Asia's business intelligence conundrum

Businesses in the Asia-Pacific are not capitalizing on business intelligence tools, and many are taking their time to decide if the technology is worth the investment.

John Brand, research director at analyst company Hydrasight, noted that BI adoption in most of Asia is still not at the level of the mature markets of Australia and New Zealand.

Brand said businesses in these mature markets are now starting to integrate BI visualization components into applications. Many have been using BI tools for financial planning, with the same tools being increasingly extended to other business processes such as service management within organizations.

In contrast, Brand noted that in Singapore, there is "quite a bit of adoption, but they're not always used to deliver good, solid business value".

"While companies in Singapore have established BI dashboards, these become hard to manage over time because they try to pack too much information--which are not always high value--into a single reporting environment," he added.

On Korea, Brand said there is good usage of BI tools, but only in certain verticals such as financial services, high-tech manufacturing and government. "The market in Korea is patchy and you need to look for organizations that are doing it well," he said.

In Malaysia, usage and understanding of BI tools is low, according to Brand. "They tend to focus more on specific business intelligence roles, so they will assign people to the role of being responsible for business intelligence.

"That means helping the organization centralize reporting and understanding their information assets by compiling information from multiple sources," he said. Malaysian companies tend to rely on internal BI consultants instead of deploying BI technology to a broad range of users.

Despite growing interest to centralize reporting using BI tools, Brand said, most organizations across the Asia-Pacific region use Microsoft Excel as the main BI tool.

According to analyst company IDC, the BI and business process management market in the Asia-Pacific region, excluding Japan, will reach US$670 million by 2010, with a compound annual growth rate of 12.9 percent.

In an e-mail interview with ZDNet Asia, V.R. Srivatsan, vice president of Business Objects South Asia, noted that while the majority of BI deployments in the Asia-Pacific region are still at a basic level, more sophisticated deployments in the next three to five years can be expected.

He said: "We speak to customers, both existing and potential ones on a daily basis, and the fact is the majority of these customers do understand the value of business intelligence.

Compared to companies in North America and Europe, Asian businesses are more cautious and prudent.

Srivatsan explained that Asia-Pacific businesses tend to thoroughly explore all the potential possibilities and ferret out the potential issues, as well as determine future technology roadmaps before embarking on any IT implementation.

Such prudence and careful planning means longer decision-making cycles, which is not necessarily a bad thing as businesses ensure they achieve the full potential of BI when they do decide to implement the tools, he added.

Other factors that impact decision making are the diverse cultures and business environments of companies in Asia-Pacific. Srivatsan said that businesses in this part of the world tend to deal with a wider range and greater volume of information, which "adds to the complexity and timeline when considering any BI deployment".

According to a statement by analyst company Gartner last year, significant inhibitors to the successful deployment and adoption of BI still exist.

Gartner said that limited BI skills and competencies, combined with a perceived high total cost of ownership (TCO) and difficulty in quantifying the direct business benefits of better performance and improved decision making will continue to hamper adoption.

Srivatsan agreed that that there is a dearth of Asian BI expertise, which is critical since the technology is often highly-customized. He added that Business Objects has already established joint initiatives with educational institutions across Asia-Pacific to grow the region's BI talent pool.

Gartner suggested that organizations establish an internal business intelligence competency center (BICC) to spearhead BI adoption.

The center should focus on several key aspects, such as the justification, scope, budget as well as technologies and services that should be dedicated to creating a sustainable business intelligence initiative. In addition, the BICC helps evangelize the business value, and also educates and trains users.

To ensure a successful implementation, the BICC should consist of business executives throughout the company, as well as business analysts and IT staff.

By 2009, more than 60 percent of global 2000 companies and government agencies with cross-enterprise, strategic business intelligence initiatives are expected to have formed BICCs, according to Gartner.