Analyst Perspectives

The business intelligence (BI) technology market is undergoing a revolution. I’ve been working in this segment for 20 years, and it is and has been an exciting market in which to work, but its dynamic nature can be daunting to organizations trying to evaluate, purchase and deploy BI to improve their business processes. And despite the advances our benchmark research shows high levels of dissatisfaction with and immaturity in BI capabilities within organizations.

Challenges remain to spread adoption of BI among a wider audience and improve its use in organizations. We have recently seen progress in integrating information management and analytics into a single framework, but more work remains. The use of collaboration will help improve dialogue and delivery of information to business users. Organizations can also adopt and support mobile BI technologies to enhance productivity and broaden the reach of BI.

Technology exists today to apply analytics to all information regardless of volume, data type and origin. However, organizations still struggle to evaluate alternatives for supporting large data sets including location data, event data and machine-generated data, all of which can contribute to more accurate analyses of their business processes. Also as the proportion and volume of unstructured data grow, users will need to incorporate text analytics to complement structured data analysis. On top of these challenges businesses now operate at Internet speeds and must analyze data and events as they are created or miss fleeting market opportunities.

Organizations must develop their analytical capabilities further not just to provide data but to optimize business decisions. To enhance decision-making and improve business outcomes, they must move beyond historical analysis to look forward through planning, forecasting and predictive analysis. And the dramatic rise in popularity of social media creates another source of information to incorporate in the decision-making process and another channel for involving larger groups in feedback processes.

We see five underlying technology innovations impacting BI and creating the aforementioned revolution: cloud computing, mobile technologies, social media, analytics of more types over more data, and collaboration. My colleague has identified these five areas as the business technology revolution in 2011, and all are directly relevant to BI. As I’ve previously pointed out in “Clouds are Raining Corporate Data”, cloud-based BI systems are rising in popularity. So are other types of cloud applications, which means that more and more of the data organizations need to analyze will reside in the cloud. I’ll be examining the issues of business data in the cloud in a benchmark research program that is just about to get under way.

Mobile technologies are invading the enterprise through employees. As mobile devices have developed more capabilities and larger form factors appear in tablets, business users on the go are demanding access to BI wherever they may be. Some software vendors and innovative enterprises have recognized these devices as vehicles to enable front-line BI and decision-making capabilities. More organizations are supporting their business users and realizing benefits of both broader BI adoption and enhanced productivity of their workforce.

Social media has created several new challenges for businesses and their use of BI. First, this rich source of information can help companies understand customers and prospects, their characteristics, their opinions and their experiences in interacting with the organization. But analyzing unstructured social media content is new to most organizations. Second, social media can also play a role in collaborating on BI-aided decision-making processes (discussed below). Third, social media is a source of information and opinions about the BI products and services organizations may be evaluating. Finally, the combination of social media and mobile technologies is increasing demand for real-time data and instant analysis of it.

Collaboration technologies, as applied to BI, are not the same as social media. Social media such as Twitter, Chatter or Tibbr may be used as part of a social process, but collaboration is more than just a conversation. It includes workflow and approval processes as well as tracking communication associated with BI decision-making. Social media can be the delivery vehicle for some of the information and conversation tracking, but it is not sufficient on its own. Innovative organizations recognize the processes involved in BI are as important as the technology and take steps to provide collaborative support to their BI activities. The rise of social media has helped raise awareness of collaboration in general, but many organizations are still confused about how to apply collaboration to the BI process.

At the core of BI, analytics have evolved beyond simple historical analysis. More advanced analytic techniques have been available for decades but are still not widely embraced. For example, our recent analytics research shows that only 25% of organizations are using planning and forecasting in their BI applications. However, in business areas such as finance, planning with what-if and scenario modeling has been common for years, in part because the volumes of data were smaller and more easily managed. In other specific business functions such as fraud detection, predictive analytics have played a significant role for years despite their cost and complexity because of the magnitude of the savings that could be achieved. With these business areas paving the way and with the advent of information management technologies that can marry larger volumes of data with more powerful analytics, organizations can now deploy these capabilities across a much wider range of business problems. I’ll be examining the role of advanced analytics and the obstacles still facing organizations as they try to deploy these capabilities.

In short, while the challenges are great, so are the opportunities. It’s an exciting time in the BI market. As you assess how the business technology revolution affects your BI efforts, please check back here for updated research that can help your organization mature in its use of BI.

Regards,

Ventana Research