Getting smart about business intelligence

Bernard Liautaud describes business intelligence (BI) as getting at a single version of the truth. This may be an elusive ideal, but even a somewhat close approximation of the truth can have a significant impact on the health of a business.

Bernard Liautaud describes business intelligence (BI) as getting at a single version of the truth. This may be an elusive ideal, but even a somewhat close approximation of the truth can have a significant impact on the health of a business.

Liautaud is the co-founder, chairman, and CEO of Business Objects, one of the leaders in the BI software category. The BI premise is simple. Enterprises are inundated with data about their businesses from multiple sources, and need tools to gain more insight and control over complex business operations.

"Most customers have specific business pains, and see BI as way to optimise their businesses in different ways," Liautaud told me during an interview last week. "As an example, a big tobacco company was losing a one percent share to its nearest competitor. With BI, the company got a deeper understanding of the problem, which turned out to be ineffective pricing and promotions. In effect, they spent a few million dollars to deal with a billion dollar problem."

According to an IDC research report, the median return on investment I for BI solutions is 112 percent in 12 months. With the promise of that kind of ROI, numerous BI vendors are updating and extending their products to take advantage of the trend.

The newfound energy around BI requires its own modicum of business intelligence to sort through the various options and players. Gartner ranks Business Objects and Cognos as the category leaders in the enterprise BI space, followed by a host of other vendors, including Crystal Decisions, Informatica, Actuate, Microstrategy, Brio, Computer Associates, Information Builders and Hummingbird.

In addition, enterprise software behemoths like Microsoft, Oracle, SAP, SAS, PeopleSoft, and Hyperion are integrating their own BI analytical functionality as part of broader application platforms or suites.

The basic idea is that standardising on a single vendor with an integrated suite that includes BI can save implementation costs and offers a more unified interface to users. If you use SAP's supply chain management application, for example, would it be easier and more cost effective to use SAP's analytic application for supply chains than what Business Objects or other BI vendors offer? For smaller companies who prefer packaged solutions and dealing with fewer vendors, that may be the case. But, in a world in which standards prevail — and we aren't there yet — you should be able to use whatever vendor provides the best solution at the best cost.

As a result, many BI vendors are going upstream, preferring to develop more of an enterprise-wide portfolio of products, rather than be pigeonholed as a single, point-solution provider — even if they offer some best-of-breed functionality for a particular niche.

BI is now part of enterprise performance management (EPM) systems, which also integrate business metrics and methodologies such value-based management. Portal vendors are integrating BI capabilities, and offering dashboards that give users a set of controls for accessing and communicating key performance indicators and other business metrics.

Liautaud is looking over his shoulder at the bigger players but is not particularly worried. "The reality is that analytic applications and a business intelligence platform is different than the core business of those companies," Liautaud said. "It is a category in itself. We have an analytic application suite, including a customer intelligence app, but we don't do sales force automation or call centres.

"There is a realisation in the industry that transactional applications like SFA have very different characteristics than analytical applications. Our independence from the application and database providers is an asset. Burger King, for example, uses Oracle and SAP, and uses Business Objects to have one version of the truth."

Liautaud may say he isn't worried about competitors outside of the pure play BI vendors; nonetheless, he is focused transforming Business Objects from a software supplier of a point solution to a software platform. He talked about developing an "end-to-end stack" that fully integrates data integration, querying, reporting, OLAP, analytic applications, administration, collaboration, best practices, and portal and dashboard capabilities.

Version 6 of Business Objects Enterprise, due this spring, makes some progress against the platform goal, bringing the Web version of Business Objects to parity with the Windows client. "The current Web environment doesn't provide multi-block reports, for example, or support for complex calculations and Web interaction with data. We are also providing much better portal software," Liautaud said.

Following Version 6, Business Objects will focus on collaborative features, such as role-based information sharing; recommending next steps based on events, exceptions, and alerts; discussion and annotation capabilities for reports and analyses; and goal setting and performance monitoring to track business performance.

The profusion of activity around BI is a good sign that software will get smarter and reveal more secrets — without waiting for artificial intelligence to become mainstream. The cost for BI will come down as well. According to Liautaud, the average price per user today is $600 to $700 for basic query and reporting functions. Business Objects' customisable dashboard is $1,000 per user and an annual maintenance fee of 15 per cent. Competition will drive pricing down, but consolidation within the BI space over the next year or two will mean fewer players, which could have an impact on the pricing pressure.

This much is clear: More than ever, there is a need to turn gigabytes or terabytes of data into actionable information. If knowledge is power, then a BI platform is the engine to turn your repository of data into knowledge.