Second Act for Business Intelligence

You’re probably tired of reading about “new and improved” technologies for the post-crisis era. But according to a new major study by IBM, CFOs around the world regard business intelligence as key to delivering priorities such as cost cuts, providing more transparency, and making faster decisions.

IBM polled more than 1,900 CFOs and other senior finance executives from 81 countries and 35 industries worldwide. More than 60% of respondents plan major changes in response to the new, post-recession economic climate. These changes include turning a wealth of financial and operational information into business insights, where decisions are no longer made on intuition, but are fact-based.
With the appropriate analytical capabilities, finance can uncover correlations among seemingly unrelated pieces of information and find patterns nearly impossible to detect manually, says IBM.
Are we talking about the clunky and complicated business intelligence software suites that only geeky analysts could love? That’s all in the past, says IDC. According to the research organisation, the performance, availability, and user interfaces of BI solutions have improved significantly over the years. The enhancements have raised the visibility of BI across various departments and, most importantly, at the boardroom level.
Like IBM, IDC says the CFO’s office has been one of the key stakeholders in the evolution of business analytics. The finance department is starting to see the benefits of budgeting and planning tools as part of a broader performance management framework to drive operational efficiency throughout the organisation.
Drivers of Adoption
In "Five things CFOs must do in IT after recession," Anthony Plewes writes that as companies explore new markets and activities, the challenge for the CFO is how to control costs. "The key is to create a standardised financial IT infrastructure that is agile enough to support the business' growth and provide business intelligence to the desktop," he writes.
Plewes lists five keys to success in a post-recession economy, and they are: harmonise financial processes; standardise on a single global instance of financial IT; consider the benefits of new technology; look to automation; and move from transactions to intelligence.
By automating processes, the finance unit can focus on higher-value activity, Plewes argues. The most important of these automated processes, he believes, is business intelligence.
IDC points to trends such as expanding data volumes, tighter compliance and regulatory reporting requirements, and demand for solutions with predictive capabilities to improve business performance—be it through cost optimization or detecting revenue-generating opportunities—as other drivers for adoption of business intelligence among organisations in Asia Pacific.
But because the region’s companies are at different stages of maturity in terms of IT adoption and understanding of the benefits that BI can bring, IDC expects some industry sectors to be ahead of others. Banking remains the largest BI adopter and has increased advanced analytics investments to enable better risk management, fraud management and to support faster and fact based decision-making for customer related issues.
Talking to Computerworld Hong Kong, Linda Young, brand manager, Information Management, Software Group, at IBM China/Hong Kong says that before the credit crunch in 2008, most BI requirements were from retailers, manufacturers, and players in the financial sector. In 2009, inquiries from retail and manufacturing dropped, while interest from insurance and finance surged.


But Sharon Tan, research manager of Asia/Pacific Information Management & Analytics Software, Domain Research Group at IDC, thinks the recession was also an eye-opener. “The economic crisis brought home the point that many of the existing information systems were simply not capable of providing sufficient reliable and accurate information for urgent decision making purposes,” she says. “BI software adoption surged in 2H 2009 as decision makers’ confidence on the global economic recovery strengthened, and demand for greater visibility into operations grew.”  
According to IDC, the BI software market in the Asia/Pacific excluding Japan returned to positive growth in the second half of last year. IDC forecasts the a 20.5% growth this year after a modest 3% expansion in 2009.
Australia, Korea and the PRC were the three largest countries with combined BI software markets estimated to be worth 64.3% of the APEJ region’s in 2009. India, Vietnam and the PRC are forecast to have the highest growth potentials during the forecast period.
Social Media  
Yet another boost to BI usage are social networking sites. In a white paper titled "Top 10 trends in Business Intelligence 2010," HP says that data, collaboration, and social networks will take on growing importance in the new economy--a world quite different from the one in which most of today’s BI systems were developed. “The new generation of BI systems has the power to play a significant role in enabling IT to help organizations, if not whole industries, achieve the transformation agenda they seek as they evolve their businesses to respond to new competitive pressures,” says the company.
But respondents (63% of 125) of a global survey conducted early this year by Kognito and Baseline Consulting still doubt the value of analysing data obtained from social media sites such as Twitter or Facebook.  Citing the survey, the eBizQ blog says only 14% of the respondents state they want to incorporate data from Twitter and other sites as part of their ongoing data analysis efforts.
Meanwhile, HP says that BI systems will evolve to take advantage of the new computing environment to increase the ability to exploit data to improve business management. This will increase the need for enterprises to better manage data and information assets. HP believes that the need for transparency, consistency, and reduced errors will put pressure on organisations to manage their BI initiatives more strategically.
"The bottom line is the information customers volunteer online is essential data for the modern business," says Blake Cahill, senior vice president of marketing for Visible Technologies. "It is as much a part of BI as corporate sales numbers and is applicable to every level of your business, from customer service to marketing to product development. Trust your customers, listen to them. If you truly commit your company to analyzing social media, the data will not steer you wrong."
Pervasive and Predictive
IDC’s end-user survey results in 2009 indicate that decision-makers in the key APEJ countries are already planning to make BI more pervasively available in their organisations. Such intentions are often driven by increased awareness of the business benefits that BI can bring, the adoption of a performance management methodology, and the availability of more user friendly interfaces and visualisation technology.
“There is a growing trend for predictive BI and pervasive BI appears to be gaining deeper interest in some countries. Given the current economic climate, price remains a top consideration factor and any new investments will be closely scrutinized,” says IDC’s Tan. IDC expects the APEJ BI software market to grow at a 5-year compound annual growth rate (CAGR) of 12.9%.
However, in, Gartner analysts warn that “hype around predictive analytics will outpace available skill sets in 80% of organisations,” and that “without a very significant investment in training, most companies will find they simply don't have the skills required to make their BI programs more predictive.”


David vs. Goliath
The business intelligence software market is currently the battleground for more than a dozen of software vendors, with SAP, IBM and SAS rounding off 2009 in a near neck-to-neck race as the top three vendors in the APEJ BI software market, says IDC. The BI software market remained relatively fragmented and included other large vendors such as Oracle, Microsoft and more specialized BI vendors such as Qliktech and Microstrategy.
"The business intelligence software market is shaping up as a David vs. Goliath struggle. Behemoths like Microsoft, Oracle and IBM offer feature-rich BI suites along with their many other enterprise software products. Meanwhile, pure-play business intelligence software vendors -- such as MicroStrategy and Tableau -- have avid followers and are known for innovating around new features and quickly adjusting to the shifting marketplace," writes Datamation.
For Datamation, the top 10 leading business intelligence vendors are SAP, SAS, Oracle, IBM, Microsoft, MicroStrategy,, TIBO, Information Builders, and Tableau. While having only BI software supplier has been the common practice, an increasing number of companies today have standardised on a major platform but still adopt other BI brands to fulfil the different needs of business units.
About the Author
Melba-Jean Bernad is a contributing editor at CFO Innovation.

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