Cutting corners to trouble?

Along with virtualisation, storage and the judicious adoption of open source, business intelligence is a technology that should see growth in tough times. During a boom, mistakes are easy to cover over with buoyant results. But there are few places to hide during a bust. A poor stock decision or bad investment now will almost certainly be ruthlessly exposed before too long.

More than ever, companies should be using BI to see where the value is, and where they could cut costs or where they could expand. But surprisingly, many companies are slashing BI spend as part of a wider approach to IT cost-cutting.

Martin Rennhackkamp, COO of Prescient Business Technologies, says he's seen companies in the financial services industry cutting back on BI. "I think it's crazy. BI projects are what provide the information that allows people to make crucial decisions right now: what do we invest in? What don't we invest in? And the excuse given is to cut costs."

The customers that have BI well entrenched already are spending more.

Julian Field, MD, KID

Gerhard Moolman, MD of RedMan Technologies, agrees. "If you have to make informed decisions about capital spending, then what do you use to find out? Business intelligence. I think if you cut back on BI now, it's easy to make the wrong decision."

Yolande Komen, BI consultant at Accenture, says she's seen a mix of attitudes. "Some customers in the financial services sector have cut back, but there are others in that market who are picking up," she says. "Retailers are a mixed bag. Shoprite is doing very well, but there are others that have been experiencing cutbacks. There have also been significantly large global projects starting off at the moment that are all very much about BI, master data management and analytics."

What isn't in doubt is that companies are re-evaluating their approaches to BI with the kind of urgency that a recession brings. Julian Field, MD of Knowledge Integration Dynamics, says new projects and ones that haven't progressed beyond the initial analysis are the ones being canned.

"Projects that have just started or perhaps are still in the scoping phase are the ones that are being put on hold or cancelled," he points out. "The customers that have BI well entrenched already are spending more."

Laurianne Stamer, product manager, business intelligence, at Fujitsu, also says she is seeing cutbacks in new implementations but not in entrenched situations. "In companies where they already have BI and it's become part of the fabric of what they do, we're seeing more spend. It gives you a competitive advantage."

Why aren't my top products selling this year? It's a basic BI question.

Davide Hanan, MD, QlickView

Davide Hanan, MD of QlickView South Africa, agrees that there is considerable advantage to intelligence that works. "When conditions are tough, you need to be able to analyse your business in detail and you need responses very quickly. IT guys can't come back in four months' time - you need to answer the question in four days. With speed comes cost reduction as well. People don't want to spend time and money, and they don't want to have huge projects. They want to be able to investigate the problem, analyse it and move on."

BI has also come under the spotlight as companies consolidate the tools and technologies they have installed to save money. Accenture's Komen says consolidation has been ongoing.

"Customers are having a look at what technologies they currently have, where they can consolidate them and what shelfware they can get rid of. It's not just the vendors that are consolidating, but also within the customer base. And that trend has been going on for a number of years now."

Frances Jordaan, channel manager at Edge Channel, says replacement strategies have been successful for Edge. "It's because we're saving the customer money in the long-term. They're looking for tools to replace existing technologies, but also installing new technologies. They might not be planning on cutting in BI as a whole."

BI is particularly prone to the shelfware malaise: a department buys a quick solution, and then decides it doesn't really need it or that it would be too much trouble to implement. Filip Vanden Houte of MCi Consulting says it is a cyclical phenomenon. "What we find with shelfware products that come and go is that people have had departmental problems and they've implemented a solution to circumvent the IT roadmap. You end up with this ongoing cyclical introduction and elimination of small packages."

That can put pressure on vendors to be able to supply quick answers, explains Merlin Knott, country manager of Microstrategy. "The large enterprises that need to be flexible go and buy particular niche products and implement them on a departmental level. It wouldn't be part of the overall strategy and it leads to islands of information. Then they have to consolidate. If customers have a need that requires an immediate fix, if you aren't flexible enough as a vendor to offer something like that, they will go somewhere else. So as a purveyor of BI, you'd better make it part of your stack to have a flexible solution, otherwise they'll spend somewhere else. People have bought quick fixes and are now at a point where they have no flexibility so they will look to consolidate."

Sometimes, the software isn't even being used at all. Rennhackkamp says this has unexpected benefits when it's dusted off and finally put to the use for which it was originally purchased.

"In a lot of cases, BI software has been on the shelf for some time, and the company has been paying licence and maintenance fees without getting business value out of it. Now is a good time to get some return quickly, and the nice thing about pressure for quick ROI is that customers are putting lean and sleek BI architectures in place. It's not five layers of data getting copied all over the place. They don't have time for that."

Indeed, the quick fix is becoming the new way to sell business intelligence solutions, but without the disadvantages of later retrofitting it into an existing roadmap.

Keith Jones, MD of Harvey Jones, says customers want quick fixes but don't want them straight away, citing the proverb that there's nothing so permanent as a temporary fix.

"There is a way you can do quick fixes without throwing solutions in the bin in the long-term," he says. "It's the new way of selling BI, in fact. The latest solutions can do multiple data sources from different places. Businesses are buying the dream that we've been selling for 10 years now, but they need to wake up and realise that there is a whole process you need to go through."

Jones says the conversation can - and should - be vendor-agnostic. "The conversation shouldn't be about whether to use Oracle or SAP or Microsoft or IBM - everyone can do the job - but rather it should be how we can take 3% off a customer's bottom line. That's where the value lies now; it's taking all the stuff we've been selling and turning it into a business conversation."

I think if you cut back on BI now, it's easy to make the wrong decision.

Gerhard Moolman, MD, RedMan Technologies

Could BI tools themselves be improved further? Business applications are traditionally staid pieces of work with little flashiness, used by employees who have to, and supported by vendors with little direct interaction with their users.

Steven Cohen, MD of Softline Pastel, says as a development company that owns its own code, he's running out of things to put in it. "We develop our own software and we're actually running out of new things to do. I think we're irritating our users by putting too much complexity into our products. I've given instructions to my developers to work on the UI and make it easy to use. The underlying stuff works. It's the interface that still has a way to go."

Peter Oeschger, CTO of Knowledge Factory, says the next generation of BI solutions will have a strong element of visualisation. "Since people think in pictures, instead of a town council having to look at thousands of names, it's easier to show them a map of South Africa or the area they want to look at. They want to be able to see data and make a decision quickly. It's the added layers that you put on top of maps that are invaluable. We have retail clients where we do analytics for them that tell them exactly where to open outlets. We can pull in census, deeds transfer, traffic information and more and overlay it on the map data. That will be the next wave of BI: adding all of that spatial information to an existing BI solution."

Time is a major constraint of all complex projects, but particularly in a downturn when errors can mean the difference between staying in business and going bankrupt. The new attitude towards any software implementation in 2009 - not just BI - is going to be defined by how quickly business value can be realised.

If that means dusting off the BI tools that were bought on a whim two years ago and getting them working, then so be it. If it means buying a quick-fix solution in order to make sense of the next six months of trading, then companies need not feel too guilty: everyone else will be doing it too. But cutting BI out of the decision-making altogether is crazy. As Hanan says, it's too basic to be ignored. "What are the top customers? What are the top products? Why aren't they selling this year? It's a basic question. In IT we love to make it complicated, but it isn't really."