Research firm Gartner defines the BI lifecycle as three distinct stages: organising, cleansing, and collecting data; delivering that data in a consistent and appropriate form; and using that data for effective decision-making. It is at the last stage where things are still falling down. Most companies still fail to link BI to "the last mile" of business decision-making, which means all that investment in BI technologies is going to waste.
"Despite unprecedented information availability, several imperfect decisions were made in both public and private sectors in the past decade," notes Gartner analyst Kurt Schlegel. "It is not enough to provide voluminous access to information and expect good decisions to be made as a result."
An intelligent investment
Yet BI spending continues to grow, according to Gartner's client research. A poll of 1,500 CIOs worldwide at the start of this year revealed that the top spending priority, at a time of essentially flat budgets, was BI. And the trend seems set to continue.
So where is the money going? The number of big league BI suppliers is shrinking through consolidation, with SAP acquiring Business Objects, Oracle acquiring Hyperion, and IBM acquiring Cognos, and the enterprise applications suppliers that CIOs know and trust for ERP and CRM have added BI functionality to their portfolios.
This means that some five suppliers account for nearly two-thirds of the market. Based on Gartner's figures, SAP/Business Objects leads the BI pack with 24% of the market, followed by SAS Institute and Oracle, each with 14.6% of the market, IBM/Cognos racks up 11.3% and Microsoft 7.7%. This has come at the cost of slower growth and smaller market share for independent BI suppliers, although firms such as Microstrategy, Information Builders, SPSS and Actuate continue to have a profile in the sector.
What's on offer
For the BI technology buyer, what this leads to is an interesting tension in the market: do you go to the one-stop applications shop for your BI along with your ERP and your CRM and so on, or do you go to a smaller specialist firm? The former might boast an integrated stack offering and a degree of financial stability and longevity that smaller firms cannot offer; the latter might offer a more focused, deeper expertise in the specific area of BI and analytics.
The gap between the two ends of the scale are becoming more marked, as are the messages from the suppliers. SAP, for example, wants to pitch its BI offerings as an integrated part of its wider portfolio and extend the functionality to line of business people, not just BI experts.
"You cannot eliminate risk entirely. Any question about the future has a degree of risk attached. It is just a question of how much risk you have. If you can link your BI systems with your execution systems, you can at least take corrective action. The more people who are willing to do this, the more transparency there can be and the more we can manage systemic risk. When you see what has gone on over the past year [in the economy], I think we can put to bed any question of whether IT still matters. Everything that has happened in the economy would not have happened if IT had been used in a different manner."
Specialist knowledge
But such pronouncements from a broad-based enterprise applications player which happens to have added BI to its arsenal do not impress the smaller BI specialists, which are adamant that not only does size not matter, but it may further complicate an already over-complicated market.
Anthony Deighton, senior vice-president product marketing at QlikView, says, "SAP tells buyers it has 'the biggest, deepest, most intergalactic stack of software'. Well, we don't. I want them to sing from my hymn book, which is about simplicity. SAP's BI iTunes angle is a nice idea, but the reality does not live up to the marketing. Users do not want all that, they just want it to be easier to use. What the enterprise software suppliers do is expose the complexity."
But SAP has marketing clout and brand presence that the likes of Qlikview cannot even begin to dream of at present - surely that must prevail in a market that has seen such rapid and extensive consolidation? No problem, argues Deighton, the proof of the pudding is in the eating, not the marketing.
"Our sales process is all about showing people their data in QlikView. We let them explore it themselves," he says. "It is not a traditionally competitive battle, it is about changing the dimension of competition. There is a difference between bravado and sales. If you want a simple answer, we can do it for you. If you want complex solutions that need intergalactic visions, then you go to SAP."
Big name, safe choice
Nonetheless, in an age of constrained spending and tightening budgets, many organisations will veer instinctively to the "safe pair of hands". It is the modern update of not getting sacked for buying IBM: add Oracle, SAP and Microsoft to the list and you have a shortlist for BI procurement that most organisations would be able to live with.
To that end, expect to see the other enterprise giants making ever more pronounced BI plays as a competitive differentiator. For example, Microsoft's Gemini and Madison initiatives are extensions to a BI strategy that already includes self-service analytics based on Excel and data warehousing options through its DATAllegro acquisition. "BI is something that we take very seriously," declares Guy Weismantel, Microsoft's BI marketing director. "By no means are we pulling back. We are in this to win."
Making BI succeed
But then so are all the other major players - which takes us back to IBM's findings about how poor a track record organisations have in using this technology. The question must be, if BI is to remain a long-term major play for the software industry big hitters, what will they offer to address the shortcomings highlighted by IBM?
Expect to see technological innovations, of course, such as a move by BI vendors into cloud computing or the emergence of packaged solutions that can offer can address pre-defined problems. But it may be more about a change of focus than the introduction of new technology for technology's sake.
"We have seen a 20-year investment in applications that automate business processes; we see the next wave as investment in applications that optimise processes and take the value of investment in data to drive better decision-making," says Rob Ashe, general manager, business intelligence and performance management at IBM.
"This is not a new problem we are trying to solve, but we are constantly seeing new capabilities that make it more understandable and faster and easier to do. Right now, we are at the intersection of a number of new trends and capabilities that will fuel the growth of this whole area," he says.