Business Intelligence for SMB’s Part 4: What is Business Intelligence?

Business intelligence is not Technology, Products or a set of Methodologies. It is simply having an insightful understanding of an entity and its purpose, its past behaviors, present situation and desired destinations, and being able to make informed decisions which direct it towards those destinations.

The term BI was coined with its technology endeavors (and followed after other previous names such as Decision Support Systems), but if someone ran a business on paper and regularly analyzed, on paper, results against initiatives and drew conclusions based on these results this would be actionable Business Intelligence. Perhaps pen, paper and the analytical methods would be the “Technology Stack” in this scenario.

The ability to adjust for the future based on past trends is critical in any business, it’s kind of like animal evolution where those that adapt fastest survive and thrive. And the fact that strong trends generally exist in a business is what makes technology such a powerful ingredient in supporting this adaption, after all computers were made to compute and they thrive on trends.

To me what Business Intelligence is will never change, the technologies that support it always do and always will. Every couple of years the technology component of BI seems to take new areas and acronyms under its wing. If my memory serves me correct the “BI Stack” added these significant members to the family one by one over time: reporting, open data access standards (SQL and ODBC), data warehousing, ETL tools, cubes and OLAP, alert based reporting, data mining and in memory engines. More will arrive, some will join the family and some will not but the umbrella will continue to widen.

Looking back at the history of BI and the pioneering companies and individuals that guided it to today would make for quite a read, but if I had to pick one event of significance that changed the game forever it would be acquisition of the mega BI vendors by the mega ERP vendors in the second half of the last decade. ERP vendors reflected on what the market had known for years. Most of these systems had been designed wonderfully for getting data in with data out and insightful analysis there of lagging far behind.

ERP mega vendors swallowed up the mega BI Vendors in a feeding frenzy. Customers finally could buy a system which had it all. So was BI just a transient term to give the an area of deficiencies in ERP systems a home? Certainly this is quite a radical notion, but perhaps not all that far-fetched…

This consolidation in the market resulted in the top BI technologies being vendor owned. And in the competitive world of ERP vendors what once were ERP independent BI stacks suddenly became politically taboo to ERP competitors. Where for example Business Objects would have been an easy sell to any large organization with sophisticated BI requirements it is likely to increasingly find its market place being a SAP only world. Microsoft’s shutting down FRx and making the call to make it’s successor, Management Reporter, available only to its own ERP products is another example of closing out BI capabilities to its competitors in the interest of trying to attract more customers to its ERP offerings.

But rather than this event curtailing the ongoing innovation in BI it resulted in a healthy emergence of smaller vendors and ideas. A war between a massive number of emergent upstarts fighting for leadership positions is driving innovation. So right now technology is driving a lot of where these vendors are going. But I believe vendors would be wise to make sure their strategy is based on a balanced base of technology and current business need. In our world’s current economic state innovation needs to be self-funding.

Take the buzz of the last few years around SAAS. It’s nothing new, the original incarnation in the late 90s was called ASP (Application Server Providers). SAAS is a new name to escape the crimes of the ASP heist that contributed largely to the DOT BOMB. The technology hype resulted in investors paying exorbitant amounts for technology sake and zero business value.

And now BI Vendors are clamoring their way into the Cloud. I read an article last week that stated that currently less than 1% of BI customers were using Cloud based solutions. Although it will get there it is still a mighty “chasm to cross”. In business there is something I heard once that has never left me, “Fish where the fish are”.

What does it all mean to Customers, Resellers, Vendors and Consultants though?

Customers will continue to expect ERP systems which are not deficient in delivering powerful decision support information. ERP and BI vendors have agreed that the acquisition and bundling, as opposed to the building, of BI technologies into ERP is the fastest route to customer’s satisfaction and retention and pervasive BI adoption. Resellers of ERP have an improved holistic business experience to sell. Consultants? Well that won’t change, the BI stacks and the tools that they use to generate revenue will remain in place even if they are bundled into the ERP systems.