Ken Davenport, President of PerformanceG2
 
If your company is struggling to match the promise of BI and Performance Management (CPM) technologies with the reality of day-to-day work flow and implementation challenges, take heart: you are not alone. According to a recent Ventana Research study of BI and CPM, customer that examined the maturity and direction of technology adoption strategies, a significant percentage of customers face considerable obstacles.

• A mere 9 percent of research participants are very satisfied with their organization’s BI efforts. They have only basic BI capabilities, such as querying sources for specific data (74 percent), generating reports from data (74 percent) and accessing data from a spreadsheet for further analysis (70 percent).
• The capabilities organizations are currently working to deploy are only somewhat more sophisticated: communicating data in the right format (27 percent), searching for data (26 percent), presenting data effectively (25 percent) and creating measures and metrics (24 percent).
• The research also found a small but growing desire to provide mobile device support for BI and performance management as well as what-if scenario analysis and collaboration.

As Julie Langenkamp at Information Management Online notes in a post on the Ventana study, the findings “indicate that most organizations revealed they’re still in early stages of development, with only 15 percent at the highest innovation level of maturity in the Ventana Research Maturity Index. Size of the organization was a relevant factor, and organizations with 10,000 or more employees, or more than $10 billion in revenue, found to be more mature. There is growth in advancing BI into performance management in the areas of operations, finance and customer management in more than half of organizations, and a strong desire to improve in 41 percent of them.”

“The market for BI has been advancing for decades, but organizations have not achieved the value of deployments with lack of sophistication use of technologies and overuse of spreadsheets,” says Mark Smith, CEO and EVP Research of Ventana Research. “But making BI efficient is not sufficient, as helping organizations enable performance management is just as important. Both BI and performance management are not as mature as you think, as this research found that we are at an inflection point of improvement.”

More than anything, the Ventana study shows that effective performance management initiatives require a substantial investment in time and resources – beyond the capital invested to acquire the technology. At PerformanceG2, we have seen many customers make substantial investments in software and services, only to fail to grasp the challenges of user-adoption, change management and end-user training required to ensure long-term success. This is why all of our service engagements include a post-implementation training program that ensures that both administrative and business users are sufficiently trained to get the most out of the new technology. In our experience, effective user-adoption is ofter the key variable in the success or failure of any CPM or BI initiatives.

For more information on CPM and BI services and solutions that can help your organizations, connect with us at (877) 742-4276 or email us at info@performanceg2.com
 
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Ken Davenport, President of PerformanceG2
 
Last week’s $5.8 billion purchase of Sybase by SAP, sent shockwaves through the industry, and made smaller by one of the few truly “independent” technology providers in the market. The acquisition of Sybase follows the 2007 purchase of Business Objects by SAP, and comes on the heels of a 24 month consolidation spree that saw Cognos swallowed up by IBM and Hyperion becoming part of Oracle.

So what will the impact of the SAP/BO/Sybase mashup be?

An interesting take can be found on Boris Evelson’s blog at Information Management. Boris is a principal analyst at Forrester Research, and is a leading expert in the BI marketplace. Here’s a snippet of his take on the Sybase deal:

“The Obvious:

• SAP Gets its own relational (Sybase ASE) and analytical (Sybase IQ) DBMS. Why is this a positive since SAP already has tight partnerships with major DBMS and DW vendors such as: Oracle, IBM, Microsoft, Teradata and HP? Simple. First, SAP can now control the code. Second, SAP can now potentially reduce reliance on DBMS partners, most of whom (Oracle, IBM, Microsoft) have their own full software stacks and therefore compete, often putting a strain on partnership relationships.
• SAP also gets highly relevant (for low latency BI) and currently missing CEP technology from the Sybase Aleri acquisition and on OEM version of Coral8.
• Sybase gets badly needed BI front end on top of its Sybase IQ analytical DBMS. While Sybase is leading the market in the columnar DBMS, it is somewhat challenged selling and positioning the products with the business buyers, since they can’t really see, feel or touch it.

The Not-So Obvious:

• Will SAP BW be now certified on ASE, IQ or both? IQ is probably a better choice, since BW is mostly analytical and not transactional. But first, that would require giving IQ an MDX interface which it does not have…”

To read Boris’ full-blog on the deal, click here.

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Ken Davenport, President of PerformanceG2
 
 
This week, IBM reported earnings and the company is reporting a significant shift in IT spending with Business Analytics leading the way, click on the link below to read more:

http://www.crn.com/software/224400777;jsessionid=DG3ZBLH3I40ZBQE1GHPCKHWATMY32JVN
 
Also, here is an interview with Rob Ashe that is a must-read:

http://www.forbes.com/2010/04/20/businesss-analytics-oracle-technology-cio-network-ibm.html?boxes=Homepagechannels
 
And finally, Gartner is to name IBM as leader in BPM for 6th consecutive year:

http://online.wsj.com/article/PR-CO-20100420-907753.html?mod=wsjcrmain
 
 
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Ken Davenport, President of PerformanceG2
 
Perhaps nowhere is the promise of data analytics greater than in health care – where reams of data in newly evolving clinical information systems provide the basis for what could be valuable long-term analysis of cost and care outcomes. Unfortunately, progress has been hit and miss. As Jim Ericson, editorial director of Information Management, points out in his article “BI’s March to Health Care”, clinical health care data is heavily dependent on interpretations of care practices that change over time – particularly as diagnostic tools and medications improve. Thus, static snapshots of clinical outcomes at any given point in time may not have as much value as they would in other industries.

“We generate and use data like any other industry, but heath care does not lend itself to the use of discrete data because the outcomes are necessarily fuzzy and ongoing,” says Dick Gibson, M.D., the CIO at Legacy Health, an integrated network of six hospitals with research and other facilities in Portland. “Airlines have seats, schedules and know if you landing on time. In health care, we know you’re alive but the big money goes to broad sets of descriptive terms around patient care that are very qualitative.”

For BI and performance management to have meaning, these terms need to be unified and reconciled in their definition and accuracy. This can be a challenge in an industry that lacks standards and common data categories and definitions. “The challenges of data quality are multiplied by the number of codes and procedures managed in systems for lab results, pharmacy, check-in and other processes. Even within a single institution, the lack of standards, or ironically, the fact there are far too many, creates huge data quality and integration challenges.

As Ericson points out, however, “it’s a challenge providers must meet, both in response to consumer demand and regulatory interest in keeping down costs. That’s why information systems are increasingly required to bring a compliant and cohesive view to inpatient and outpatient facilities, right down to the bedside of the patient at the point of care. The approaches to meeting this challenge vary by hospital, with some opting for a single-vendor approach, while other turn to multiple software partners. The evolution of provider software companies offers an interesting comparison to other industries, which have adopted enterprise resources planning tools only to find the tools lacking. Nonetheless, the data warehouse in the clinical setting is here to stay.”

Read the rest of Jim’s informative article here – and see how he discusses how to implement BI effectively in a health care arena.
 
 
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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!

Ken Davenport, President of PerformanceG2, Inc.
Following up on my last post about how Corporate Performance Management will weather the recession, check out this free Webinar from IBM/Cognos entitled “Performance Management in Today’s Economy: How IT Can Help the Business Manage in Troubled Times”.

Here’s the teaser for the Webinar:

“Now, more than ever, organizations need to optimize business performance. To gain a competitive advantage in this tough economic climate, your business users need to have immediate visibility into the performance of the business to make timely, well-informed and confident decisions. Are you able to deliver the information they need to understand how the business is performing, with intuitive applications that let them plan for the future?”

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Ken Davenport, President of PerformanceG2, Inc.
Over the past 18 months the Corporate Performance Management industry has been marked by consolidation — with SAP buying Business Objects, Oracle purchasing Hyperion and Cognos being acquired by IBM.  The result is that pure-play BI and EP vendors have been absorbed by huge, multi-platform technology concerns.

Gartner, the noted technology analysts, published their well-known “Magic Quadrant” earlier this year.  The results show that each of the “Big three” — SAP, IBM and Oracle now have a place in the desired “upper right” quadrant, signifying visonary market leadership with strong execution abilities.

For companies that either have or plan on investing in BI/CPM technologies, having Cognos, Business Objects and Hyperion as a part of Fortune 500 companies is a comfort — particularly in this time of economic uncertainty.  Adding to this, Gartner expects that BI will be a growth area of IT during 2009:

“Gartner’s view is that BI platform revenue will be less affected by the economic downturn than some other technologies because of the heightened need to make better, fact-based decisions — BI is a vital competitive tool of increased importance in an environment where doing business more smartly, in order to maximize share of the reduced revenue in circulation, is a necessity.”

Though IT budgets will continue to contract, smart companies will continue to invest in systems that enhance efficiency and the quality of information available.  It times when headcount is shrinking, being able to do more with less will become an necessity.  Reinforcing this, Gartner expects that areas related to dashboards and scorecards — tools that enable companies to track performance — will proliferate:

“BI platforms are expanding their capabilities beyond traditional query, reporting and online analytical processing (OLAP) functionality, toward providing dashboards, scorecards and visualization as well. We expect innovation and growth to come from technologies that make it easier to build and consume BI applications (such as visualization, search, in-memory analytics, SaaS and service-oriented architecture [SOA]).”

Finally, we will see a continued embedding of financial management tools into analytics typically thought of as BI — such as Cognos’ TM1 will continue to grow:

“Areas that have traditionally been under corporate performance management (CPM), such as business planning and forecasting, are increasingly being embedded with BI capabilities. This, together with a trend of embedding analytics into business processes, will drive further investment in BI.”

All told, investments in CPM and BI technology should continue to pay dividends during this time of recession — enabling more effective decision-making at a time when every decision counts more than ever.

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