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Under the microscope

Under the microscope

An insurance company is collecting vital information, plotting scenarios, and in real-time, acting upon the data. Another organisation is determining the likelihood of an employee leaving their post, and the potential for fraud. Both of these cases have become a reality thanks to the power of business intelligence (BI) software.

BI products are helping organisations manage information, track performance, and graph likely scenarios and outcomes. And while the analytical software of yesteryear has not typically been the sexiest tool in town, it's now capturing a sleeker, more appealing look and feel.

The latest analytic suites allow workers to find, scrutinise and securely share business information across the enterprise, bringing the average company employee into the loop. Some typical applications under the one umbrella include reporting, analysis, scorecards, dashboards, business event management and data integration.

And it's gaining market acceptance. Findings from a recent Gartner global survey of 1400 CIOs found BI was the most highly ranked technology priority. Many planned to increase their BI budget by an average of 4.8 per cent in 2006.

Gartner said licensing revenue for BI was expected to climb from $US2.5 billion this year to $US3 billion by 2009, with the fastest growth in Latin America and Asia. Although companies have spent $US40 billion on ERP, CRM and human resources applications over the last several years, they are now are looking to BI to sift through the reams of data.

Market catches

But there are market inhibitors to the successful deployment and implementation of BI. Limited skills and competencies, combined with a perceived high total cost of ownership and difficulty quantifying the direct business benefits of better performance and improved decision making, will hamper adoption, according to Gartner.

Locally, the BI market was a two-horse race with Business Objects and Cognos battling it out in the trenches, IDC Australia research director, software and services, Tim Sheedy, said.

But with a burgeoning opportunity for BI in the mid-market, Microsoft would rattle the incumbents, he said.

"Cognos and Business Objects are gaining the most market share, but expect to see the biggest threat coming from Microsoft with its new BI capabilities in SQL Server 2005 and Microsoft Office Business Scorecard Manager [BSM] 2005," he said.

The challenge for Microsoft would be figuring out how to work with two different groups of resellers for each product line, Sheedy said.

"There are two offerings, which are complementary, and not many resellers will sell both. So they may be shooting themselves in the foot," he said. "They are dealing with it and are looking at trying to get partners skilled up in both areas."

Sheedy said the local BI market has shown strong growth over the past few years as companies discovered the benefits BI solutions could bring to their bottom line. This would trigger a move towards the mid-market.


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