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1/21/2008
06:15 PM
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Next-Era BI: Proactive, Pervasive, Performance-Oriented

How do you differentiate your business when same-old BI and same-old automation are commodities? Cognos, SAP-Business Objects and independent vendors present visions and real-world examples of blended solutions.



If 2007 marked the end of business intelligence as we know it, 2008 is shaping up as a year in which we'll grope for new terminology and a new understanding of what leading-edge BI is all about. Or perhaps it's that we'll be looking beyond BI, forging a broader perspective in which business intelligence is combined with business process management, rules engines and more and then applied directly and immediately to business decisions.

At three separate events last week — Cognos' launch of the Cognos 8.3 platform, SAP's announcement of the close of the Business Objects acquisition, and Microstrategy's annual user conference — vendors seemed to spend as much time talking about the new BI as they did their own product directions. Whether the buzz words were "performance management" (Cognos), "business performance optimization" (SAP-Business Objects) or "pervasive BI" (Microstrategy), the common thread seemed to be that leading organizations are demanding (and that vendors are claiming leadership toward) something more proactive, engaged and impactful than conventional reports, dashboards and analyses.

The Next Stage of Maturity

Most organizations are still in the earliest stages of BI maturity, according to John Hagerty, a vice president at AMR Research. That means they're just starting to apply BI tools to problem areas, or they have progressed to stage two and they're spreading BI to different parts of the business. Discussing AMR's four-stage BI maturity model at last week's Cognos 8.3 launch, Hagerty said stage three is about collaborating and recognizing cause and affect among different parts of the business.

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Rob Ashe, Cognos
"The last stage of maturity is called orchestrating," said Hagerty. "As the name suggests, it's about having everyone singing from the same sheet of music. While most companies are still at the first or second stage, they all have aspirations to go much higher."

When companies do make it to the collaboration and orchestration stage, the conversation turns to performance management, asserted Cognos CEO Rob Ashe. "These are the companies that are asking, 'How do we coordinate activities for a common outcome? How do we coordinate decision making? How do we make sure that the CEO's objectives are shared four levels down within the organization?'"

At Southwestern Energy, a Houston-based natural gas supplier, BI has progressed to enterprisewide reporting and analysis. Roughly 1,000 out of the company's 1,300 employees consume reports while 250 use Cognos software more directly. So what does "performance management" mean to this company? "To me, BI is reactive and performance management is proactive," said Chad Erman, Business Intelligence Lead and a speaker at last week's Cognos event. "We're taking BI to the next level by integrating it with planning and matching [our planning numbers] with our actual numbers so we can see where we thought we would be, where we ended up and what we'll do in the future. We can start forecasting, whereas in the past it was just guesswork."

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Chad Erman, Southwestern Energy
Taking a swipe at the companies that acquired Business Objects and Hyperion, Ashe said the "center of gravity" for companies should be on business optimization and decision making, not transaction processing, "the domain of SAP and Oracle."

"Systems that help you automate your business don't necessarily make you any different than your competitors," Ashe explained. "Turning the transaction data into information and connecting it to strategic outcomes is really where the focus has to be to drive returns." Those returns might be impacted by decisions about which customers and suppliers you choose to do business with, where you put inventory, where you invest resources or "how to optimize the business and create a forward-looking view," he added.



From Automation to Business Optimization

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Doug Merritt, SAP
Ashe's vision jibes remarkably well with that offered by SAP at a press event last week. "Business performance optimization" was the buzzword of the day (see "SAP Completes Business Objects Buy, Details 'Business Optimization' Vision", and the underlying technologies discussed were somewhat different than those highlighted by Ashe.

Differentiation is continuing to "migrate away from repetitive, efficiency-oriented applications... such as payroll, general ledger and order entry," acknowledged Doug Merritt, an SAP corporate officer who is joining Business Objects to lead the development of "business optimization applications." SAP's two-year-old "business transformation orientation" holds that differentiation is moving to "more ad hoc types of processes that involve networks or teams or collaborations of organizations, divisions across boundaries," said Merritt. "For us, business performance optimization is marrying the benefits of business intelligence... with new capabilities around teaming, collaboration and business process management (BPM)."

Independent BPM vendors have been blending BI, rules and process automation for years, but SAP CEO Henning Kagermann says the question is "what will the next generation bring? In our case, it's composite business processes with built-in business rules that you can change on the fly."

As part of its NetWeaver offerings, SAP also promises a model-driven environment that will move customers from conventional (meaning, time-consuming and expensive) development led by IT to agile, self-service composition led by business analysts. But for now, that's more vision than reality. SAP's process management suite is currently a demo product that isn't due out until the end of the year. In contrast, Oracle and IBM both have months-old BPM suites, but they are well behind the years-old independent leaders in Gartner's most recent (December 2007) BPMS Magic Quadrant (see related "Q&A: Gartner's Janelle Hill on the Future of BPM, SOA and Enterprise Apps." )



The Independent Path to Embedded BI

Of course, plenty of cutting-edge companies have already blended business intelligence with decision systems without the aid or application or process management vendors. In a "CTO Exchange on Pervasive BI" at last week's Microstrategy World Conference in Miami, top executives from Informatica, Teradata and Microstrategy observed that leading firms have embedded BI to drive inbound and outbound cross selling, point-of-sale fraud detection, automated insurance claims triage, personalized offers from ATMs and POS devices and real-time manufacturing quality alerts, to name just a few applications.

"What we're calling Pervasive BI is much more than just presenting operational data or a dashboard. It's really about integrating information into decisioning processes through decisioning services," said Stephen Brobst, CTO at Teradata and co-author, along with CTOs Jeff Bedell of MicroStrategy and James Markarian of Informatica, of the white paper "Critical Success Factors Deploying Pervasive BI."

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John Hagerty, AMR Research
"A lot of enterprises have had very successful real-time data warehousing environments, but [pervasive BI] brings transactional systems and analytic systems together so you have more information at the point of decisions, which tends to be a shift from traditional warehousing," added Markarian of Informatica.

Whether "performance management" or "business optimization" or "enterprise decision management" ends up being the term that sticks, the idea is getting to a better bottom line, said Hagerty of AMR. "If companies can get to an environment in which they can understand what drives their business, they'll want it pervasively throughout the company," he said. "Pervasive means it's available to everybody, in a format that makes sense to each user and delivered to people as part of what they do without having to think about it."

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