Successful businesses have always put a high value on the information they collect. This value is derived from analysing the patterns and trends that emerge from data.
A reliance on the intelligence gained from any insights can make a difference to margins or competitive differentiators.
And, for as long as there is a need to extract this business intelligence from IT systems, suppliers have been offering analytical software to enable users to drill down into data to find meaningful results.
Alongside this so-called data-mining, suppliers have also worked on simplifying how information derived from the data locked in IT systems is presented to the end-user. This has led to the development of intuitive graphical interfaces designed to help end-users make better sense of all the business data they are presented with.
The biggest single benefit of business intelligence is that it offers a holistic view of the business, although this can be hard to measure. Tangible benefits include making IT easier to focus on cost savings, revenue growth and consistency of information.
The more IT systems become critical to business, the more they are used within the decision making process. The worldwide business intelligence platform market size is testament to this demand from users.
Analyst firm Gartner is predicting a compound annual growth rate of 6.5% during the next five years, which means businesses will be buying £1.7bn of new licences by 2010.
But with so much choice, who should a large enterprise look to for business intelligence technology? And what differentiates the products in the market?
One of the most immediate problems for IT directors is that end-users may be running different business intelligence products at departmental level, for finance, supply chain and many other operational functions.
Bloor Research analyst Gerry Brown said, "Most firms say they have between six and 15 forms of business intelligence software. Many of the main suppliers have massive overlap between their customer bases."
The proliferation of different flavours of business intelligence technology used at departmental levels is an opportunity for IT directors to look at business intelligence consolidation.
"Businesses want one version of the truth. If you are buying enterprise scale business intelligence licences, you will want to know that investment will scale," Brown said.
To derive value from business data and get more out of your IT investment, a single corporate reporting function enables more widely accessible, manageable and ultimately meaningful intelligence.
Research from Bloor has found that smaller companies can offer users innovative approaches to business intelligence.
For instance, business intelligence software supplier QlikView's latest analytic tool is optimised for 64-bit technology.
Although 64-bit enables more calculations in the memory (as opposed to interrogating the server hard disc), it also means such nascent business intelligence suppliers present a challenge.
QlikView has more than 3,000 customers worldwide and its revenues grew 80% in 2005.
If exceptional speed of response is your main need, then an enterprise needs to make sure it runs on Microsoft, as QlikView is not yet ported onto Unix-based systems, like Sun Solaris for example, according to Bloor Research.
Beyond niche suppliers of specialist business intelligence tools, the majority of providers roughly fall into two camps.
There are products that enable a company either to buy a horizontal business intelligence platform, and those that take a layered approach, where the IT director builds or buys a suite of components that fit together.
Some suppliers are from a query and reporting background like Actuate, Cognos, MicroStrategy and Hyperion.
Another company taking this approach is JasperSoft, a supplier of open source business intelligence and reporting products integrated with JBoss application server products and MySQL databases. JasperSoft also offers off-the-shelf products.
The approach taken by enterprise IT suppliers such as SAP, SAS, IBM and Oracle, is to provide a business intelligence platform for their existing users - allowing them to take advantage of enterprise products already deployed within the end-user company.
This grouping also includes Microsoft, with its dominance in the relational and online analytical processing (Olap) database server space. According to the Olap Report produced by research group Business Intelligence, Microsoft Windows Server grew its share of this market from 75.7% to 84.7% last year.
Moreover, Microsoft's Excel spreadsheet, often the tool with which end-users gain their first experience of business intelligence, is due for a major revamp as part of the launch of Office 2007.
Renaud Besnard, product marketing manager responsible for Microsoft's SQL Server-based data management and business intelligence portfolio, said, "We look at our product stack as three different layers. The foundation is the data management platform, then comes the extract, transform and load layer.
"Once the data is aggregated and put into cubes, the information needs to be disseminated across the enterprise with reporting. There will be some very exciting developments in those last two layers over the next few months."
One of the areas of focus is Office 2007. It includes a new, extensible user interface, open XML formats, workflow and search features, and a business datawarehouse.
All this allows Microsoft to argue true enterprise business intelligence scalability and integrate the advanced analysis and visualisation technologies it gained with the acquisition of ProClarity in April.
Microsoft claims these new features will extend its Office and SQL Server investments.
Microsoft's strategy is to offer users a single product that can solve all a user's business intelligence requirements, to support both data-warehousing and transactional reports.
But in today's complex IT infrastructures, where strategies like business process management and SOA have increasing parts to play in providing timely, accurate, auditable and cost-effective data, there are some suppliers who argue that to think of a "box" is to set boundaries to integration, and challenge accuracy where sharing data.
Cognos, for instance, has re-engineered its business intelligence platform Win Cognos 8 to support web services, and is licensed based on the role of the end-user.
The web-services based architecture approach advocated by Cognos incorporates relational online analytical processing, peer-to-peer services, a common management layer and search capabilities powered by Google.
Others too, share this vision of moving the management of data out of the database and into the peer-to-peer systems used by an organisation to run its business.
US business process management supplier Tibco, for example, argues that aligning business intelligence with business process management removes a reliance on central databases, by democratising data with event-driven systems, rather than relying on constant polling for data.
Bloor Research predicts that business intelligence applications will increasingly become embedded into business processes.
Olap Report author Nigel Pendse pointed out that most of what is on offer in the market today may have a little way to go before achieving such functionality.
"It is a nice idea to be able to issue business intelligence queries using some kind of Google-type technology, but you would have to enable so many keywords that it would end up looking almost like SQL. The technology is just not sophisticated enough yet," he said.
He added, "No one business intelligence supplier is best at everything. Do not assume they all offer the same things. Some parts of an enterprise's IT may be working fine, so there is no point in any rip and replace.
"I think the suppliers that sell the standardisation message are in mortal danger from Microsoft, which has been a business intelligence supplier for some time. They are aiming the next version of Excel to be a better business intelligence client."
However, Pendse expects that suppliers such as SAP, Oracle and IBM would be the preferred choice for users running enterprise systems.
"Oracle and IBM are so deeply entrenched at CIO level. And these suppliers can bundle business intelligence products thrown in as sweeteners as part of larger deals."
When choosing business intelligence tools it is important to put independent, industry-driven knowledge and domain-specific advice above the technology itself.
"Pick a problem you actually have to solve first, and then shortlist products without talking to any salesmen. Do not be afraid of using more than one supplier.
"Use different consultants for the evaluation and deployment stages, as systems integrators often have strategic partnerships with these suppliers. And get business users involved from the beginning," Pendse advises.
Case study: How Graniterock is getting intelligent with lorries and quarries
US construction materials company Graniterock is making innovative use of business intelligence in combination with RFID to track trends and improve its customer service.
The construction company is using Business Objects reporting software to track inventory and supply movements through its quarries, in a bid to reduce the amount of time a lorry spends at the quarries.
Graniterock found that its information management needs grew exponentially after implementing an RFID tagging system.
Employees throughout the organisation – including the finance, accounting, and sales departments, as well as senior and middle management, job project managers, and preventative maintenance planners – use Business Objects to gain insight into the transport cycle and ensure timely delivery of materials to customers.
Steve Snodgrass, chief financial officer at Graniterock, said the information is also used to monitor against the company’s internal efficiency scoreboard. “Our goal is to get lorries out of the quarry within 10 minutes,” he said.
In California, lorries are charged at 60p per minute, which means the more time they stay at the quarry the more it costs the customer. “We needed to get the lorries through the quarry faster,” he said.
Snodgrass began a project using passive tags on the lorries. The system collects information on the lorry, project assignment and weight for each load via RFID tag readers located at plant locations.
When a lorry arrives at the quarry a Visual Basic application provides a unique ID and the lorry is weighed. On leaving the quarry, the lorry is weighed again. The application stores this information automatically and calculates the weight of asphalt on the load, without requiring staff to key in any information.
“Previously staff at the quarry had to punch in all the information into a computer,” Snodgrass said. Reports containing the turnaround time for lorries can then be e-mailed to the customer.
At its largest quarry, 500 lorries a day are passed through the system, Snodgrass said.
The next stage in Graniterock’s RFID deployment will involve implementing GPS. “This will allow us to figure out what exactly is happening at a customer’s site,” Snodgrass said.
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