Designs of Intelligence

Companies go to enormous trouble to capture and store data, and then go to even more trouble (and expense) when they attempt to extract and use it. The systems for accomplishing the latter task go by various names — business intelligence (BI), performance management, analytics — and while a technologist could make a case as to why one category differs from another, for most corporate employees the distinctions are largely moot.

A current spate of mergers will further blur those boundaries, as BI vendors rush to add performance-management applications to their "product footprints" and performance-management vendors expand into analytics. A few companies already cut across all three categories, and the world's largest software vendors, including IBM, Oracle, and SAP, are rumored to be exploring acquisition targets.

That urge to merge is motivated at least in part by the relative success of the (broadly defined) BI market, which is booming at an annual rate of 11.5 percent, and the business-performance- management category, with growth of 12.8 percent, compared with overall growth in the software market of just 8 percent. In turn, that growth is being driven by the spread of the technology to more desktops in more parts of the organization. Traditional BI software has typically been the province of technologically astute analysts, who use it to generate reports for employees who need to know what the numbers say without learning how to make them talk. But newer performance management and analytics applications are being provided to employees throughout a company, from the executive suite to the call center.

Companies have tried to provide those capabilities to the masses before, with mixed success. Business intelligence is sometimes branded as a classic example of "shelfware," software that is bought but not necessarily used or even deployed. There are a number of signs, however, that the situation is changing.

For one, mergers take some pressure off companies to stitch together products from multiple vendors in order to address both the back-end data needs and the front-end presentation and interface issues that BI projects entail. While a genuine merging of disparate technologies typically takes a year or more following an acquisition, at the least a vendor may now be able to offer a broader family of products and help clients piece them together. Over time, analysts say, that integration will exist out of the box and may be largely invisible to end users, who may find themselves tapping the powers of BI and related technologies without even realizing it.

That, says IDC analyst Dan Vesset, is at the heart of what he terms the "third wave" of BI. In this latest wave, "a vast population of employees whose BI requirements have not been met" by the initial waves of mainframe and client-server-based technologies will find that new Web-based software improves information flow and decision-making. Expanding the reach of BI, says Vesset, will depend not only on technological advancements, but also on how companies learn from past mistakes and match their investments in software to their business practices.

Competency Centers
At De Lage Landen, the asset and vendor finance arm of Dutch Rabobank Group, the creation of a BI "competency center" has played an important role in bringing BI to more workers. Launched two years ago, the center aimed to push a range of BI capabilities, including desktop scorecards that track key performance indicators, out to employees as quickly as possible.

"If we had left that role to IT," says Daan Greven, the firm's corporate manager for process, controls, and data management, "things would have taken longer" because BI would be fighting for attention amid a score of other projects. Instead, a team of five people now fields all company requests for anything pertaining to (in this case) BI software from Hyperion Solutions. "The team members are a mix of the very technical and those with more of a finance/economics background," says Greven. They address problems and requests for changes and enhancements to the system and are part of a larger "information infrastructure" group headed by Greven that ultimately reports to the chief financial and risk officer.

Competency centers have been championed by Gartner and other consulting groups and are popular in the IT world for everything from ERP implementations to integration projects to exploring new technologies such as open-source software. When the concept is applied to BI, however, success usually hinges on strong finance-department involvement and close communication with business units that might benefit from an infusion of BI. "Ideally [a competency center] should report to finance," says Hyperion chief strategy officer Howard Dresner, "because finance is by its nature a cross-functional group, and the currency of business is money."

Dresner notes that while there were no BI competency centers six years ago, today it's estimated that 20 percent of large companies have one, and another 20 percent plan to add one within a year.

While competency centers play a useful role in helping employees actually use whatever BI software the company rolls out, Greven says the centers do more. "They have a very important advisory role in helping us realize our long-term vision of turning data into useful information that can help us drive strategy," he says. For example, while the center responds to employee requests for help or added capabilities, it isn't merely passive: it also helps push the technology further into the company by understanding how the software's capabilities complement a given department's needs. In a sense, it acts as a collective tutor and coach.

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