Business intelligence: Peter Simons reports on the latest

developments in the fast-moving BI software industry and

forecasts new trends in decision-support technology.
The typical business intelligence (BI) architecture can be seen as having a stack of layers. The base
usually comprises source data systems, from where data is processed by "extract, transform, load
ETL also means Express Toll Lanes, see Express Toll Lanes.
Extract, Transform, and Load (ETL) is a process in data warehousing that involves
extracting data from outside sources,
" (ETL (Extract, Transform, Load) The functions performed when pulling data out of one database
and placing it into another of a different type. ETL is used to migrate data, often from relational
databases into decision support systems. ) software into a data warehouse. Above that are the BI and
application layers and then at the top there is the presentation or delivery layer, which can include
executive dashboards, scorecards and other decision-making tools.
Software houses used to specialise in making applications for these different layers, which meant
that businesses would assemble their own stacks using independent suppliers. So a company might
have an SAP enterprise resource planning See ERP.
(application, business) Enterprise Resource Planning - (ERP) Any software system designed to
support and automate the business processes of medium and large businesses. (ERP (Enterprise
Resource Planning) An integrated information system that serves all departments within an
enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software
rather than proprietary software written by or for one customer. ) system that feeds into an Oracle
data warehouse, for example, and the firm's finance department might use an application from
Hyperion for reports and another from SAS (1) (SAS Institute Inc., Cary, NC, www.sas.com) A
software company that specializes in data warehousing and decision support software based on the
SAS System. Founded in 1976, SAS is one of the world's largest privately held software companies.
See SAS System. for analytics.
As BI has evolved, the greatest challenge has been how to integrate data on different systems
accumulated from different vendors over many years. This challenge is being addressed in the
following key ways:
* "Service-oriented architecture See SOA. " (SOA (1) (Start Of Authority) The first record in a DNS
zone file. See DNS records.
(2) (Service Oriented Architecture) The modularization of business functions for greater flexibility
and reusability. ) has been developed as a solution that eliminates the need for point-to-point
connections between resources. It provides access to data in legacy systems through linked
"services".
* ERP, ETL, data warehouse and customer relationship management (CRM (Customer Relationship
Management) An integrated information system that is used to plan, schedule and control the
presales and postsales activities in an organization. ) software vendors are now offering integrated
BI applications. And BI vendors are adding ETL tools. Some brands span different layers of the BI
stack (see diagram).
* The big vendors--IBM, Microsoft, Oracle and SAP--which already offered some BI solutions, have
moved into performance management by acquisition. There has been a feeding frenzy feeding
frenzy
n.
1. A period of intense or excited feeding, as by sharks.
2. Excited activity by a group, especially around a focal point: (see "Who bought whom") and the
big players are still digesting their prey. In future, they are likely to offer more integrated BI
solutions.
BI and business performance management (or business analytics) used to be seen as separate
applications, but the big vendors will integrate them. BI solutions have already become more
accessible through web enablement and more applicable through the inclusion of a range of data
sources and pre-defined business content. As Gartner puts it: "The data warehouse has evolved from
an information store supporting the running of reports and ad-hoc queries into an analytics
infrastructure repository."
BI has developed from reporting on data from an ERP source to include functions such as financial
consolidation; activity-based costing In a business organization, Activity-based costing (ABC) is a
method of allocating costs to products and services. It is generally used as a tool for planning and
control. This is a necessary tool for doing value chain analysis. ; dashboards and scorecards; data
mining, integration and warehousing; and "pervasive intelligence".
The BI industry is dynamic, with frequent announcements of new products, alliances and
acquisitions. There are many vendors, but the biggest are as follows:
* SAP and Business Objects. Together these are the biggest players in the BI market. SAP is best
known for its ERP system but it has been expanding into BI with the development of SAP Netweaver
BI and SAP BI Accelerator In computing, the SAP BI Accelerator is a computer appliance -
preinstalled software on predefined hardware - which is used to speed up OLAP queries. This
solution eliminates the need for aggregations. and then its acquisitions of OutlookSoft and
PeopleSoft. The acquisition of Business Objects in 2007 should give SAP a strong position in this
market.
* Oracle and Hyperion. Oracle has built its reputation on database systems rather than ERR
Hyperion is highly rated for its consolidation and financial accounting functionality. Siebel already
provided Oracle with an analytics capability but the acquisition of Hyperion has added strength in
the crucial area of financial planning Financial planning
Evaluating the investing and financing options available to a firm. Planning includes attempting to
make optimal decisions, projecting the consequences of these decisions for the firm in the form of a
financial plan, and then comparing future performance against tools. It is not yet clear how this
will fit with other acquisitions.
* IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's
largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400
midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based
servers (xSeries) and Cognos. IBM already had some BI capability with its DB2 product, but its
strength lies in databases. Cognos, with its SOA and planning tools, should prove a valuable
acquisition.
* Microsoft. Windows and MS Office may have achieved world domination "World conquest"
redirects here. For other uses, see World domination (disambiguation).
The concept of world domination (sometimes world conquest) has long been a popular theme in both
history and fiction. , but Microsoft's BI offering is yet to be seen as providing the same depth as its
specialist competitors' products. MS PowerPoint provides a complete BI stack, with MS Office as the
top layer, so Microsoft could potentially bring BI to a wider audience.
* Information Builders (Information Builders, Inc., New York, www.informationbuilders.com) A
software company founded in 1975 by Gerald Cohen that specializes in enterprise business
intelligence and real time Web reporting. . This vendor's BI platform enjoys a good reputation for its
ability to integrate data, while its web-based delivery puts it in a strong position to offer pervasive
intelligence throughout a large organisation.
* SAS. A privately owned business, SAS ploughs back more than 20 per cent of its turnover into
R&D. The company has a broad BI offering that's highly rated, but it is best known for its data
mining and predictive analytics Predictive analytics encompasses a variety of techniques from
statistics and data mining that process current and historical data in order to make "predictions"
about future events. capabilities. It recently formed an alliance in data processing with Teradata.
Some people see it as expensive but SAS's customers are enthusiastic.
If the big vendors integrate their acquisitions so that they can offer a complete BI stack, they may
command a greater market share. But their acquisitions will take time to digest and some users
prefer not to rely on a single vendor.
Developments in BI architecture have focused attention on:
* Activity-based costing solutions--these are of growing interest as companies seek to understand
cost allocation in detail in order to cut costs and improve efficiency.
* Customer profitability--analysis from a financial perspective of data taken from electronic point of
sale (Epos) and CRM systems can yield valuable insights.
* Business process management (BPM)--this is being used to examine, analyse and improve
processes, while business activity monitoring See BAM. (Bam) software is being used to track
performance.
* The convergence of data mining and BI: data mining identifies patterns, correlations or
relationships in a data set--this was once the preserve of niche players such as SAS, SPSS A
statistical package from SPSS, Inc., Chicago (www.spss.com) that runs on PCs, most mainframes
and minis and is used extensively in marketing research. It provides over 50 statistical processes,
including regression analysis, correlation and analysis of variance. Autonomy and Inforsense. But
the main database and BI vendors have included data mining functions in their software. Oracle data
mining has been integrated into the database layer and the results can be shown in the BI
presentation layer. Microsoft has embedded data mining functions in its SQL Server. And SPSS
predictive analytics can be used as an element of the Business Objects BOXI platform.
* The way in which BI considers structured data from relational databases and brings to light
patterns and trends that could guide business decisions--but its scope is expanding to include
unstructured data. Text mining vendors such as Inxight (now part of SAP) specialise in gleaning
Harvesting for free distribution to the needy, or for donation to a nonprofit organization for ultimate
distribution to the needy, an agricultural crop that has been donated by the owner. information
from unstructured text--eg, from e-mails, documents and web pages.
* The drive to provide BI for all by providing "embedded intelligence" into operational business
processes. The vehicle for this is likely to be a mix of packaged BI analytics that may converge with
Bam functionality, which in itself is likely to be driven by the development of service-oriented
composite applications.
* Making BI more widely available to smaller companies--Quickbooks offers cheap BI for mid-sized
companies, for example, while Netsuite already hosts BI and CRM services over the internet. This
model is known as software as a service (Saas), whereby software need not be purchased and
maintained in-house but can be accessed online. This could bring BI to smaller companies.
* Making BI more user-friendly--according to its web site, Google OneBox for Enterprise provides
quick access to information in an enterprise network. Users can access real-time business data from
ERP systems, CRM applications or BI analysis. In time, data mining and predictive analytics may
become as user-friendly as a Google search.
[ILLUSTRATION OMITTED]
BI has changed. It now encompasses financial reporting and analysis as well as operational
reporting and analysis. The problem of integrating data from diverse systems is being addressed and
BI is becoming pervasive, making information available to more users. These developments could
better inform corporate decision-making and free management accountants to become business
partners.
Who bought whom?
* SAP acquired Pilot Software, OutlookSoff and then Business Objects (which had itself bought out
ALG ALG antilymphocyte globulin.
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antilymphocyte globulin.
ALG Antilymphocyte globulin, see there Software, Crystal Decisions, InXight Software, Fuzzy
Informatik and Cartesis).
* Oracle took over PeopleSoft (which had acquired JD Edwards), Siebel, Hyperion and Interlace To
illuminate a screen by displaying all odd lines in the frame first and then all even lines. Interlacing
uses half frames per second (fields per second) rather than full frames per second. Systems.
* Cognos bought Celequest and Applix before it was taken over by IBM.
* Microsoft acquired ProClarity, Navision, Great Plains and Solomon.
Further information
A CIMA Mastercourse entitled "Corporate performance management and business intelligence" will
take place in London on December 10, For details visit www.cimamastercourses.com
Peter Simons is a technical specialist in CIMA's Innovation and Development team. This is an extract
from a future report (see www.cimaglobal.com/decisionmaking).
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