Oracle buys Hyperion. Microsoft buys ProClarity. Enterprise resource planning (ERP) companies seem to be bracing for the business intelligence (BI) invasion. Present at an ITWeb round table to answer some questions were:
Sean Wainer, MicroStrategy country manager; Carel Badenhorst, SAS Institute BI product manager; Gary Broomberg, Business Objects SA country manager; Charl Barnard, Knowledge Integration Dynamics; Nitesh Vallabh, PBT Group director; Gary Boddington, Alchemex Reporting Solutions MD; Estelle de Beer, practice manager, BI Practice; Jean Moncrieff, Emerge Africa CEO; Bruce Nicholson, i5 CIO; David Greenleaf, Ability Solutions commercial director; Anthony Vieria, Syspro BI specialist; Colleen Rose, Smollan Group IT director; David MacWilliam, Cognos SA MD; Schalk Roelofse, GM of BI & Information Management CoE, eCom Institute; Yolanda Komen, Intellient BI manager; Keith Jones, Harvey Jones Systems MD; and Sarah Gibbons, Bytes Technology Group.
Below is an edited version of some of the discussion points.
ITWeb: What is happening with current vendor consolidation?
Jones: It's the nature of the market at the moment. It's consolidating in terms of specific verticals and people are pooling their knowledge and IP.
Wainer: There are fewer competitors in the space and there will be more consolidations, no question. A big part of Oracle buying Hyperion was to get the financial management and consolidation tool. It needed that because it was missing from the Oracle stack.
Gibbons: I think it confuses the market: one minute vendors are competing, the next they're together.
MacWilliam: Clearly the big ERP vendors have seen their sites being heavily invaded by the BI vendors and it's really in pursuit of revenue. They want their piece of the pie. Oracle doesn't like BI vendors in its sites and that's been a large driver. The fact is that it was too hard to do it themselves, so they paid [for Hyperion].
Vallabh: I don't think it's vendor consolidation in as much as it's actually product consolidation. The concern I have revolves around the integration of products. That always seems to get ignored. If a vendor you're dealing with gets bought, then you need to say: "Show us the roadmap of how it will get integrated", otherwise it will fall flat.
Rose: That's true. For example, I find when products get integrated from a user's or purchaser's perspective, the licensing integration is an absolute nightmare. They project a wonderful view of an integrated product that addresses all your needs, but the licensing is still addressed to each little silo; that doesn't meet my need for an end-to-end solution.
Komen: That situation can favour the user: you should be able to negotiate a better contract with the vendor. If you have a full enterprise licence or end-to-end agreement, you should be able to dictate more. Some of our enterprise customers have a lot of say about what goes into a product, which they might not have if they have a little bit of one product and a little bit of another.
When vendor products get integrated... the licensing is an absolute nightmare.
Colleen Rose, IT director, Smollan Group
Badenhorst: A lot of our customers now realise that BI is very specific: you're going to do reporting or some analysis. Just the processing of that amount of data to be able to get the answer back quickly requires a special way of storing the data. ERP systems have a different way of storing data and the models are not optimised for BI. The vendor consolidation might be driven by acquisition - that vendor has something that I don't - but you can't duplicate one kind of ERP system to BI and expect it to work exactly the same.
ITWeb: Why BI and why not enterprise architecture or services-oriented architecture (SOA)?
Gibbons: Different people have a very different view of what SOA is. What is true SOA? Yes, it is another entry into the BI market, but do we understand what everyone means?
De Beer: In the past, BI projects were all about the reports they produced. What people missed maybe five or 10 years ago was that a BI solution was always an integration solution with a front-end. The integration solution was incomplete without the front-end and likewise the front-end was incomplete without a decent back-end. Because integration has now moved into the SOA space, it's also moved into the BI space. It's just a natural evolution of the maturity of the market.
ITWeb: Will the move to services in general and specialised outsourcing help or hinder BI?
MacWilliam: It helps enormously. The point of failure for many BI implementations was bad data and bad integration. Moving to services will make a lot of BI projects much easier.
Broomberg: I agree. It's much more complementary than competitive.
Vallabh: We need to make sure we understand the level at which a service is outsourced. If you take a supply chain and give it to someone else to run, the information is still a key asset of the company, and the business decisions that need to be made based on that information are still critical. What is outsourceable in the BI space? We've experimented with several clients and you get to a certain level and then they back off and say: "No, this is our data."
Rose: We found the link works the other way around too. We are using our data warehouse information to feed our services; it's clean and it's a single source of information.
Badenhorst: We've found you have to be very careful when outsourcing BI. There's always that divide between IT and business, and as soon as you outsource, that divide gets bigger and bigger. It's difficult to drive business intelligence when you don't have control over a business intelligence process.
Wainer: I agree. That's based around the fact that everyone's outsourcing their back-end data, but at the front-end, you still want control so you can have an easy user experience and can slice and dice the way you want.
It's difficult to drive BI when you don't have control over a BI process.
Carel Badenhorst, BI product manager, SAS Institute
Moncrieff: Coming from the process management environment, the intelligence across processes is becoming very important for our customers, especially when bits and pieces are outsourced. I think this notion of intelligence across a process is key, because we see silos starting to happen as vendors bring their own intelligent bits to various parts of it.
Nicholson: That comes back to consolidation though - whether it's Oracle or Microsoft across a site end-to-end - then at least there's predictability there for them to be able to follow business processes.
Vallabh: What's the general view of open source BI? The trend that we've been seeing is that companies selling customised business applications are taking open source code and integrating it into those applications. Once there's a foothold, you could see that trend starting to expand.
Gibbons: We've been dealing with a company that works a lot with open source. But once they get to a certain point, they have to move to a specialist vendor. It doesn't scale.
Wainer: Google is the ultimate open source organisation. It uses open hardware and open source operating systems wherever possible, but it still uses MicroSrategy because it can't match our 18 years of experience. These are 500 terabytes to 1 petabyte-sized chunks of data it has to deal with.
Boddington: To use an ERP example, they won't have the experience from a BI perspective to do the integration properly. It's not a case of "there's an open source option, let's stick it in". There are too many complications and permutations. It's too specialist.
ITWeb: What are current management attitudes towards BI? In the last round table, there was considerable discussion around the fact that many very large organisations seem to be flying blind or at least not putting in a BI solution when it would help them.
Vallabh: The symptom of that is the booming economy. Someone makes a gut-feel decision and says: "I will run a campaign to make me money. Why should I spend five days analysing data?"
MacWilliam: You don't ask CEOs whether they care about BI. You should be asking whether they care about regulatory compliance and proper forecasting and measurement. You won't find a CEO who's not interested in those things. How he gets there is generally someone else's problem, of course. CIOs have let them down traditionally, so they're turning increasingly to specialists and, interestingly enough, the financial officers. They're used to counting beans, so let's automate it and find you something interesting to do.
Nicholson: One of our customers is a bank, which has bought several smaller banks with different systems. It needs one consolidated report to deliver if it is to be in compliance with Basel II and Sarbanes-Oxley regulations.
The key is to make compliance profitable.
Gary Boddington, MD, Alchemex
De Beer: We did an integration project at one of the big medical hospital groups and compliance wasn't part of the project at all. But, when the auditors came in, they wanted to see where the data came from. The only place to which they could trace the source of all the data was the integration side of the BI implementation. So that assisted them in complying. There is awareness that where there isn't compliance yet, customers can still go and find the answers in a trail produced by a BI project.
Boddington: The key is to make compliance profitable. Instead of treating compliance as something that just has to be done, it can be approached with revenue in mind. It doesn't necessarily have to be compliance to legal requirements, but could be something internal such as the regulations of a franchise operation. BI can produce audit trails that assist franchise groups in keeping track of their franchisees.
Gibbons: Compliance can definitely be a side-effect of doing a BI project. You may not have thought of it as a primary reason for starting, but since you enable auditors and audit trails that would normally take six months to get organised, you get that benefit as well.
Everyone agrees that 2007 will be an exciting year for BI vendors, the uncertainty over some consolidation notwithstanding. BI's inroads into markets that have been traditional ERP strongholds, coupled with overall trends like the need for compliance and a strong uptake of services-based computing, bode well for those companies that sell BI solutions. If the vendors can get licensing and roadmap issues resolved to the satisfaction of the users, they'll clean up.
* Article first published on brainstorm.itweb.co.za
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