Analysis: What Might a Recession Do for BI?

BI was made for economic slowdowns, and over the coming year it may get a chance to show its stuff.

Business intelligence was made for times like these, wasn't it? While those who manage by "gut" slash like fools, the smart ones enter the sterile field like surgeons. Those with BI know exactly which organs to repair and which to remove. At least that's how it's supposed to work.

"Companies that have done a good job of BI will kill the competition," says consultant and author Sid Adelman. A quick survey I took of BI thought leaders recently found absolutely bountiful confidence about BI's usefulness and the industry's health.

Companies that understand their customers and their suppliers, that use that knowledge to negotiate skillfully, and that use knowledge of their products to reduce service costs have a big advantage, says Adelman.

When BI gets to show its stuff, perhaps its benefits (both tangible and intangible) will be better appreciated. It may then be easier to attract good people to BI projects and to keep them, he says.

Claudia Imhoff says, "The glory days are gone." You can't spend money like crazy to catch a few customers. You really have to think about which customers you want and which products will carry you through, she observes.

Where BI gets the attention it needs, it's already preparing companies for the storm.Jill Dyché of Baseline Consulting Group finds that big strategic questions have taken the spotlight. Companies she works with are reusing operational data to one-up the competition with better marketing and branding.

One medical-equipment reseller she works with has combed through data to figure out how to improve sales with kits. For example, those who order an endoscope may buy it in a kit that includes other items that similar customers often want along with the endoscope. A kit's contents vary. Physician groups may get one slightly different from one offered to hospitals. Meanwhile, a pharmaceutical-testing firm is using BI to help package summarized data for across-the-board comparisons.

No Dips

Not one consultant I talked to has seen a dip. Several cite the huge venture capital that has gone into BI companies recently, such as $27 million into Greenplum, $20 million into parAccel, and $25 million into Siperian.

Mark Madsen of Third Nature Consulting cites recent technology priority lists that show BI at the top. "If you cut costs, you don't cut top priorities, you cut the lower ones."

Tom Quintal of LoganBritton reports a much better scene than in 2001. Of its three dozen projects now underway, he says, not one has been pulled back or cancelled. Back in 2001, many companies pulled back. "That was a daily event," he says.

Dashboard maker Corda Technologies has even seen a surge in the last 30 days, reports western region director of sales Greg Turman. Buyers say that it's more important than ever to see what the data says. "They say they've had the tools for years and haven't been able to make them work." Ease of use is the new rule.

New inquiries include one from a large Canadian manufacturer. It's in a big hurry to cut back operations, but they want to be smart about it. They want Corda to quickly come up with a display that will run off data in Microsoft Project. Perhaps emergency BI is better than none. A senior ETL architect at a major BI vendor laughs when he hears the story and says that at least Corda's story shows interest by the "big guys."

"I find it astounding that people go into a [BI] project without looking at the power dynamics in an organization," he says. "Who's going to use this stuff? If we're competing with Little League and seat-of-the-pants, no one's going to look at BI unless the big guy does."

Good data doesn't necessarily lead to good decisions, he says. "Take Enron. They knew the facts. I tell my children that there are three main reasons people do anything: fear, greed, and sex," he says. "BI projects may be this year's black lingerie."

Making the "big guys" learn to love BI will be one thing any 2008 slump will do for BI, he says.

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