In-Depth

SAS Jumps into the Services Fray

Analysts say the company is trying to extend its reach beyond bread-and-butter analytic applications

• By Stephen Swoyer
• 10/29/2003

The newest business intelligence (BI) offering from SAS Institute Inc. isn’t really a conventional product at all. Instead, it’s a methodology, dubbed Information Evolution Model (IEM), which lets companies improve the way they manage their information assets.

SAS says that it has a patent pending on the IEM methodology, and plans to unveil salable IEM-related services sometime in early 2004. Analysts say the Cary, N.C.-based BI powerhouse is trying to extend its reach beyond bread-and-butter analytic applications and into services.

The question is: will SAS find a receptive audience among C-level executives that have probably never even heard of it?

SAS certainly thinks so. Bill Prentice, a technology strategist with SAS, says customers can use the insights they gain from IEM to develop a roadmap to align corporate strategy across four dimensions—people, process, culture, and infrastructure. In this regard, Prentice stresses, the IEM attempts to speak to corporate decision-makers on their own level.

“This speaks to more of a C-level audience, because it starts to paint the picture of why they’re struggling. They’re buying a lot of tools and [are] not getting the results that they want,” he comments. “Part of the [IEM] methodology says that you’ve got to address the way people buy, and work so that you can affect a culture change.”

Prentice says SAS has identified five levels in an “evolutionary continuum” ranging from an operational focus in the low-end to a high-end focus in which companies exploit information to produce innovation. “At the operational level, it’s basically an individualistic approach, where everybody has information needs, but only a few people have the skills and knowledge to get that information,” he explains.

SAS finds that many enterprises are at an intermediate level in their information management and utilization. “That’s sort of the target area for all of the enterprise data warehousing that’s going on, where they build one single version of [the] truth, and we see a number of companies sort of achieving that now,” he says. “When companies get to there, it’s very much a tipping point. You very quickly see what your efficiencies and inefficiencies are, what your core processes are, what’s working and what isn’t working very well.”

The next phase—optimization—is a precursor to the nirvana of the IEM methodology: innovation. “That’s where you use your information and knowledge of the market of your competitors and your own operations to leverage a continuous innovation process,” he notes.

Not surprisingly, Prentice touts the IEM methodology’s natural synergies with SAS’ line of BI and analytic tools. Adopters don’t necessarily have to be running on SAS to tap IEM-related services, however: “Most companies have a mix of products, so even though we would love to be able to say, 'The only answer is a true SAS solution,' that’s not the case. That’s not the reality of the solution.”

Prentice says SAS has had some luck communicating the benefits of the IEM methodology directly to C-level audiences. “We’ve had a couple of cases where we’ve gone out to C-level audiences—CIO, CFOs—and they’ve grasped this concept very well and have been quick to see where their company is and how it can help them,” he says.

Nevertheless, he concedes, SAS isn’t directly partnering with any of the professional services firms that traditionally cater to such customers, although Prentice says some services firms have expressed an interest in using the IEM methodology.

Some analysts say that this misses the point. “It’s a good way to get their name higher up in the organizational chain, which typically involves people at the C-level. But they’re going to have a credibility issue until they get some established reference customers in big accounts,” says Mike Schiff, a senior analyst with consultancy Current Analysis Inc.

“If I were SAS right now, I’d be lining up consulting firm partners to certify these [firms] to go out and do it, because they have the credibility and the access to these C-level executives. While SAS may be attempting to do this on their own, they certainly could jumpstart it by partnering with [professional services firms].”

Schiff points out that although IEM bears a facile resemblance to balanced scorecarding, it’s actually quite different, as it basically proposes a qualitative study of people, process, culture, and infrastructure, instead of a quantitative study based on key metrics. “IT’s probably a reasonable thing for companies to get a better idea of where they stand, because SAS will develop templates by industries so that companies can do benchmarking,” he observes.

Cognos Inc.’s emphasis on corporate performance management (CPM) is probably the closest analogue to what SAS is about with IEM, but it also provides an interesting contrast. Unlike SAS, Cognos hasn’t attempted to extend the reach of its own services arm into corporate accounts. Instead, Cognos has partnered with IBM Global Services.

Schiff says that SAS’ strategy, while risky, could amount to a coup of sorts if it’s able to increase its mindshare among C-level executives: “It’s definitely a way of trying to get higher up in the organization, as a trusted consultant if you will.”