May 17, 2004
In the enterprise BI marketplace, vendors find themselves involved in a game of musical chairs. Many customers are consolidating systems, including BI applications, and are going with fewer, more comprehensive tool suites. No one wants to be left standing when the music stops.
For nearly 30 years, Information Builders Inc. (IBI), led by Gerald D. Cohen, has seen the field of competition change shape and size many times. Keeping an ear tuned to changes in customer demand — today, toward enterprise Web-based deployments for information access and delivery — the company prospers with its portfolio of both BI and integration software. In late April, I discussed key factors shaping today's BI demand with Gerry Cohen. IE: What's your view of performance management and how the implementation of this concept is evolving? Cohen: Well, there's the term "corporate" performance management [CPM], which is a subset of the BI market and is largely of interest on the financial side. CPM gives you metrics for budgeting, planning, and the management of financial processes. However, I see performance management as a much broader area, covering stuff that companies have been doing for years. You have a huge number of information systems out there that may not be CPM but are definitely focused on performance management. A good example is a dealer warranty system IBI did with Ford Motor Co. One of the largest expenses an auto company faces is paying for the repair of your car for the next five years. Ford developed a set of metrics to enable dealers to see their costs in every category and compare how they're doing vs. other dealers. IE: So, you don't see performance management as a new thing for most companies? Cohen: No. For years, we've been very focused on systems that help companies improve the efficiency of their operations. You don't necessarily have to have a Balanced Scorecard to do that. The hype about performance management today often reminds me of the days when EIS [executive information system] applications were hot. People then would say, "If you give an executive a way to manage his or her whole process, and let the executive see how everything bubbles together, then all the people who report to the executive will want access to it so that they will know what the boss is looking at." We used to sell a ton of EIS. However, these were totally elective systems. What happened was that the executive who put in the system and used it would leave, and then the new executive would say, "Well, I really don't need this. I have a different way of managing." The EIS would then just collapse. I like information systems that come out of the operational world and then have a managerial or analytic component applied on top. The Ford warranty system I described is a good example. Ford wouldn't have built the management analysis component unless it had the operational system in place. What people are doing today — which is I think a mistake — is building a superstructure analytic system by itself. IE: Metrics, dashboards, and portals are creating a new context for information delivery. What is your perception of this change? Cohen: We call ours a BI dashboard, which gives customers a chance to distribute information very widely in their organizations so that everybody gets the same truth, you might say. It's very popular. We've added metrics to the dashboard, and potentially the next level of development will bring a more fully formed CPM type of thing as an outgrowth of everything else we're doing. The main point is that the dashboard should be built on the same structure for information distribution as you have for other BI and reporting needs. This is what our customers want. So, if they want to do CPM, operational BI, large-scale reporting, or analytics, we can support them. IE: To fill the dashboards, are your customers showing strong interest in real-time BI? Cohen: Some are, but it depends on what you mean by real time. We worked with a big telecommunications company recently on a system that would allow their field service technicians to manage line repairs. Now, you've got to have pretty real-time data for that system because if someone fixes a line, this information has to go into the database and the BI system has to let managers see the up-to-date information. IE: A big decision is how much "real time" a company is willing to pay for. Cohen: Yes, but there are a lot of options. You can trickle-feed data warehouses. We have customers with systems where, when a change is made in the production transactional system, it feeds an entry into the data warehouse at the same time. Our iWay Software division works on systems like these. With iWay, we're in the integration business as well, so we can approach these issues from a number of directions. IE: Let's talk about integration for a moment. Many companies have goals such as a "single version of the truth," and a "360 degree view of the customer." These goals are obviously important to enterprise BI, but what's your perspective, given that IBI also offers integration software? Cohen: Basically, that's what integration is all about: making that one version of the truth. The BI stuff is after the fact: In other words, the data is already in the warehouse, and the BI tools report from it. The BI vendors might take credit for the one version of the truth, but really the whole operational process of reaching out and grabbing information from all over the place is largely a non-BI event. IE: We often hear that a big impediment to achieving the single version of the truth — or at least deriving full value from it — is what's known as "spreadsheet hell," where every manager comes to the table with his or her own set of data. Will BI have to dislodge the spreadsheet to give organizations that single version of the truth? Cohen: We see a lot of Microsoft Excel, but mostly for private analysis. We were one of the earliest vendors out there with an Excel interface. However, I don't see real corporate information distribution being done with Excel. You have to remember that a lot of our customers have systems with thousands of users. The Ford system I mentioned has more than 25,000 users. You might have a manager say, "Here's an Excel report I'd like to put out to some of my managers" — but not to 10,000 users in the enterprise! That's what Web reporting is all about. IE: Do you see corporate governance as a big driver for BI right now? Cohen: Corporate governance is mostly about getting the accountability down pat and finding that one version of the truth, along with more auditing, creating audit trails, and so forth. I wouldn't say it's a huge driver. The biggest driver for us is the need to establish enterprise BI. A customer told me recently that he did a survey in his company, a reasonably sized financial institution. The company had 3,600 servers with all kinds of stuff, including every BI product you could imagine. He said, "You know, we think we could consolidate these down to about 1,500, with bigger servers doing multiple applications on one server." Now, by trimming away about 2,000 boxes, that's a savings of millions of dollars in peripheral software, app servers, operating systems, security — all of that stuff. Most of the advanced thinking right now is about how to save money. During the go-go years of the 1990s, everyone was in decentralization mode. Now, companies are much more into how they can save a lot of money by centralizing. That's why there's this drive toward enterprise standards. BI has become a category — a platform not just for a simple application, but for a broad class of applications. Information flows through an organization like oil. It keeps things moving. A system over here that just does some little analytic application isn't going to change the course of a company. We have customers looking at implementing systems designed to save their companies millions of dollars. You can save hundreds of millions of dollars if you run your warranty systems better or make repair technicians more efficient. You need information to manage that process. That's really where the game is being played. It's nice if one manager on top can analyze something better and get a great idea, but that doesn't substitute for making it possible for 5,000 people in the field to do their jobs better. David Stodder Is Editorial Director And Editor-In-Chief of Intelligent Enterprise.
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