The State of Business Intelligence TechWeb TechWeb November 2008
The State of Business Intelligence
TechWebTechWeb
November 2008
TechWeb The State of Business Intelligence November 2008 Page 2
Overview
Business intelligence (BI) refers to technologies, applications and practices for the collection, integration, analysis and presentation of business information, and sometimes to the information itself. BI systems provide historical, current and predictive views of business operations, most often using data that has been gathered into a data warehouse or a data mart, all in an effort to support better business decision making.
Software elements support the use of this information by assisting in the extraction, analysis and reporting of information. Applications tackle sales, production, financial and many other sources of business data for purposes that include, notably, business performance management. Information may be gathered on comparable companies to produce benchmarks.
The key challenge facing businesses is dealing with the data. Considering that digital information doubles every year or so, businesses need a strategic approach toward making information accessible and creating a scalable, reliable architecture.
As the BI market evolves, businesses are enabled to better leverage and preserve their data, with an eye toward gathering insights that enhance decision making and improve competitive advantage, and even transform the business.
State of Business Intelligenc
e
TechWeb The State of Business Intelligence November 2008 Page 3
Methodology
Timing: In October 2008, TechWeb conducted an online study on the state of business intelligence for Satyam. On October 28, TechWeb sent e-mail invitations to an Nth name sample, asking recipients to participate in a brief survey.
Questionnaire: The questionnaire was developed by TechWeb and the sponsor company, Satyam.
Sample and Fielding: The sample was drawn from TechWeb’s database in North America. E-mails were sent to subscribers who had agreed to be contacted by TechWeb for research purposes, inviting them to participate in an online survey. An embedded URL directed respondents to the survey hosted by our Web survey host partner, SurveyGizmo.
Incentive: Those who completed the survey could opt in to enter a drawing to receive a 16GB Apple iPod Nano, valued at $199 from TechWeb. TechWeb research was responsible for all phases of programming the survey, as well as coding and analyzing the survey responses. These procedures were carried out in strict accordance with established market research practices.
Response: A total of 410 respondents qualified and completed the survey. To qualify, respondents confirmed that they had an active role in the purchase, implementation, monitoring and/or modification of their company’s business intelligence/data warehousing systems. Data in this report is based on these 410 respondents unless otherwise noted. The total study base of 410 respondents yields a margin of error of +/- 4.8 percent.
The State of
ERP
State of Business Intelligenc
e
TechWeb The State of Business Intelligence November 2008 Page 4
Conclusions
Many organizations still struggle with effectively leveraging their data to drive more sales, compete better in global markets, link up more closely with customers, and more.
BI users who are the most satisfied with their deployments tend to have more mature implementations.
The downturn in the economy may have an impact on budgets for BI, which aren’t necessarily large to begin with. But it also presents an opportunity for IT leaders to derive greater value from analytics and reporting systems.
State of Business Intelligenc
e
TechWeb The State of Business Intelligence November 2008 Page 5
The State of Business Intelligence:
With Maturity Comes Success
STUDY FINDINGS
TechWeb The State of Business Intelligence November 2008 Page 6
Most Are Moving Toward Centralized Planning and Standardized BI Technologies
It’s worth noting that just 18 percent of respondents have a decentralized BI deployment with little or no coordination of practices and tools. When implementations within a company are isolated from each other ― and when multiple and duplicate systems, nonstandard processes, and manual control environments are the norm ― costs rise and business performance is hampered.
It’s worth noting that just 18 percent of respondents have a decentralized BI deployment with little or no coordination of practices and tools. When implementations within a company are isolated from each other ― and when multiple and duplicate systems, nonstandard processes, and manual control environments are the norm ― costs rise and business performance is hampered.
Which best characterizes your business intelligence deployment?Which best characterizes your business intelligence deployment?
We are moving toward centralized
planning and standardized technologies.
50.4%
We have an enterprisewide BI strategy that standardizes
and centralizes practices, capabilities and technologies.
32.0%
We have a decentralized BI deployment with little or no
coordination of practices and tools. 17.6%
Single response allowed
It’s welcome.
TechWeb The State of Business Intelligence November 2008 Page 7
More mature usage of BI is exemplified by factors such as: creating performance management dashboards or scorecards that align metrics with corporate strategy and enable root-cause analysis among employees at every level; providing intelligence as an artifact in a workflow that optimizes the process the user is engaged in; and promoting data integrity by way of active reporting on the quality of master data.
More mature usage of BI is exemplified by factors such as: creating performance management dashboards or scorecards that align metrics with corporate strategy and enable root-cause analysis among employees at every level; providing intelligence as an artifact in a workflow that optimizes the process the user is engaged in; and promoting data integrity by way of active reporting on the quality of master data.
Most Are in Early Lifecycle Stages of BI Environment
On a scale of 1 to 5, with 1 being "nascent" and 5 being "very mature," please rate the lifecycle stage of your BI environment.
On a scale of 1 to 5, with 1 being "nascent" and 5 being "very mature," please rate the lifecycle stage of your BI environment.
1 - Nascent10.5%
2
25.1%
3
41.6%
4
17.0%
5 - Very Mature
5.8%
23% said “4” or “5”
Single response allowed
TechWeb The State of Business Intelligence November 2008 Page 8
BI has made major inroads. However, for a significant number of companies, there is still quite a way to go. Nearly one-quarter of respondents say their BI implementations have been unsatisfactory or very close to that.
BI has made major inroads. However, for a significant number of companies, there is still quite a way to go. Nearly one-quarter of respondents say their BI implementations have been unsatisfactory or very close to that.
One-Third Rate Success of BI Implementation as Positive
On a scale of 1 to 5, with 1 being "unsatisfactory" and 5 being "exceptional," please rate the success of your BI implementation so far.
On a scale of 1 to 5, with 1 being "unsatisfactory" and 5 being "exceptional," please rate the success of your BI implementation so far.
1 - Unsatisfactory
4.1%
2
18.5%
3
44.4%
4
29.1%
5 - Exceptional
3.9%
33% said “4” or “5”
Single response allowed
TechWeb The State of Business Intelligence November 2008 Page 9
Majority Use or Plan to Use Prebuilt Analytic Apps with Built-in Reporting
Pre-built analytic applications can give enterprises basic reporting capabilities or access to domain expertise out of the box, which might otherwise take them years to develop.
Pre-built analytic applications can give enterprises basic reporting capabilities or access to domain expertise out of the box, which might otherwise take them years to develop.
Do you use pre-built analytic applications with built-in reporting or decision-support capabilities to improve the use of BI?
Do you use pre-built analytic applications with built-in reporting or decision-support capabilities to improve the use of BI?
Yes, we do.44.1%
No.28.3%
We don’t right now, but plan to.27.6%
Single response allowed
TechWeb The State of Business Intelligence November 2008 Page 10
Most Use Conventional Data Warehouse
Old school still rules. The conventional data warehouse is still king, according to our respondents. Low-latency data warehouses, which house data less than one day old with an eye toward giving the most recent picture of an organization’s information, are not very widely adopted. And federated warehouses, wherein the design and development of independent data marts must be managed and based on a shared business model, are used by just 10 percent of respondents.
Old school still rules. The conventional data warehouse is still king, according to our respondents. Low-latency data warehouses, which house data less than one day old with an eye toward giving the most recent picture of an organization’s information, are not very widely adopted. And federated warehouses, wherein the design and development of independent data marts must be managed and based on a shared business model, are used by just 10 percent of respondents.
What kind of data warehouse are you using?What kind of data warehouse are you using?
Conventional data warehouse
66.8%Don’t know
12.2%
Federated/virtual access to real-
time data10.4%
Single response allowed
None5.8%
Low-latency warehouse
4.8%
TechWeb The State of Business Intelligence November 2008 Page 11
More than Half Have Not Measured Business Benefits
It’s hard for business executives to quantify BI’s return on investment, experts say. Indeed, survey respondents have not aggressively attempted to measure the business value that has been derived from business intelligence and data warehousing systems.
It’s hard for business executives to quantify BI’s return on investment, experts say. Indeed, survey respondents have not aggressively attempted to measure the business value that has been derived from business intelligence and data warehousing systems.
Has your organization carried out or planned any exercise to calculate or measure the business benefits/value that have been derived as a result of
having BI and/or DW software and services?
Has your organization carried out or planned any exercise to calculate or measure the business benefits/value that have been derived as a result of
having BI and/or DW software and services?
No55.8%
Single response allowed
Yes44.2%
TechWeb The State of Business Intelligence November 2008 Page 12
Real-Time Data Enables Better Decision Making
BI has contributed to organizational success in a number of ways. But there are many more opportunities to be harvested. Only a third are using their analytics deployments to better understand and take advantage of emerging market opportunities, for example.
BI has contributed to organizational success in a number of ways. But there are many more opportunities to be harvested. Only a third are using their analytics deployments to better understand and take advantage of emerging market opportunities, for example.
Specifically, how has BI/DW contributed to the success of your organization? Which would you say is the top way BI/DW has contributed to
the success of your organization?
Specifically, how has BI/DW contributed to the success of your organization? Which would you say is the top way BI/DW has contributed to
the success of your organization?
Top bar - Single response allowed Bottom bar - Multiple responses allowed
Top Way BI Contributes to Success
All Ways BI Contributes to Success
We can make better decisions using real-time data to innovate, increase competitiveness & save costs.
23.6%50.9%
44.9%
59.3%
34.7%
3.5%
6.5%
We gain insight to streamline business processes.
We can understand our customers at all levels in order to maximize revenue
opportunities.
Operational intelligence enables us to monitor business processes in real-time
to avoid disruptions in bus. processes.
We have reliable information about our supply chain, which helps us manage
production and pricing.
We can understand and take advantage of new business opportunities.
We can understand and take advantage of emerging market opportunities.
Other
19.4%
17.1%
14.1%44.0%
11.6%
38.7%
32.2%
4.2%8.1%
TechWeb The State of Business Intelligence November 2008 Page 13
Cost of Relevant Software & Licenses, Lack of End-User Training Present Greatest Challenges
Nearly half of all respondents cited the costs of relevant software and licensing as one of their challenges to success, and 17 percent called it the number one challenge.
Nearly half of all respondents cited the costs of relevant software and licensing as one of their challenges to success, and 17 percent called it the number one challenge.
What are the greatest challenges to using BI/DW to gain insights that can drive competitive advantage in your business?
Which would you say is the one greatest challenge?
What are the greatest challenges to using BI/DW to gain insights that can drive competitive advantage in your business?
Which would you say is the one greatest challenge?
Top bar - Single response allowed Bottom bar - Multiple responses allowed
Greatest Challenge
All Challenges
Complexity of BI/DW tools and interfaces
17.4%49.4%
41.3%
56.3%
35.1%
5.0%
7.9%
Lack of BI expertise in IT
Difficulty in accessing data
Change management/user adoption- related issues
Lack of buy-in from C-level executives
Insufficient IT support
No scalability
Other
14.1%
11.9%
9.5%
10.3%
27.0%
37.2%
10.0%1.9%
Poor planning of BI/DW programs
Lack of end-user training
Cost of relevant software & licenses
10.3%
43.7%
9.3%40.1%
30.5%
2.4%4.3%
TechWeb The State of Business Intelligence November 2008 Page 14
Per-User Licenses Prove to Be Costliest Aspect
For some companies, high license costs may be the result of isolated, departmental approaches to BI, because the organization fails to capitalize on opportunities to get better deals on higher-volume purchases.
For some companies, high license costs may be the result of isolated, departmental approaches to BI, because the organization fails to capitalize on opportunities to get better deals on higher-volume purchases.
What has been the costliest aspect of running/maintaining your BI/DW system?
What has been the costliest aspect of running/maintaining your BI/DW system?
Single response allowed
Per-user licenses
Poor planning and management of BI/DW programs
Project overruns/implementation delays
Piecemeal purchase of applications
Time to train end users on use of application
Lost revenue/opportunities from difficulty in extracting current and
relevant/reliable data
23.0%
17.0%
17.0%
15.1%
14.3%
13.6%
TechWeb The State of Business Intelligence November 2008 Page 15
Nearly Two-Thirds Do Not Have Center of Excellence to Drive Usage of BI
Without developing BI expertise internally ― or partnering with a provider that has invested in its own BI center of excellence to help organizations promote the effective use of business intelligence to support business strategy ― businesses are at risk on a number of fronts.
Without developing BI expertise internally ― or partnering with a provider that has invested in its own BI center of excellence to help organizations promote the effective use of business intelligence to support business strategy ― businesses are at risk on a number of fronts.
Does your organization have a competency center/center of excellence to drive the usage of BI within the organization?
Does your organization have a competency center/center of excellence to drive the usage of BI within the organization?
Single response allowed
Yes34.7%
No65.3%
TechWeb The State of Business Intelligence November 2008 Page 16
BI Doesn’t Account for Large Percentage of IT Budgets
Only 5 percent of companies have allocated more than 10 percent of their budgets to BI/DW efforts. Most of them spend between just 1 and 3 percent of their IT budgets in this area.
Only 5 percent of companies have allocated more than 10 percent of their budgets to BI/DW efforts. Most of them spend between just 1 and 3 percent of their IT budgets in this area.
What percentage of annual IT budget is allocated toward BI/DW by your organization in this financial year?
What percentage of annual IT budget is allocated toward BI/DW by your organization in this financial year?
Single response allowed
1% to 3%38.5%
4% to 6%23.2%
7% to 10%12.1%
Less than 1%21.4%
More than 10%4.8%
TechWeb The State of Business Intelligence November 2008 Page 17
Oracle/Hyperion, SAP/Business Objects Top Providers of BI/DW Technologies
In a software market that has rapidly consolidated over the past 12 to 18 months, Oracle and SAP lead among respondents’ BI/DW implementations.
In a software market that has rapidly consolidated over the past 12 to 18 months, Oracle and SAP lead among respondents’ BI/DW implementations.
Who is your current vendor providing BI/DW technologies to your organization, both on an enterprisewide and departmental level?
Who is your current vendor providing BI/DW technologies to your organization, both on an enterprisewide and departmental level?
Single response allowed
IBM/Cognos
SAP/Business Objects
Oracle/Hyperion 27.3%
23.0%
17.8%
10.8%
Information Builders
SAS
MicroStrategy
NEC
Other
4.3%
3.5%
1.2%
12.1%
TechWeb The State of Business Intelligence November 2008 Page 18
Master Data Management Is Mid-Level Priority for Most
One opportunity to derive further value from data warehouses is to expand the methods and practices in place to support or improve master data management (MDM) efforts. Yet it’s not a high priority for most companies, even though organizations today are struggling with issues around the lack of a single view of customer, product and supplier data.
One opportunity to derive further value from data warehouses is to expand the methods and practices in place to support or improve master data management (MDM) efforts. Yet it’s not a high priority for most companies, even though organizations today are struggling with issues around the lack of a single view of customer, product and supplier data.
What priority do you place on master data management?What priority do you place on master data management?
Single response allowed
Low – Data quality and accessibility are
not much of an issue. 10.0%
Medium – There are other things
our business needs to do first.
55.8%
High – It’s top of our to-do list.
19.2%
Don’t know.15.0%
TechWeb The State of Business Intelligence November 2008 Page 19
Oracle Is Top-Named MDM Vendor
One of the factors that is critical to the goal of BI deployments ― that is, getting the right data results ― is predicated on having good data to begin with. Oracle is cited as the vendor most often used for MDM efforts among survey respondents.
One of the factors that is critical to the goal of BI deployments ― that is, getting the right data results ― is predicated on having good data to begin with. Oracle is cited as the vendor most often used for MDM efforts among survey respondents.
Who is your master data management vendor?Who is your master data management vendor?
Single response allowed
Oracle
SAP
Microsoft
Teradata
Don’t know
Don’t have one
IBM
17.3%
12.7%
10.0%
8.0%
2.7%
21.9%
22.6%
Other 4.8%
TechWeb The State of Business Intelligence November 2008 Page 20
Customer Information Data Consolidation Tops MDM Usage
MDM initiatives, which may be customer-, product- or supplier-focused, among other areas, will lead to a 60 percent reduction in costs associated with the elimination of redundant master data for an organization, experts say.
MDM initiatives, which may be customer-, product- or supplier-focused, among other areas, will lead to a 60 percent reduction in costs associated with the elimination of redundant master data for an organization, experts say.
What data will you be consolidating/synchronizing with MDM? Please select all that apply.
What data will you be consolidating/synchronizing with MDM? Please select all that apply.
Multiple responses allowed
Product information
Supplier/vendor information
Corporate business performance information
Don’t know
None
Customer information 50.3%
41.0%
34.6%
32.6%
28.0%
23.5%
5.6%
Materials information 27.2%
Employee information
TechWeb The State of Business Intelligence November 2008 Page 21
RESPONDENT DEMOGRAPHICS
The State of Business Intelligence
TechWeb The State of Business Intelligence November 2008 Page 22
Which of the following best describes your job function?
Which of the following best describes your job function?
Respondent Demographics: Job Function
Executive IT management (CIO, VP IT) 1.5%
IT management 21.6%
IT staff 35.3%
Project manager 10.7%
IT consultant 10.0%
Executive corporate management (CEO, President, Corp VP) 1.9%
General corporate management 6.8%
General corporate staff 9.0%
Consultant 3.2%
Single response allowed
TechWeb The State of Business Intelligence November 2008 Page 23
Respondent Demographics: Company Size
How many employees are in your organization in total?
How many employees are in your organization in total?
Less than 1003.6%
100 to 4995.8%
500 to 9996.3%
1,000 to 4,99927.1%
5,000 or more57.2%
Single response allowed
TechWeb The State of Business Intelligence November 2008 Page 24
All Respondents Have an Active Role in Purchase or Monitoring of BI Systems in Their Organization
What is your role in the purchase, implementation, monitoring and modification of your company’s business intelligence/data warehousing
systems?
What is your role in the purchase, implementation, monitoring and modification of your company’s business intelligence/data warehousing
systems?
Multiple responses allowed
Software architect/development
Advisory (software expertise)
Software testing/deployment
Data analyst (line of business)
IT decision maker
Advisory (line of business)
End user (line of business)
Decision maker (line of business)
36.5%
35.6%
30.0%
24.2%
22.2%
20.8%
15.9%
12.8%
TechWeb The State of Business Intelligence November 2008 Page 25
Respondent Demographics: Industry
Government 13.59%Manufacturing and industrial (noncomputer) 12.38%Health-care and medical 8.98%IT vendors 6.31%Financial services/Banking 5.58%Education 5.10%Consulting and business services 4.61%Insurance and HMOs 3.64%Financial services/Insurance 3.16%Financial services/Other 3.16%Other 3.16%Telecommunications and ISPs 3.16%Electronics 2.91%Financial services/Securities and investments 2.67%Media and entertainment 2.67%Retail and E-commerce 2.43%Biotech, biomedical and pharmaceutical 2.18%Utilities 2.18%Distribution 1.94%Logistics and transportation 1.70%Construction and engineering 1.46%Energy and utilities 1.46%Food and beverage 0.97%Hospitality and travel 0.97%Metals and natural resources 0.97%Chemicals 0.73%Consumer goods 0.73%Real estate 0.73%Automotive 0.49%
Single response allowed