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5/10/2005
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The New Analytics Aren't One Size Fits All

Smart new applications are taking on tough, industry-specific problems all-purpose BI tools can't handle. Just don't call them analytics.

Really good ideas never die. However unsuccessful their debut, they're either recast in more acceptable terms, or circumstances change and turn the unacceptable into something no one can do without. This has always been the case in enterprise software, and never more so than in the example of the oft-deprecated and underappreciated concept called analytics.

If you've read my columns before, you know that I frequently bemoan the state of analytics and its kissing cousin, business intelligence. Not because the products necessarily lack functionality but because the user community has yet to adopt analytics with the fervor and attention the technology and software warrant.

The problem is so severe that using the word analytics has largely become forbidden in product marketing. Sure, BI and reporting tools companies continue to thrive, but they succeed the way a bandage succeeds in an emergency room: useful, but hardly the ultimate solution.

Then there's the rest of the industry, led by the likes of SAP, Oracle and Siebel. They keep coming out with — and then scuttling — plans for new analytics solutions that fail to light fires under users or inspire them to write large checks. In the end, analytics, the marketing term, has become synonymous with lost opportunity and failure.

Until now. Some new and highly useful applications of good old analytics technology are seeing a growing wave of acceptability and user adoption that proves the merits of the original idea. Needless to say, the vendors of this new wave don't use the word analytics. And they eschew the big-bang, every-bell-and-whistle approach that doomed so many previous solutions to timely deaths due to overcomplexity and underspecialization. These new vendors use terms such as performance management, and their solutions run in conjunction with the transaction stream, not out of some distant data warehouse. The new analytics operate in real time, and they're very, very smart.

The companies riding this new wave include Edge Dynamics, OSIsoft, Merced Systems, Virsa Systems and Steelwedge, among others. These vendors answer that quintessential analytic question — How's the enterprise doing? — but they untangle the truth with specific domain knowledge and expertise that make past general-purpose analytic solutions look as supercilious as they have proven to be.

In each case, these new analytics vendors look at a specific industry or domain problem: Edge at order-stream optimization for pharmaceuticals, OSIsoft at shop-floor performance management for process manufacturing, Merced at call-center performance for complex product companies, Virsa at regulatory compliance and Steelwedge at manufacturing forecasting. These are incredibly complex problems that big enterprise applications and general-purpose BI tools simply can't begin to decipher — unless you're willing to pay an army of consultants to build one-off solutions that will probably do too little and cost too much.

Like good analytic solutions should, these next-wave products draw data from the enterprise's existing systems, analyze a complex performance or transaction stream, apply company- or industry-specific knowledge and then produce a report, alert, dashboard or other notification that pinpoints the problem and provides some insight into how to solve it.

This specialized focus, and the ability to drive the user toward problem resolution, distinguishes this new breed of analytics from the old. One of the main problems with the old analytics was the toolkit approach that many vendors favored — as if answering questions about enterprise performance was simply a matter of providing enough pivot tables and cool executive dashboards to ensure that something eventually stuck. The new breed solves specific problems, not the general issue of problem solving, and answers are provided based on deep industry knowledge rather than cool display technology.

Even if we never hear the word analytics again, the technology is here to stay. There's proven value in knowing how specific enterprises are doing, and if you're not implementing one of the new breed of analytics now, you will one day. This is one good idea that's here to stay.

Joshua Greenbaum is a principal at Enterprise Applications Consulting and has been covering the software industry for more than 20 years. write to him at josh@eaconsult.com.

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