Performance Management Driving BI Spending - InformationWeek

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2/14/2006
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Performance Management Driving BI Spending

But most companies still haven't reached expertise with performance management, which requires buy-in from broad swathes of the organization, a Gartner analyst says.

Performance management is one of the three big factors driving growth in the business intelligence market, but most companies still are trying to figure out how to carry it out effectively, a Gartner analyst said Tuesday.

Research firm Gartner announced last week that it expects new license revenue in the worldwide BI market to reach $2.5 billion this year, up 6.2 percent from last year. License revenue is expected to hit $3 billion by 2009.

Business performance management (BPM), also sometimes called corporate performance management (CPM), involves using large volumes of in-house data to drive business decisions in line with key performance indicators, and thereby run operations more efficiently. But most companies still aren't succeeding at performance management, because it requires more of a company-wide effort than smaller BI initiatives.

"They're out there, but they're few and far between. CPM is the next level of BI," said Gartner principal analyst Colleen Graham. "There are pockets within companies doing BI well, but performance management has to be synchronized across the entire organization."

The same can be said for improving data quality, which also requires executive-level leadership in order to be done well, the analyst said. Data quality problems usually don't stem from the IT side alone, so business staff and technology staff have to work together in order to ensure good data.

"Data quality requires a certain level of sophistication within a company to even understand that it's a problem," Graham said.

Besides performance management, other forces spurring BI investment include the growing amount of data being generated by large-scale software systems such as ERP tools and customer relationship management applications. A tightening regulatory environment, as exemplified by Sarbanes-Oxley, HIPAA and Basel II, is also pushing acceptance of BI tools.

Gartner partly bases its long-term BI growth projections on the swelling number of mid-range companies that are using basic reporting and analytics tools made by database manufacturers and other big software companies. In particular, vendors such as Microsoft and Oracle have begun to add BI functionality that's relatively simple for non-IT staff to understand and use. Usability ranked as the single biggest impediment to successful BI deployments in a report Gartner released last year.

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