Special Report: BI Meets the Spreadsheet Phenomenon
The business intelligence (BI) market is about to be overtaken by what could be called the "spreadsheet phenomenon."
According to the coiner of the phrase, Nick Halsey, VP of corporate marketing for Palo Alto-based Brio, spreadsheets, God's gift to accountants, were once only used by 10 percent of a workforce, but 90 percent of the time. Now the reverse is true. Thanks to client/server tools, the same thing is about to happen in BI.
"Five years ago the bigger companies were investing in specialized data warehouses, but BI was not yet ubiquitous," Halsey says. "Now BI has become a critical part of the decision making process. The boss needs his daily sales report update. The product manager needs to look up product shipping status. Eventually it becomes mission critical."
Industry observers see a booming market ahead for BI tools. "There is a lot of pent up demand for BI," says Bill Langston, director of marketing at Sacramento-based NewGeneration Software, Inc. "Many organizations couldn't begin BI projects until they solved their Y2K problems. Once they get that behind them we feel BI will be a high priority."
They will have a lot of choices to make. Everyone in an organization can benefit from access to the company's database in one way or another. The purpose of client/server BI tools is to put the ability to do queries, simple or complex, in the end users' hands and spare an IT staff the task of running reports for them.
"IT people don't have the time to keep up with users' personal needs," says Eric Figura, sales and marketing manager at Business Computer Design International, Inc. (BCD), based in Hinsdale, Ill. "IT wants users to be more self sufficient, but doesn't want to give up control over corporate databases."
For companies without the resources to build a full scale data warehouse, BCD offers solutions that provide customized reports by querying data in standard reports.
"A lot of work has been done in reporting systems already," Figura says. "A report is like a mini-database. The information is there but 10 different users will want to see it 10 different ways. By trapping certain data we can provide different views of the same report. The database is protected and users can't slow the system by trying to run queries they don't understand."
Mychelle Mollot, director of product marketing at Burlington, Mass.-based Cognos, sees enterprise BI needs as a continuum of added value, flowing from simple, run-the-business functions to complex, improve-the-business analysis tools. Components within a single product, such as Cognos', can provide a solution for users at all levels.
For example, at the run-the-business end of the continuum, an inventory clerk can ask for a report on what products are running off a production line each week. Farther up the continuum a sales manager can ask for a report on sales in a particular region during the past quarter.
"The product suite can be used by different users in different ways," Mollot says. "The value to the user is that his or her level of sophistication doesn't matter. It can deliver the report needed by that person whether the information means anything to anybody else or not."
John Hughes, VP of sales and marketing at Silvon Software, based in Chicago, sees the consolidation of tools into single applications as a general market trend.
"BI products are becoming more packaged," Hughes says. "Analytical functions that solve specific problems, like planning, forecasting, or financial, sales, vendor performance and customer profitability analysis, are delivered as applications with the tools below the surface. The user never really touches them. It's like the ERP world. You used to select best-of-breed tools and build your own system. Now you buy one application."
Another trend, according to Brio's Halsey, is the merging of BI and enterprise reporting. "Our customers are saying they want one product with a server component and good management and distribution capabilities so they can schedule something to run at three a.m. on Sunday and distribute it to 100 people," he says. "Management and distribution are becoming as important as end user functionality and ease of use."
The need for distribution and management indicates still another trend. BI has moved from departments to the enterprise, which, in some case, means new responsibilities for corporate IT.
According to Cognos' Mollot, early use of BI was driven by departments not by an central IT group. This, she says, was because the impetus to deploy it came from business leaders within the departments, and because the enterprise frequently lacked an infrastructure for broad BI deployment.
"There have been people screaming for reports for years," Mollot says, "but it was only once the infrastructure was in place, whether it was real client/server, a LAN, WAN, or now an intranet, that they could get it without IT pushing things out to them, which is hard for IT to manage over an entire enterprise."
Internet technology has solved the infrastructure problem, and has had the interesting result of putting BI control back in the hands of central IT. "When BI was driven by departments and functions," Mollot says, "departmental IT people would be part of the decision making process and would implement BI. Central IT was left out, which may have been intentional in order to get BI deployed quickly, since central IT was concerned with organizational priorities, not departmental goals. Now, because central IT controls the intranet, central IT also control enterprise BI."
Beyond Enterprise BI
The potential offered by intranet technology as the infrastructure providing end user access to data warehouses and data marts has been quickly recognized by BI tool vendors. Most now offer browser-based versions of their client/server tools for use over an enterprise intranet.
The cost savings in client software and networking are obvious. But, looking ahead, this isn't the big story for BI, according to Dan Graham, IBM's global strategy and operations executive for BI solutions, based in Somers, N.Y. Graham sees greater potential rewards in Internet-based electronic commerce, business-to-business and business-to-consumer, over the external World Wide Web .
For example, he says, there is an advantage to sharing forecasting information with business partners over the Web in a business-to-business exchange. "If my business purchases of quantities of certain goods from suppliers, I can put together a forecast of what and how much I am going to buy during the next year using a data mart in my purchasing department. I look at last year's expense line for all the goods across multiple vendors. I give that forecast to my major suppliers, show him the inside of my company, and ask what he can do for me in terms of a bundled deal."
Graham continues, "The vendor matches it against his spreadsheet and OLAP tools and figures out what he can deliver, when he can deliver it and what discounts because I am offering him more business."
Meanwhile, Graham says, the purchasing company has the ability to contact other vendors over the Web with the same proposal. "I don't have to hook up an EDI, T-1 or any other kind of network. I don't have to send a floppy via overnight courier service. As the purchaser, I can post a forecast and ask for bids. Small entrepreneurial players who might want to bid on a portion can jump into this too. The point is, we're using the Web to gather and ship OLAP data."
On the business-to-consumer side, Graham says, a company can gather information on a customer's interests by keeping track of his button presses and click throughs on the company's Web site.
"The company keeps a data warehouse inside the connecting infrastructure that recognizes me," Graham says. "It says we've seen him before. We have a transaction history, and some purchased third party information. I'm going to build customer models and profiles of this individual's behavior. Now when I touch the company's Web site the company posts interactive banners it thinks will be intriguing to me as an individual."
As companies are working to find ways to personalize Web interaction with customers while they are on site, they turn to the data warehouse as the control tower for instructions, Graham says.