Business User's Power, Influence Over BI Decisions Growing
IT must become more responsive to the needs of business users. If it doesn't, it runs the risk of becoming irrelevant.
According to a recent report from industry veteran Howard Dresner, the power and influence of IT is waning while that of business users continues to increase.
That's just one of the conclusions of Wisdom of Crowds, a new business intelligence market study by Dresner's consultancy, Dresner Advisory Services LLC. Dresner, like the former E.F. Hutton, has undeniable cachet in his area of expertise: when he talks, folks listen. He's credited with first coining the term "business intelligence" (BI) more than two decades ago, when he was still a research analyst with the former Gartner Group (now Gartner Inc.).
Dresner says his new report "give[s] a voice" to the actual consumers of BI tools: workers in the trenches -- from both business and IT backgrounds -- who have first-hand experience with the performance, capabilities, and shortcomings of prominent BI tools.
Dresner's survey underscores the dichotomy between the generally conservative comportment of IT departments on the one hand and the more aggressive preferences of business buyers.
Dresner Advisory Services breaks the BI vendor market down into three segments: Titans, Established Pure-Plays, and Emerging Vendors.
IT organizations across all industries and geographies as well as larger shops tend to have a preference for vendors in the former two categories. "In contrast," Dresner writes, "Emerging vendors … are favored by smaller organizations and business users."
Such players -- with the exceptions of open source and non-U.S. based ISVs -- are predominantly based on North America, he points out.
Elsewhere, Dresner Advisory Services finds, the influence of IT on BI buying and deployment patterns is diminishing -- in North America, at any rate. The researcher points to an "inflection point" in just the last two years during which individual business domains (e.g., sales and marketing, finance, or research and development) started adopting BI technologies independently of input from IT.
The reverse seems to be the case outside of North America, however. In non-North American locales, in fact, "it would appear that the IT Department has expanded its dominance of BI," Dresner writes.
A Closer Look
BI adoption also isn't as monolithic as it might at first glance appear.
Although large shops tend to have the biggest BI deployments -- and likewise tend to partner with bigger, more established players -- smaller BI implementations, consisting of best-of-breed offerings, point solutions, and ad hoc tools -- nonetheless exist in almost all large shops.
Such tools aren't pushed as top-down standards -- or tapped for use as part of company-wide initiatives -- but are widely used on a divisional, departmental, or individual basis, Dresner notes.
For this reason, small and large shops alike tend to use a mix of BI tools, in spite of the best efforts of the big suite players -- viz., IBM Corp., Oracle Corp., and SAP AG -- which have extolled the virtues of BI tools standardization. Although such efforts might make sense from an IT perspective, they are less popular with business users.
"It's quite common for larger organizations to have many smaller mplementations and tools throughout the enterprise. Historically, this has been the way that BI products were sold -- to the business users and management," Dresner writes. "For a period of time this shifted, with vendors increasingly selling jointly to IT Departments and business users. This trend may be swinging back in favor of selling to the business user. This will serve to increase the numbers of discrete tools within larger organizations.
Tactical, Not Strategic
Dresner flags a related trend that suggests a possible "paradigm shift" in BI buying patterns.
"When we begin to look at BI implementations globally, over time, we see what might represent a paradigm shift in the industry -- away from large implementations and in favor of smaller or moderately-sized ones," he writes.
Dresner Advisory Services suggests several possible explanations for this trend, starting with the growing power and influence of business users, who tend to "focus on departmental (parochial) problems and … purchase solutions for smaller groups or individuals."
Other causes include fresh uptake of BI tools by new adopters in established markets or by companies in under-served or emerging geographies.
Today, certainly more so than a decade ago, BI practices aren't nearly so difficult to build up or deploy. Dresner says that more than 40 percent of new BI deployments are undertaken by new adopters, some of them in emerging geographies. Such efforts will tend to start small, the researcher notes.
Crowds and Power
Not only do business users have more of a say in BI buying plans, they're increasingly likely to adopt and in some cases deploy BI tools without first soliciting IT's approval. This trend has likewise encouraged ISVs to rethink the ways in which they develop, license, and market their software.
The growing influence of business users in the BI buying stakes is what Dresner calls (per his survey's title) the "Wisdom of the Crowd."
Crowds don't always behave rationally, however. In fact, crowds aren't typically associated with wisdom, though the crowd in and of itself doesn't have to be a bad thing. If Dresner, for example, made his name as a BI visionary, author Elias Canetti made his name -- and won his Nobel Prize -- largely on the strength of a single book, Crowds and Power. Canetti, then, knows crowds.
One of his important insights is that there are different kinds of crowds -- e.g., open crowds, closed crowds, stagnating crowds, and so on. Open crowds, for example, are alert to the possibility of continuous, uninterrupted growth -- i.e., of change. Closed crowds, on the other hand, are willing to trade growth for stability. For most of its existence, IT has been a closed crowd.
If Dresner's conclusions are correct, however, IT needs to become more proactive, more responsive, more solicitous -- in short, IT needs to become an open crowd. If it doesn't, it runs the risk of becoming irrelevant.
"It is the aware and astute organization that will assess changes in the market and plan and execute accordingly," Dresner concludes.