First of all, let me be clear that I am leery of acronyms positioned as silver bullets. Business Intelligence (BI), like Service Oriented Architecture (SOA), Business Process Management (BPM), is a dimension of effective IT strategy, but must be considered within the totality of architecture. Acronyms have a way of becoming impotent when pursued as individual panaceas.
OK, now that that’s out of the way, let’s consider the drivers for BI, and explore why it is top of mind for many executives in 2009.
2009 is likely to be one of the most challenging years for global business ever. Certainly, the continuously degrading economic situation in 2008 was a warm-up act. CIOs and their peers are searching for ways to constrain and reduce spending across the board, while their business partners are facing cuts north of 30%. This has stirred a wave of interest in cloud computing, software as a service (SaaS), data center consolidation, and virtualization: anything that reduces overhead. Enterprises are refocusing their efforts on core capabilities while examining alternatives for the non-core activities. Core capabilities are those that provide competitive differentiation to the business. Non-core, or context, capabilities are non-value added processes: commodity. The interest in externalized IT — the cloud and SaaS —reflects the desire to reduce internal maintenance costs and headaches. Expert external services are seductive.
This shift from core to context and the renewed focus on differentiation cannot be undertaken blindly. The desired result is a more efficient, cost effective business model that is well-tuned to respond quickly to external economic conditions. Some companies will be facing expanded regulations and compliance requirements, requiring surgical insight into their operations and transactions. The achievement of these goals is further complicated by an increasingly hybrid environment spanning internal and external IT.
The discipline of BI can help provide insight into operations during this period of evolution. Properly architected BI solutions use data in motion and data at rest to produce reports of varying detail. Ultimately, those reports enable business leaders to adjust processes in response to market conditions and opportunities. The big assumption, however, is that the information returned is correct and actionable. In most enterprises, there is a disconnect between data and information, suggesting that information management initiatives are intricately linked to effective BI. Out Data Management team writes extensively about information management: start here for more info.
The rush to externalize IT to cloud and SaaS solutions creates another problem. Once these solutions are in place, BI scenarios are forced to cross internal and external processes to provide end to end visibility. The opacity of external IT solutions may ultimately be a barrier to thorough BI. It is essential to choose external providers that can accommodate your BI needs and can integrate with BI solutions that you use.
Another issue that hinders holistic BI is that incompatible BI solutions are often packaged within purchased solutions. As a result, an enterprise may already own several BI tools from their major vendors. In this case, holistic BI may be accomplished either by finding ways to integrate across solutions using existing APIs. A more effective architecture may involve creating a XML-based BI overlay that can extract underlying BI output and roll it up into a unified view.
BI can provide valuable insight into your operations, allowing you to tune your business to external conditions. BI solutions, however, are not without architectural complexity and must be designed to provide actionable information from disparate systems.