Business intelligence is one of the few areas in the IT
sector to have remained buoyant during the economic downturn, as
organisations use the technology to help them reduce costs and
optimise operations.
"At a time when there is a tendency to cut costs
indiscriminately, smarter companies are using business intelligence
tools to help them weather the turbulence," says Helena Schwenk,
senior analyst with Ovum's software division.
Business intelligence has moved into a new phase over the past
couple of years, offering tools for everything from better supply
chain performance to more incisive sales and marketing campaigns,
sophisticated HR management and better overall efficiency.
A few years ago, ascribing these capabilities to business
intelligence systems would have been considered a little far
fetched. In the early days of the technology virtually all
information was historical, structured data, such as spreadsheets
and databases, meaning that the "intelligence" part of business
intelligence was retrospective.
Unstructured data
Analysts estimate that structured data now makes up only about
20% of most organisations' internal data pools. The other 80% is
unstructured data emanating from digital communications and the
web, as well as things like customer loyalty cards.
A growing number of products are available to help organisations
squeeze value from these vast and rich repositories of information,
and to match them against existing historical data to help
companies create a more immediate picture of their business,
markets and customers and predict the future with more
confidence.
Among these is 3D visualisation, which is proving to be
effective especially in helping large organisations such as
transport authorities and councils identify and remedy
inefficiencies.
Business intelligence software is also evolving to make it
easier for businesses to match their own data with external
sources. Credit checks are one example where this can be
useful.
"Don't just use your internal data but look at what you can use
from the outside world to assess risk," says Nick Millman, senior
director for information management services at Accenture.
British Airways
Airlines have been hit especially hard by the recession, and
spending has been slashed across the board. However, when British
Airways cut its IT spend by a third earlier this year, business
intelligence was one area spared the broom.
The airline uses business intelligence technology from Silicon
Valley spend management specialist Ariba, which it says has led to
significant savings. BA also attributed the streamlining of direct
marketing campaigns and the recent thwarting of a fraud involving
bogus travel agents to business intelligence software.
Risk management
Risk management is one of the biggest drivers for business
intelligence. A survey in December 2008 of 250 senior executives in
the UK found that 40% of business decisions are made on judgement
alone, but 60% are made based on business data.
"Business intelligence tools are becoming more analytic, more
forward looking," says Millman.
"Organisations are building predictive models, reflecting the
fact that management teams are becoming less comfortable making
decisions on gut feel and want data to back them up."
Business intelligence is playing a bigger role in areas such as
human resources; for instance, enabling companies to identify
strengths and weaknesses among staff. Concerned about an exodus
among its senior ranks, Google developed an algorithm it says will
help it predict when staff might be thinking of leaving, possibly
before they know themselves.
Call centres
But business intelligence tools are no longer the exclusive
domain of managers and key decision makers, rather they are being
more widely dispersed throughout organisations. In call centres,
for instance, this has led to an improvement in customer service as
more information means fewer questions and faster responses.
"Knowing about your customer when they are on the phone with you
is more valuable than waiting until you get the monthly report,"
says Millman.
The emergence of SOA (service oriented architecture) products
incorporating business intelligence, as well as the growth of open
source platforms, has encouraged wider use of business intelligence
tools, enabling staff at all levels to make more informed
decisions.
"Business intelligence is designed to support the decision
making process," says Schwenk. "Properly used and implemented it
can help companies weather the economic storm."