Corporate Performance Management to grow from 10 percent in 2002 to 40 percent by 2005 Plan With Caution - Real Time Use of Business Intelligence is Over Hyped
Egham, 23 January 2003 — Speaking ahead of its annual Business Intelligence conference in Amsterdam, Gartner today said Business Intelligence vendors are consolidating and expanding their product lines as part of an aggressive strategy to capture European market share, expected to grow moderately by 7 percent in 2003. Gartner said European enterprises will buy into a new business discipline called Corporate Performance Management (CPM), believing it will provide immediate functionality in problem solving, monitoring and managing business performance. Adoption of CPM tools by European companies is expected to grow from 10 percent at the end of 2002 to 40 percent by 2005.
Gartner said CPM will become a business imperative, as a result of increased pressure for corporate transparency, new accounting principles and ever increasing data volumes. In addition, business executives are becoming legally responsible for the quality of the external reporting creating strong incentives to invest in CPM. Gartner said that an advanced real-time Business Intelligence application is the future, however in reality, today's functionality is rather limited.
"CPM products will be on the 'shopping lists' of many large enterprises as their planning and control cycle is breaking up, a trend that vendors have not missed," said Frank Buytendijk, research director for Gartner. "However, companies should start simply reutilising existing software instead of buying into a lot of new technology."
Buytendijk said, ""CPM is also part of what Gartner terms the next big strategy shift. Companies are eager to operate in a real-time environment and are looking towards technology to do so. He stressed, "The industry is still at the 'crawling stage' and both industry and end user will need to learn how to walk before being able to run, however, the effective adoption of CPM is part of the solution to help enterprises evolve into a Real-Time Enterprise."
What to do to prepare for Business Intelligence — a tough reality
Despite increasing need for Business Intelligence and vendor claims about 'the next big thing', Gartner said enterprises will continue to struggle to solve even the most basic Business Intelligence problems in 2003, including querying and reporting. At least 50 percent of the Business Intelligence programmes implemented will not reach full potential or experience absolute failure.
"Successful enterprises will go through the difficult process of identifying how to define performance metrics against key strategic and tactical business objectives, and how to link the outcomes of those metrics to the processes that can change business behavior and improve overall performance," Buytendijk commented. "Success is not only having the right software, but having the right skills in deciding which metrics are important and which are not."
'Business stupidity' — avoiding toxic data
Gartner advised end users that lack of skills is one of the main reasons why Business Intelligence projects fail. Gartner predicts companies not investing in forming a Business Intelligence competency centre, have an 80 percent chance its initiatives will fail to meet strategic business objectives. The competency centre will make users self reliant, ensure consistency, coordinate use and reuse of business metadata, and prevent what Gartner calls 'toxic data'.
Gartner predicts 50 percent of companies will not make the effort to ensure data quality due to sheer ignorance of how to implement, or deliberate avoidance of, a complex and expensive set of initiatives.
Buytendijk comments. "Failures through 2006 will continue to occur because companies just don't tackle the basic issue of data quality. Focusing on expedient methods for accessing data and presenting it, rather than ensuring its accuracy will lead to a lower 'enterprise IQ' or 'business stupidity' — the antithesis of Business Intelligence."
What are differences between Europe versus the US?
According to a Gartner survey, Europe today lags North America in adoption of Business Intelligence software with 53 percent using Business Intelligence compared to 80 percent in North America. However, the penetration of Business Intelligence within European companies is much higher than in the US. In the companies surveyed, 43 percent of the employees in Europe have access to Business Intelligence software compared to 26 percent in North America.
The survey also found that North American companies primarily look to Business Intelligence for process improvements rather than impact on profit and loss, the key driver for Business Intelligence in Europe. This will potentially give European businesses a higher degree of insight and competitive advantage over their US counterparts.
About the conference
For more information about Gartner's Business Intelligence Conference 2003 to be held at Okura Hotel in Amsterdam 3-4 February and the full agenda or to register for the conference, please visit www.europe.gartner.com/bi or contact Carina Swedemyr on + 46 624 6324, email: carina.swedemyr@gartner.com.
About Gartner:
Gartner, Inc. is the leading provider of
research and analysis on the global information technology industry. Gartner serves more
than 10,000 clients, including chief information officers and other senior IT executives
in corporations and government agencies, as well as technology companies and the
investment community. The Company focuses on delivering objective, in-depth analysis
and actionable advice to enable clients to make more informed business and technology
decisions. The Company's businesses consist of Gartner Intelligence, research and
events for IT professionals; Gartner Executive Programs, membership programs and peer
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Stamford, Connecticut, and has 3,700 associates, including more than 1,000 research
analysts and consultants, in more than 75 locations worldwide. For more information,
visit www.gartner.com.
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