The World's Most Important Gathering of
CIOs and Senior IT Executives
21 - 25 October 2012   Orlando, Florida

The Smart Approach to BI

An interview with Bill Hostmann, Vice President and Distinguished Analyst

As the flow of unstructured information grows in volume and intensity, even those organizations with a BI stake in the ground are struggling to understand the impact of shifting data patterns, and deliver on an increased demand for transparency and improved data quality. Still others are trying to bring order to their data chaos to eliminate the “white spaces” that prohibit a common view of the enterprise and negatively impact cohesive, collaborative decision making.

Sound familiar? Learn what one Gartner BI expert has to say about these challenges and opportunities that every business intelligence stakeholder faces.

Q. What is the current state of business intelligence?

A. BI has been what I call a “Lego Kit,” where you had to go out and buy from different vendors and put it together in a multi-tiered stack of fairly complicated, expensive technology. As a result, it was complex for developers as well as users, so you’ve got a fairly low penetration rate in terms of the adoption – a lot of organizations are in the mid- 20% of the potential population who have access to information and analysis in making decisions and managing performance. That’s a problem. There’s a really clear need for people to have line of sight into performance and the information that they need, yet the tools and technologies have been fairly complex, were multi-vendor, and required some fairly sophisticated development skills to go after them.

Now, that doesn’t mean that the demand goes away. If anything, demand is increasing, because organizations are reaching further outside their firewalls, and developing new relationships with customers as partners--and mining information from the outside the firewall; it’s really a brave new world of information out there. The need for information and analysis-- and to achieve an understanding of what impact these patterns might have on your business— has never been more evident than now.

Q. How have BI initiatives changed in the last 12 months?

A. We’re seeing that people are readjusting their strategies and recalibrating their performance measures; that they want to have performance measures that span broader swaths of their organization and have a greater ability to report and analyze those measures. The volumes of information now are huge, and the patterns are different than they were before the economic crisis. You have regulatory issues as well, lots of different government and professional societies want reporting. Even from a financial perspective, people want more transparency, so you’re really getting this need from all angles.

And there are different levels of BI maturity. Some companies are still down at the information “chaos” or “anarchy” level, whereas others may have made the investment in a point solution, on a departmental level, and want to figure out how to take it to the next level. Their problem is that there isn’t any kind of connection between departments or applications; there are no standards in terms of definitions or rules. The third, and highest, level of maturity is where standards are put in place. They start to develop best practices, development, deployments and support-- and begin to achieve an economy of scale out of their BI investments.

Q. Does business size affect the need for and value of BI?

A. It’s really less about size than about how information-centric each organization is. If you are small financial investment firm or insurance brokerage, for example, where your primary business is information, you have a lot of “thinkers and deciders” who are looking at that information, so you need to have some pretty sophisticated tools, technologies and standards in place across the organization in order to do your work. On the other hand, there are huge companies, such as a timber products company, for example, that are not heavily information-centric, so they will have a fairly small BI initiative, and can tolerate a low level of maturity.

Q. What BI issues are people struggling with most today?

A. People are struggling with the “white spaces” in the organization, by which I mean that, typically, different business units see things differently, different ways of making decisions, and use different processes, definitions, terminologies and descriptions—all of which should be shared. Bringing the business together in order to manage the business together can be a challenge sometimes. For example, what is the definition of a customer? You’d be surprised how much controversy that can raise, especially in complex or indirect sales channels. Organizations have a lot of white spaces— spaces between how finance, sales, manufacturing, Research & Development, looks at the business, for example—and they need to develop a common view as business processes cut across these different functional areas. You have to create a common vocabulary for how they’re going to calculate and present this information, so they have consistency, relevancy and accuracy. It’s very much a program management issue that, in the end, is more about people than technology.

Q. What do you see on the horizon for BI?

A. I think we’re going to start to see an emergence of BI tools that are easier to use– tools that give people better visual representations of fairly complex sets of information, as well as more specialized databases and appliances that make it easier to look at and use that information. We’ve had all kinds of new information types being thrown into organizations that are non-traditional data types – including audio, Power Point, customer call center records and web click stream logs. Now, there are huge volumes of unstructured information—without the rigor of a sequel structure and database model associated with it-- coming into the organization that need to be analyzed and used. People need tools to organize, parse and offer access to information in an easy-to-consume way that doesn’t have to fit into a traditionally structured database.

Q. What are some of the challenges that lie ahead in the BI space?

A. Now that we’re seeing that analysis is the priority, we need to design specialty systems that can handle data for analytical purposes rather than transactional ones. And, as people move up the maturity curve, they realize there are other issues they need to address, such as data quality. They’re asking themselves how to put policies and processes into place that deal with data quality more effectively; they’re wondering how they go back and fix things in the source system, which is really starts to be about governance.

The other issue that’s emerging is how to manage BI applications and technology as a portfolio. There may be multiple applications inside a company that are from different vendors, and on different technology platforms. How do you architect a solution that leverages what you have and fits within a solution portfolio. Companies did this really well with their business applications, but they haven’t done it equally as well with their BI applications. It’s really just starting to become a driving force in the minds of IT leaders. They’re realizing that they can’t just grab the technology; they also have to grab the architecture and the implemented solution portfolio and manage it as a portfolio rather than just a bunch of tools.