Ken Davenport, President of PerformanceG2, Inc.

As business intelligence consultants, we know well the many potential pitfalls of trying to establish an enterprise business intelligence strategy.  Organizations — both large and small — are made up of distinct operating units that often compete for scarce resources.  This is never more true than now, with a slow economy and dwindling IT budgets.  Many projects get started in specific departments and end up being siloed — precisely where you don’t want them to be if you are looking to use technology to gain a “single version of the truth” about your company’s performance.

The most successful BI strategies incorporate a holistic approach that looks at your company as a series of interdependent parts.  Information that remains siloed is of little value to decision-makers, who need a broad view of the business to understand how decisions will affect performance.

A great article in CIO magazine that came out way back in 2007 dealt with many of these issues and I’ve linked to it here: 1o Keys to a Successful BI Strategy.

The ten keys will seem straightforward, but are much easier said than done.  They range from choosing a C-level sponsor (but NOT the CIO),  having a common understanding of business terminology, understanding the needs of the business, start with “low-hanging fruit” that will lead to a quick win, and picking the right consulting partner who can assist you in avoiding the common pitfalls inherent to the DYI approach.

For more information on how PerformanceG2 can assist you in your BI strategy, click here.

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IBM has increased its strategic move into Business Intelligence in a $1.2 Billion purchase of analytics firm SPSS, Inc.  The move is designed to augment the company’s 2008 acquisition of Cognos, which established IBM as a leader in the corporate performance management business.

Details of the acquisition can be found here.

The acquisition of SPSS will enable IBM to deepen its competitive abilities in the strategic services business, where it competes head-to-head with SAP and Oracle.  Both SAP (with its acquisition of Business Objects) and Oracle (Hyperion) have moved to improve their analytics offerings as part of their enterprise-scale data management solutions.

For IBM, however, the acquisition of Cognos and SPSS are in line with the strategic objective of enhancing its ability to provide strategic consulting services.   The recent economic conditions have created an opportunity to use analytics solutions to improve profitability and efficiency, and IBM sees both of these as critical to companies in a recession.

According to the Wall Street Journal, the most recent financial results for IBM seem to bear this out — with the company making major inroads into analytics-based services business in health care, government and other strategic sectors.   The value proposition for IBM is that it can use its analytics technology to assist customers in managing their operations. The SPSS software, for example, is used by the Atlanta Police to assist it in determining which parolees with re-offend.  This kind of work is central to IBM’s “services-first” strategy:

Using proprietary software and data from from motion and temperature sensors, IBM tells railroads how to make trains run on time and utilities how to cut electricity use. Projects in the energy sector, transportation, water and health care are part of what it calls “smarter planet” projects.

“We look for the consulting arm to lead our entry to the client,” driving sales of other products, says IBM Chief Financial Officer Mark Loughridge.

The consulting work falls under IBM’s Global Business Services unit, which grew 9% last year to $19.6 billion, or about a fifth of IBM’s revenue of $103 billion.

The following graphic underscores the importance of services now at IBM:

It is clear that Cognos and SPSS fit squarely into IBM’s future — making it clear that even in a recession, investing in analytics is a smart move for all companies!