Magazine article Financial Management (UK)

Business Intelligence: Peter Simons Reports on the Latest Developments in the Fast-Moving BI Software Industry and Forecasts New Trends in Decision-Support Technology

Magazine article Financial Management (UK)

Business Intelligence: Peter Simons Reports on the Latest Developments in the Fast-Moving BI Software Industry and Forecasts New Trends in Decision-Support Technology

Article excerpt

The typical business intelligence (BI) architecture can be seen as having a stack of layers. The base usually comprises source data systems, from where data is processed by "extract, transform, load" (ETL) software into a data warehouse. Above that are the BI and application layers and then at the top there is the presentation or delivery layer, which can include executive dashboards, scorecards and other decision-making tools.

Software houses used to specialise in making applications for these different layers, which meant that businesses would assemble their own stacks using independent suppliers. So a company might have an SAP enterprise resource planning (ERP) system that feeds into an Oracle data warehouse, for example, and the firm's finance department might use an application from Hyperion for reports and another from SAS for analytics.

As BI has evolved, the greatest challenge has been how to integrate data on different systems accumulated from different vendors over many years. This challenge is being addressed in the following key ways:

* "Service-oriented architecture" (SOA) has been developed as a solution that eliminates the need for point-to-point connections between resources. It provides access to data in legacy systems through linked "services".

* ERP, ETL, data warehouse and customer relationship management (CRM) software vendors are now offering integrated BI applications. And BI vendors are adding ETL tools. Some brands span different layers of the BI stack (see diagram).

* The big vendors--IBM, Microsoft, Oracle and SAP--which already offered some BI solutions, have moved into performance management by acquisition. There has been a feeding frenzy (see "Who bought whom") and the big players are still digesting their prey. In future, they are likely to offer more integrated BI solutions.

BI and business performance management (or business analytics) used to be seen as separate applications, but the big vendors will integrate them. BI solutions have already become more accessible through web enablement and more applicable through the inclusion of a range of data sources and pre-defined business content. As Gartner puts it: "The data warehouse has evolved from an information store supporting the running of reports and ad-hoc queries into an analytics infrastructure repository."

BI has developed from reporting on data from an ERP source to include functions such as financial consolidation; activity-based costing; dashboards and scorecards; data mining, integration and warehousing; and "pervasive intelligence".

The BI industry is dynamic, with frequent announcements of new products, alliances and acquisitions. There are many vendors, but the biggest are as follows:

* SAP and Business Objects. Together these are the biggest players in the BI market. SAP is best known for its ERP system but it has been expanding into BI with the development of SAP Netweaver BI and SAP BI Accelerator and then its acquisitions of OutlookSoft and PeopleSoft. The acquisition of Business Objects in 2007 should give SAP a strong position in this market.

* Oracle and Hyperion. Oracle has built its reputation on database systems rather than ERR Hyperion is highly rated for its consolidation and financial accounting functionality. Siebel already provided Oracle with an analytics capability but the acquisition of Hyperion has added strength in the crucial area of financial planning tools. It is not yet clear how this will fit with other acquisitions.

* IBM and Cognos. IBM already had some BI capability with its DB2 product, but its strength lies in databases. Cognos, with its SOA and planning tools, should prove a valuable acquisition.

* Microsoft. Windows and MS Office may have achieved world domination, but Microsoft's BI offering is yet to be seen as providing the same depth as its specialist competitors' products. MS PowerPoint provides a complete BI stack, with MS Office as the top layer, so Microsoft could potentially bring BI to a wider audience. …

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