Firms look to kill 'gut-feel' with better analytics

Businesses big and small now need to reach right decisions based on real-time competitive intelligence, note industry watchers who say analytic tools getting cheaper and less complex.

In an environment where the ability to reach appropriate business decisions swiftly is a must-have for organizations large and small, embracing tools that deliver meaningful insight is becoming the norm. At the same time, business intelligence (BI) and analytics vendors are increasingly pushed to drive down the cost and complexity of such tools to make them more efficient for users.

According to industry watchers, BI has evolved over the last three years--both from a business and technological perspective. Culturally, this segment is now seen as more than simply a set of tools and applications, but as a way to improve and optimize business processes, said Madan Sheina, lead analyst for information management at Ovum's software group.

BI is also more strategic than ever to the business, he noted.

"Competing on analytics-driven decision making, rather than gut-feel, is now considered a norm as opposed to a luxury," Sheina explained. "The most successful enterprises will almost always have a strong BI and analytic competency."

The more informed an enterprise is about its own business--operations, customers, suppliers and partners--as well as its market, including competitors, the smarter and more successful it will be from a competitive standpoint, he added.

Similarly, David Hardoon, principal for analytics at SAS, said organizations are looking to develop a culture that derives decisions based on facts, not by instincts.

"Business intelligence and business analytics adoption have flourished because companies recognize that by embracing an analytical approach, these companies identify their most profitable customers, accelerate product innovation, optimize supply chain and pricing, and identify the true drivers of financial performance," Hardoon said.

Demands of the information age have caused this change in the industry to be more significant over the last two years, he noted. "Today's business demands require better insights for enhanced decision making, and this needs new technological advancements such as predictive analytics and text analytics to cope with the large amounts of information produced by key stakeholders to the organization," he said.

Venkat Narayanan, senior vice president for strategic initiatives at Mahindra Satyam, pointed out that BI was traditionally viewed as "predominantly internal data analysis" while competitive intelligence was primarily based on external and largely public data or limited circulation data. With the rise of social media, there is now a business imperative to include competitive intelligence as an integral part of BI.

"The fact that most external data is today [on the] Internet and advances in unstructured data mining technologies are two key technology drivers that enable the integration of competitive intelligence as part of business intelligence," Venkat explained in an e-mail. "Location-specific data collected by mobile devices is another major inclusion in the scope of BI analysis. Asia is showing increased awareness and adoption in all these areas."

Ovum's Sheina added that while cost and complexity have been traditionally associated with BI, a number of technologies such as cloud computing, event-driven intelligence, operational BI, open source BI applications, in-memory processing, pre-configured analytic appliances and predictive analytics, are aimed at turning the tide around.

"Many of the advancements in this space have been to make BI faster, smarter, more pervasively used, easier to implement, and more cost-efficient to deploy on a larger scale across the enterprise," he explained in an e-mail.

Instantaneous intelligence anywhere
One of the biggest shifts in the BI and analytics space today has been mobile BI.

Shantanu Srivastava, vice president of South Asia at MicroStrategy, told ZDNet Asia that while BI today generally is still defined as the use of Web-based techniques to report on and analyze business data, it has evolved to encompass mobile applications that allow users to remotely access and analyze corporate data.

"The biggest impact on BI is the ability to access reports and dashboards on mobile devices, including the iPad, iPhone and BlackBerry," Srivastava said. "As more executives and sales professionals see the value of using tablets and smartphones to access and analyze corporate data, an increasing number will request additional applications to help them work more efficiently and enhance decision-making."

Citing a survey of 2,400 existing and prospective customers in late-2010, he noted that 52 percent of respondents indicated mobile BI will be used by over 20 percent of their organization, making BI the most widely-deployed mobile app within these 2 years.

According to Srivastava, before integrating mobile BI in their business, companies should first assess the way they review and consolidate data. They should also assess the various mobile platforms that will enable them to make the most seamless transition to a mobile environment.

When it comes to selecting a BI partner, organizations need to look at whether a vendor's offering can take advantage of all the capabilities of their current mobile platform, such as camera or geolocation, he said. Clients should work with a BI vendor that is open and able to work with other tech providers to build specific mobile applications around the companies' needs, he added.

Real-time BI, said Venkat, has also emerged as a major trend in the last two years. "This has been facilitated by the emergence of data warehouse appliance platforms that can handle large volumes of data without significant performance degradation, and in-memory BI technologies."

Also going real-time are "automatic" actions based on insights gleaned from data, or context-aware BI, he said. For example, he noted that Mahindra Satyam developed a solution whereby loyal customers of an apparel brand can receive an offer via SMS when they enter a mall in which that brand has a presence. The offer, explained Venkat, is customized based on previous purchases or even other purchases customers made in the mall.

Asian BI uprising
In Asia, organizations have typically been slower to adopt BI, but this is changing, said Sheina.

"[There has been] a slow and steady shift in management attitudes and a push toward greater democratization of data and decision making beyond senior board levels", the Ovum analyst noted. The global financial crisis in 2009 also put the spotlight on the "availability of reliable and accurate information for important decision-making purposes", he said.

In addition, fiercer competition, data explosion, and tighter compliance and regulatory reporting are driving BI takeup in the region, particularly in the financial services sector, said Sheina.

Ram Ramachandran, Mahindra Satyam's head for Southeast Asia, concurred. The Indian IT brand, which established a Global Center of Excellence for Business Intelligence in Singapore in 2005, has seen a "marked change" in businesses' attitude toward BI and analytics "all across Asia", he said.

Particularly within the last two years, Ramachandran noted that organizations have demonstrated growing awareness and interest in taking their adoption of BI beyond basic analytics, reporting and compliance to achieve competitive advantage and better customer satisfaction.

"Besides the traditional [adopters] in the financial services, retail, manufacturing, travel and logistics, an interesting trend is the adoption of BI in the government sector," he added. "Countries like Singapore, Japan and Korea have taken a lead here and are effectively utilizing BI for driving betterment in citizen services, education and healthcare."

Smarts among the small
The shift is also taking place in the small and midsize business (SMB) sector, observers argued.

Stefan Haas, director for Asia-Pacific at AMI (Access Markets International)-Partners, pointed out in an e-mail interview that SMBs, especially those in the Asia-Pacific region, have been "facing very dynamic and volatile business conditions and markets".

In a post-recession climate of the last two years, SMBs also had to face both data explosion and the need for speedy decision making. This has led them to approach BI more from a strategic perspective and extend the current scope beyond a transactional reporting and data query tool, Haas explained.

"With SMBs in Asia-Pacific being very growth oriented, they are clearly realizing the value and the need for business intelligence as a key enabler for real-time decision making," he said. "This leads to a clear growth outperformance of the BI market opportunity over traditional enterprise software. For instance, with an expected annual growth rate of over 30 percent, the market for hosted business intelligence software or BI software-as-a-service will grow more than twice as fast as traditional enterprise software."

Where they are needed, pre-configured high-performance business analytics appliances allow SMBs to run data-heavy reports with several million data records and to significantly speed up information delivery from several days to minutes or even seconds, he added.

According to Ramachandran, BI is as relevant--if not more--for a small business as it is for a larger enterprise. "Larger enterprises have more room to recover from wrong decisions compared to smaller enterprises," he said. "As long as the data is substantial to a reasonable extent, BI becomes a must-have tool."

He added that the cloud will change the way SMBs leverage BI. Mahindra Satyam's BI product, iDecisions, is now available on both Amazon and Microsoft's Azure cloud platforms, which will enable small enterprises to tap the "best-of-class BI data models, best practices, standards and guidelines at a fraction of the cost and on a utility model".

Hardoon from SAS, on the other hand, noted that many organizations ignore technological advances and continue to rely on spreadsheets to house and analyze critical data, with the hope that this will provide them with the intelligence to make fact-based decisions about their business.

"Employees are comfortable with spreadsheets because many of them use them in both their professional and personal lives," he said. "But, relying on such laggard technologies alone for organizational decision-making equates to living dangerously, as these technologies often house dormant, siloed data that is not easily retrieved and does not provide a holistic view of the company."

"While smaller organizations can rely on using less advanced decision-making technologies, as they scale for growth and start dealing with larger resources, they will need an agile enterprise solution to help in their decision making and business analytics will give them the right information for enhanced decision making," Hardoon said.

Analyzing the way forward
Moving forward, Ovum's Sheina said issues around cost, complexity and ROI (returns on investment) will continue to challenge BI and analytic implementations.

Perhaps the biggest difficulty faced by the industry is presenting BI customers with clear roadmaps on implementing BI systems, he said. "Enterprises today face a bewildering array of choice in terms of how they source BI; every option dictates how BI systems are built and deployed and what exactly is built," he added.

In addition, "rampant" market consolidation has also put the spotlight on BI platform standardization and integration.

The big four BI vendors--Oracle, SAP, IBM and Microsoft--are "still working on rationalizing and integrating various BI tools and applications sourced from various acquisitions and in-house development projects into integrated suites", Sheina pointed out.

Hardoon noted that the Singapore government has highlighted business analytics as one of the upcoming technologies and is investing significant resources to help companies within the country be better equipped with the right skillsets to effectively use such tools. However, even though the technology is in place, SAS and the authorities see a "skillset gap" among users, he said.

"SAS is looking at bolstering the business analytics industry in Singapore to bridge the skill-set gap within the industry by working with tertiary institutions and the Singapore government," he revealed.