning - by adjusting and executing strategies. PM does this by aiding managers to sense earlier and respond more quickly to uncertain changes. It does this by driving accountability for executing the organization's strategy to the lowest possible organization levels. In contrast to the popular 1990s business process reengineering (BPR) approaches, where after radical redesign every single step and task were explicitly mapped, PM relies on the power of focusing on the pertinent and relevant. After determining the strategic objectives and the supporting projects, measures, and appropriate (not old-style) budgets to achieve these strategic objectives, the rest will naturally follow. That is, the work activities align to pursue strategy, often intensely customer-focused, as job number one"

The author stresses that "Employees can effectively implement a strategy only when they clearly understand the strategy and when they clearly see how they contribute to its achievement." Click here for the article. (requires free registration)

BI Vendor Selection: Smarter the Second Time

September 4, 2004 from intelligent integration - The article sounded like it could have some great ideas on how to do a better job in selecting a BI vendor. Here's an excerpt - "No matter how thoroughly your organization analyzed data volumes, response time, and other technical requirements when the original tools were selected, it's essential to completely reassess those requirements to establish a more current baseline. In the world of data warehousing, some reasons are obvious: You might have new data sources and an expanding user community. More subtle reasons could include the following:

Demand for deeper drill-down analysis

The need for longer duration trend analysis, which requires additional historical information

The organization wants to expand BI beyond after-the-fact reporting to include predictive analysis or operational, near real-time mission-critical functionality.

Security needs are another critical factor. Very often, first-generation BI environments were built and deployed with minimally acceptable security standards set by what any mainstream toolset could provide. After all, part of the purpose was to make data more accessible. Now, with organizations typically much smarter and more demanding about security, second-generation BI systems must be better. BI products vary considerably with respect to security models. Choose your new toolset based on today's and tomorrow's security needs, not yesterday's."

Does this help or is it really a clever way for you to come to realize that you need the expertise of the author. However, I did notice a number of good points in the article, the best being "Set up some portion of your Proof of Concept demonstrations to emphasize what it will take to convert from the current environment. Note that this step doesn't apply only to challengers but also to incumbents: Because today's vendors are bidding with their next-generation products to replace legacy tools (for example, Cognos ReportNet to replace Impromptu), conversion is important regarding all vendors."  For the article, click here.

Using Key Performance Indicators to Maintain Strategic Focus

From BusinessIntelligence.com - "Key performance indicators (KPIs) allow a company to see in what areas it is executing well, and what areas require improvement. Before one can begin to measure performance, there must be an understanding of the company’s strategic focus. There are three general strategic focuses a company may employ and they are described as cost-, product- or customer-based. A cost-focused strategy emphasizes supplying a standard product that meets many customers’ needs without customization at the lowest cost possible. A product-focused strategy includes custom or niche products or specialized services delivered to its customers. Customer-focused companies place their emphasis on world-class customer service.

To effectively measure corporate performance corresponding to its strategic focus, KPIs should be created. These KPIs are metrics of how well the company is performing, and can be at the enterprise level or specific to departments. KPIs should contain both lagging and leading indicators as it is important for the business to know how well and in what areas it has performed in the past, while recognizing the significant value in understanding how business decisions today will impact performance in the future. Lagging measures indicate the state of the company today, such as balance sheet data, customer retention rate and market share. Leading measures forecast future performance, such as customer satisfaction, training budget and time to market. Each strategic focus has KPIs that are beneficial specifically to that type of focus." For the article, click here.

A guide to costing BI (Business Intelligence) and BPM (Business Performance Management) implementations

July 2004 from DM Review - The article makes a number of good points but misses the mark when it comes to costing the services required to implement a system. The article's perspective is - "In every vendor proposal, there is a section dedicated to services. For the most part, the vendors try to evaluate the required level of consulting support that will be necessary for a given implementation and will offer these services as an estimate of time at the present rates. Unfortunately, it is next to impossible to gather a thorough understanding of all of the business needs and technical issues during the sales process; therefore, this is the most difficult budget number to estimate. It is also the number that is most likely to change as the true level of effort is not usually uncovered until after the deal is signed and detailed requirements sessions uncover the final scope of work. Regardless of a company's relationship with a given vendor or sales representative, the proposed services number should always be increased by a moderate percentage to cover for the inevitable realization that the effort is greater than originally understood. It is typically easier to get project money approved up front than it is to go back to the well two months into the project."

We say shame on you if you sign an open ended deal without knowing the full scope of effort. There are good ways to define scope before committing to the implementation. Most vendors will demonstrate their solution in the sales cycle based on a script that includes key business processes. This is an excellent way to assess the scope of effort. If there are still questions, you can pay the vendors to perform a needs analysis prior to signing a deal. The deliverables of the needs analysis includes the costs of services with a maximum amount which will not be exceeded based on defined scope. For the article, click here.

IBM Snaps Up BI (Business Intelligence) Vendor Alphablox

July 14, 2004 from BPM Today - We have another big BI competitor - "The acquisition was a strategic step for IBM, which has watched spending in the business-intelligence space continue to grow. It will be particularly relevant for the company's data-management efforts and its on-demand computing initiatives. The market opportunity for business-intelligence software is worth more than US$7 billion worldwide and is expected to double by 2006, according to research firm IDC." For more, click here.

Ten Characteristics of a Good KPI

From BPM Partners - "There's a lot of talk these days about key performance indicators (KPIs). They are the backbone of scorecards and dashboards which have become an irresistible way for organizations to present performance information to executives and staff. Unfortunately, BI developers seems to focus more on creating visual metaphors (i.e. dial, gauges, arrows, etc.) than understanding what constitutes a good KPI that delivers long-term value to the organization. Part of the problem is that people use the terms “KPI” and “metric” interchangeably. This is wrong. A KPI is a metric, but a metric is not always a KPI. The key difference is that KPIs always reflect strategic value drivers whereas metrics may represent the measurement of any business activity. When developing KPIs for scorecards or dashboards, you should keep in mind that KPIs possess ten distinct characteristics. Although metrics may exhibit some of these characteristics, good KPIs possess all of them."  For the 10 characteristics per BPM, click here.

Twelve years later: Understanding and realizing the value of balanced scorecards

May/June 2004 from Ivey Business Journal - "The balanced scorecard is one of the most successful, endurable management concepts in recent years, but it is also frequently misunderstood. In this article, the co-authors suggest ways in which managers can make the balanced scorecard their most valuable tool...Scorecards can clarify business models, heighten awareness of strategy within the organization, make execution more effective and, consequently, improve financial performance. But, all too often these benefits do not seem to materialize." The article makes suggestions on ways to improve the scorecard process. For the article in pdf format, click here.

Online Analytical Processing (OLAP)

May 15, 2004 from Intelligent Enterprise  - This article describes OLAP functionality as well as compares features across a number of OLAP products. "I think all users — from intermittent information consumers to power users — would benefit from various aspects of OLAP functionality. Unfortunately, OLAP architectures and cost often prohibit broad access." The article differentiates OLAP from reporting based on the following functionality:

• Multidimensional: Users analyze numerical values from different dimensions, such as product, time, and geography. A report, on the other hand, may be one dimensional, such as list of product prices at one point in time.

• Consistently fast: As users navigate different dimensions and levels within a dimension, OLAP means fast — the speed of thought. If a user double-clicks to drill down from Year to Quarter, waiting 24 minutes or 24 hours for an answer isn't acceptable. Report users, of course, don't want slow reports either, but indeed, some reports take this long to run and must be scheduled.

• Varying levels of aggregation: To ensure predictable query times, OLAP vendors preaggregate data in different ways. Reporting, to the contrary, can be at the lowest level of detail: Rather than sales by product, you might have individual line items for a particular order number.

• Cross-dimensional calculations: With multiple dimensions come more complex calculations. In OLAP, you might want to analyze percentage contribution or market share. These analyses require subtotaling sales for a particular state then calculating percentage contribution for the total region, country, or world. Users may analyze this percentage market share by a number of other dimensions, such as actual vs. budget, this year vs. last year, or for a particular group of products. These calculations often must be performed in a particular order and involve input numbers that users might never see. Detailed reports, however, often rely on simple subtotals or calculations of values that are displayed on the report itself.

For the OLAP article (which is one in a series of BI articles), click here.

First Annual Survey of Business Intelligence systems Published in the June 2004 Edition of CAmagazine

Business intelligence (BI) comes under various guises, such as executive information systems, decision support and business analytics. The idea is simple – take data and turn it into information useful to make decisions. Simple idea, but not so easy to do. Read about BI and responses to our questions about cost, user base, target market and technology, as well as 70-odd functionality questions from the following BI vendors - Applix, BizTools, Cognos, Databeacon, Hummingbird, Hyperion, Informatica, Information Builders, OutlookSoft, Panorama Software and ProClarity. For the article and survey, click here.

More than 25 Percent of Critical Data Used in Large Corporations is Flawed

May 13, 2004 from Gartner - "Many major companies are making important decisions routinely on remarkably inaccurate data, according to Gartner Inc. The research firm estimates that more than 25 percent of critical data within Fortune 1,000 businesses will continue to be inaccurate or incomplete through 2007...The majority of large enterprises continue to reach for ineffective technology solutions even after they identify data quality problems, he said. These ineffective solutions often include priority spending programs for advanced business intelligence and customer relationship management (CRM) capabilities. These programs fail, in large part, because the poor quality of underlying data is not recognized or addressed." Unfortunately, you will need to purchase their business intelligence report, which is priced at $1,295 US to get the full story. For a brief summary, click here.

Microsoft Nets BI Vendor ActiveViews

April 26,2004 From eWeek - "Microsoft Corp. announced that it has acquired ActiveViews, a small, privately held maker of a business-intelligence platform based in Provo, Utah...With ActiveViews, end users will be able to employ simple drag-and-drop editing to tweak and customize reports originally created by developers." Microsoft continues to invest in Business Intelligence (BI) but so far is focusing on improving the platform for BI rather than compete directly with vendors such as Cognos or Hyperion. The question remains whether Microsoft will do a Great Plains type acquisition and start competing directly with the BI vendors or release their own Microsoft BI solution much the same way as they did for CRM. Place your bets. For more about the acquisition, click here.

Business Performance Buyers Guide

Updated for 2004, Business Finance has just released their business performance buyers guide, which contains information on vendors in different categories as well as contains some definitions and a discussion of trends. In case you're not familiar with Business Performance Management (BPM) - BPM is a category of software that enables companies to translate strategies into plans, monitor execution, and provide insight to manage and improve financial and operational performance. It could include performance score-carding, modeling, budgeting, planning and forecasting, consolidation and reporting, and business intelligence applications. Click here for the buyers guide in pdf format.

2003

Hyperion's Business Performance Management system published in the December edition of CAmagazine

Every problem for someone is an opportunity for another. Y2K seemed like a huge problem and Enterprise Resource Planning (ERP) vendors such as SAP and PeopleSoft cashed in. Their smarter customers also took the Y2K problem and turned it into an opportunity to improve their business processes. We are seeing history once again repeating itself with Sarbanes-Oxley (SOX). With SOX, CEO’s and CFO’s are threatened with civil and criminal penalties related to financial statement disclosure and lack of internal controls. This time it’s the vendors of Business Performance Management (BPM) systems that have the technology solution and stand to gain from Sarbanes-Oxley. As well, the smarter BPM customers will use SOX as a way to improve their business processes. For the article, click here.

Want to know more about Sarbanes-Oxley?

The Institute of Management Accountants (IMA) has launched a web site that contains articles and guidance on Sarbanes-Oxley (SOX). If you want to know more about SOX, click here.

OutlookSoft's Business Performance Management system published in the November edition of CAmagazine

By now you have probably heard of business intelligence (BI) - transformation of data into information that is useful for decision-making. BI solves a problem shared by many organizations that have implemented an expensive accounting or enterprise resource planning (ERP) system but have no easy way to get at the data locked up in a database. However, BI is only one component of what many organizations require to make decisions. Organizations are now turning to business performance management (BPM), which includes not only BI, but also strategic planning, budgeting, forecasting, consolidation and scorecarding (linking goals and objectives to corporate-wide key performance indicators, or KPIs). BPM will often replace multiple systems and unwieldy spreadsheets. There are a number of products that offer BPM, including Hyperion, Comshare, Cognos and OutlookSoft. Here we’ll focus on one of the newer BPM products: OutlookSoft. For the article, click here.

Business Intelligence (BI) article published in the Mid October edition of the Bottom Line

Business Intelligence has been around for a long time but referred to with different buzzwords such as Executive Information Systems and Decision Support. Although BI covers a lot of ground, it is sometimes included as a component in Business Performance Management (BPM), which also includes budgeting, forecasting, and consolidation. If you're interested in BI / BPM issues and vendors, click here for a reprint of the article.

What's different about some of the leading Business Intelligence and Business Performance Management systems

We have created a list of differentiators for Business Intelligence and Business Performance Management systems as a result of the BI / ERP conference in Toronto on October 15. For differentiators for Business Objects, GEAC Performance Management, Information Builders, Microsoft and OutlookSoft, click here.

Feedback on the BI / ERP Conference held in Toronto on October 15, 2003

We tried something new - customer case studies, independent analysis, open panel discussion... Click here for feedback from the attendees.

BI (Business Intelligence) / ERP Conference in Toronto on October 15

Michael Burns has been asked by SoftMatch to chair this conference scheduled for October 15, 2003 in Toronto. The conference will include case studies by customers, independent analysis of products, key differentiators of leading products, panel discussion and an exhibit hall. Case studies will be given by by executives from Black's Camera's, Harvey's Restaurants / Cara Operations, Hubbell Canada, Dare Foods / Deloitte Consulting, RBC Financial, Laurel Steel and Accessory Concepts Inc. BI products will include Microsoft, Intellera, Business Objects, Information Builders, Comshare and OutlookSoft. ERP products will include Great Plains, Navision, Solomon, Axapta, Infinity, and TECSYS. For a link to the conference, click here.

Intellera's Business Intelligence system published in the August edition of CAmagazine

Is the data you need spread all over the place -- across spreadsheets, a contact management system, an accounting system and a payroll/HR system? Well, you're not alone. If you work in an accounting firm, key data is locked away in your practice management system; in industry, it's in your ERP and related systems that control your finance and operations. This means you're not getting all the data you need from the various systems in a consolidated format that is useful for decision-making. You also have different reports telling you different things about your business. Intellera has created industry-specific business intelligence (BI) solutions for accountant and legal firms as well as for retail and distribution companies. For the article, click here.

Designing Performance Measures and Metrics

From BetterManagement.com and American Productivity & Quality Center - You are going to hear a lot more about performance measures, metrics, key performance indicators... "How do organizations know when they are meeting strategic objectives? Driving the right behaviors in their organizations? Beating or lagging behind the competition? Identifying warning factors of negative change? Organizations find answers in well-designed and carefully implemented measures." For more, click here.

Business Objects Acquires Crystal Decisions

July 21, 2003, from E-Business News - "In $800 million deal, enterprise reporting meets complex analytics reporting; business intelligence (BI) now has its largest vendor...In acquiring Crystal Decisions, Business Objects will pick up $270 million in total annual revenue, adding to its own $466 million. The combined company will have 3,800 employees." For the article, click here.

And Hyperion Acquires Brio

July 25, 2003, from E-Business News - "Consolidation continues in the business intelligence (BI) marketplace, as Hyperion has signed an agreement to acquire Brio for roughly $140 million." For the article, click here.

One more acronym for you to know - CPM (Corporate Performance Management)

June 2003 - Conspectus, a free UK report on IT, published a number of articles on CPM - "Applications such as ERP and CRM produce large quantities of data, but surprisingly little information. Now organisations are starting to look at additional technologies and methodologies which could provide better insights. These include business intelligence (BI) solutions, data warehousing, and a variety of management techniques, some of which are directly supported by specialist applications like balanced scorecard or activity based costing. These new solutions are taking shape as corporate performance management (CPM) – an umbrella term which describes the methodologies, metrics, processes and systems used to monitor and manage the business performance of an enterprise." For Conspectus, click here.

Geac Computer to buy Comshare for $52 million

June 23, 2003, from Canadian Press - Comshare is one of the leading CPM systems - "Geac said the acquisition broadens the Toronto-area company's suite of business performance management software with Comshare's software that helps companies with planning, budgeting, forecasting, financial consolidation and management reporting and analysis". For the article, click here.

Accounting for Business Intelligence (BI) published in the April 2003 edition of CAmagazine

BI has the potential of creating new value added services for accountants. BI is not about the intelligence of the people gathering the information or analyzing the results. It refers to turning data into information that is useful to make decisions. There is a spectrum of BI solutions. On one end, there are management or production reports, which can be simple to generate. On the other end of the spectrum are interactive slicing and dicing tools often referred to as online analytical processing (OLAP).

One day, accountants will be slicing and dicing their way through client or company's data, comparing it to benchmarks for the industry, region or size of company. Strategic decisions will depend on the analysis of the  accountant. BI has the power to transform the accounting profession from its scorekeeper/referee reputation to becoming the star of the game. For the article, click here. In the article, a number of BI products are identified. Unfortunately,  the article missed a number of systems including IBM, Oracle, OutlookSoft, BizTools and Sagent. For a full list of BI products with links to the vendor's web site, click here.

Dashboards for your business

Feb 28, 2003 - In a recent survey, AMR research has found that "more than 50% of responding companies are planning to implement scorecards and/or dashboards in the near term". Dashboards monitor performance in a way that is summarized on a page or screen. AMR Research also found that  there is significant interest in operational performance indicators and not just financial metrics. As well, dashboards are being used not just to monitor performance of the company, but also for business units, product line, projects and even individuals. For more, click here.

Microsoft's SQL Server to offer analytic reporting

Feb 13, 2003 - From InfoWorld, we read that "Currently, Microsoft offers only the ability to launch an online analytical processing query and do analysis. This change will permit its database users to create, develop and distribute analytical business reports across an enterprise."  There are many business intelligence (BI) developers such as Cognos, Crystal Decisions, SAS, Business Objects... that provide tools to generate analytical reports used to slice and dice information across multiple dimensions. In many cases these BI developers will now be competing with Microsoft. For more, click here.

2002

Having trouble coming up with a Return on Investment on IT expenditures?

You’re not alone. Based on a survey by CIO Insight, “most of the 404 top IT executives in our survey feel greater pressure than ever before to demonstrate a return on their IT investments. But there's no agreed-upon approach to calculating ROI. Worse, 70 percent believe their metrics don't fully capture the value of IT, and nearly half lack confidence in their ability to accurately calculate ROI.”  Click here for the article.

Could use some help in obtaining benchmarks?

Benchmarking is a great idea. Why not compare your business or your client’s business to what other similar companies are doing?  But getting the data is not easy. Here are some on-line resources that may be helpful. Click on Government of Canada or Canadian Institute of Chartered Accountants (only for CICA members) or Benchmarking Exchange or Benchmarking Network or Best Practices, LLC or American Productivity & Quality Center or just call us.