Although most companies more than understand the importance of leveraging IT to put crucial corporate information at employees' fingertips, the idea of analysing that information to make effective business decisions is not as pervasive. One key element to analysis is having a data backbone where information is consolidated, distilled, and made easily available to users. Enter companies such as Informatica, which is pitching its data-integration platform as just such a backbone. IDG's Cara Cunningham recently caught up with Informatica CEO Gaurav Dhillon to discuss the latest trends in business information.
IDG: What are some of the data-related issues customers are wrestling with today?
Dhillon: The main issue is that people are constantly throwing new systems at a problem. Our view is that without business insight, you're flying blind. You can't steer the ship of commerce without some navigation in place. Now [customers are] putting in [things such as electronic] business systems . . . but they're making decisions in a vacuum, and they don't really know things about their customers. There's a need for data integration, and a consolidated platform to provide information.
The view we've taken is that without business insight, you might be investing more and more dollars and not getting payback from it.
What exactly is business insight?
It's all about smart decisions - decisions related to the right mix of investment initiatives to grow one's business. As executives turn their attention increasingly to top-line growth, the need for greater business insight becomes critical. To gain business insight, companies have to figure out how to get access to a variety of information sources in their enterprises - most of them are operational and run from one accounting period to another - to integrate them at the business level, and then make the consolidated information accessible to business analysts and knowledge workers.
Does a company need software to do this? Can't it do this itself by knowing its business?
There are two reasons [why companies can't]. Systems are typically meant to run and then flush out after 30 to 60 days, depending on accounting requirements. And typically, information is on different systems: inventory might be on a mainframe, financials on client/server, and now e-business, which is yet another genre of huge investments. There is no way only one vendor has the answers. The true insight into how things work - providing data integration - is how this is overcome.
How do you define data-integration products?
The platform is two things. One is PowerCenter, which is a data-integration hub in a central place, and it manages the spokes, which are line-of-business data marts that are run through PowerMart. They are points of access to analysis. We believe there's a huge opportunity in data integration - that's really what our products do.
One could argue that your products, while crucial, are expensive and complicated. Do you hear that from your customers?
Not a lot. What we're finding is that we are filling an existing need. In very large companies, the reason we are growing so well is that the need exists. In a sense, the products pay for themselves very quickly. There's ROI [return on investment] on productivity alone. And when you look at the value you get from really using insight to grow a business, it compounds the return many times over. Our products are something people sign up for quickly because they are filling a need.
Are any particular Informatica customers taking advantage of business insight?
One that comes to mind is a company called Owens & Minor that distributes medical and surgical supplies. They have used our products in a way that's very innovative. First they built a system to analyse how their products are doing. Then they said: "The ROI is great," and turned it into a profit centre. Now they are able to use this insight to negotiate better contracts with suppliers, and also charge them for insight. The distributor really knows the behaviour of the buyer, so the distributor shares the information with the manufacturer. In a way, they're selling insight.
What are the next big trends in data management?
I think it's going to be really busy with supplying insight for a while. Beyond that, I see people really being able to use this insight in shorter, tighter loops to make decisions.
Do you see business insight becoming available to more people in an organisation?
Absolutely. The Web is doing that. In the past, you had to be a spreadsheet [expert] to use insight but now with the Web and the ability to really go out and slice and dice [information] and use a thin client, it's going to come down the pyramid. You'll find knowledge workers using this, and down through the supply chain you'll see this spreading and proliferating.
You've formed some fairly strategic partnerships recently, such as the alliance with PeopleSoft. How did that come about?
We've been talking for awhile about how great the need is to be able to put in a backbone or various analytic information that's out there, so we're pleased that PeopleSoft made a decision to go with our platform.
How important are partnerships?
They're extremely critical. We see that we have a strong leading position in this marketplace, and the way to continue to grow is to have strong partnerships. Last year we announced one with SAP - PowerCenter was BAPI [Business API]-certified to support SAP's Business Information Warehouse. This was a very strategic announcement for us, since it was the first time a major ERP player validated our software platform as enabling technology for analytic applications.
And now we're partnering with PeopleSoft, which is a partnership as well as a strategic technology licensing of the product.
In addition, over the past two years we've trained well over 1000 people at consulting companies in our products so they can be out there as systems integrators, etc. So there are a lot of friendly gravitational forces helping you out there. It's critical for a small company growing big. That's the way you do it.
Is it possible to have detrimental partnerships?
If you do short-term partnerships, they can be bad for you. At our company, we do long-term partnerships.