BI only used by 8%, what is the point

It's hard to hear about the proverbial glass ceiling with the Business Intelligence (and data warehousing) industry. This ceiling acts as an invisible force stopping the industry from moving up or beyond it's current paradigm. Perhaps the holy grail is on the other side; or maybe this is the end. And really there are only two choices: assume the ceiling cannot be broken and live happily or innovate around it breaking past the barrier and into more chaos and opportunity.

Shawn Dolley mentioned Netezza's new blog, Previously Impossible. They quote a survey that shows just over 8 percent of employees actually use BI tools. And this is for BI-using organizations! The article also talks about the inflated usage statistics by BI vendors (they want to show value and sell more user licenses - usage is a must-have metric).

Many people mention the high cost of BI/DW. I wouldn't mind that so much if there was equal value in the results, the ROI. I think any MBA would be hard pressed to find positive ROI with only 8 percent of employees using such a costly system. However, companies pay for large BI/DW initiatives either out of necessity or ignorance.

Let's say it's out of necessity with the mounds of data being captured daily.

Now what. There is a need for information but there is still much pain with BI pre and post implementation. Some vendors will jump on the "low cost" wagon with starter kits, blueprints, configuration tools, cheaper hardware, etc. The problem I hope more people are looking at, the real glass ceiling problem, is addressing the question, "why are so few using BI?"

Look at how many people use Google to research or find information. Google's search success is because it's easy and quick! When my father who is 73 can find stuff that's a testimonial! Alternatively BI is still too confusing for the general employee. Dashboards. Analytical cubes. Reports. Forecasts. Anytime you need more than a few hours training (and re-training when you haven't used it for a month), it's too much. This, of course, assumes "BI for the masses".

So will BI ever get to the ease and simplicity where my father could determine the best deal of potato chips and dip mix combination near his location?

10 Questions with Bruce Armstrong, CEO Kickfire

When you talk with a person who has worked for successful companies and spent time as a venture capitalist sitting on multiple boards, you tend to actively listen to the stories and glean what insight you can. When I spoke with Bruce Armstrong, CEO of Kickfire, it was such a conversation.

Bruce is looking to take Kickfire and disrupt the data warehouse market. Their product, as Bruce put it, helps bridge MySQL (which doesn't understand data warehousing) with data warehousing (which doesn't understand open source). He is now in the midst of a David and Goliath battle with Teradata -- his former employer.

Question: Hi Bruce. Care to describe this battle with Teradata?

Answer: Actually, Tom, we believe the battle is less with Teradata’s existing high-end data warehouse business and more for the vast, under-served data warehouse “mass” market out there. As such, we don’t plan on taking the battle directly to Teradata or anyone else, but rather create a new market by providing affordable, easy-to-deploy data warehouse and data mart appliances for the mass market. The mass market for data warehousing includes rapidly growing small & medium businesses as well as departments in larger organizations who simply can’t afford either their own Teradata machine or in a lot of cases even the charge-backs from central IT to time share on a Teradata machine. So, we hope to be complementary to Teradata, but realize there may be some skirmishes for budget dollars in the market today!

Question: You started as employee #16 at Teradata who boasts Walmart as a customer. Was that your start that brought you to running Kickfire today?

Answer: Yes, I was at Teradata for 15 years, Tom. I worked my way up from programmer to President after we went public and were acquired by NCR/AT&T. I spent almost 10 years in the field working with customers – including Walmart – so I developed a pretty good idea of what they are looking for at the high end. After Teradata, I was GM of the Server Group at Sybase where one of the products I launched was Sybase IQ, the first column-store database on the market. Later, I was EVP of Sales & Marketing at Broadbase – the second column-store database on the market and a pioneer of data marts. Since then, I have been involved in doing due diligence for a lot of the data warehouse startups, including Netezza, Greenplum, and Vertica.

Question: What did you learn from Teradata back then that you are applying to Kickfire today?

Answer: While I learned many things at Teradata that are applicable to Kickfire, the key concept for me was just how different the data warehousing high end is from the mass market. At the high end, once you’re able to break into the market with a new approach, it quickly becomes less about technology and more about services and support. Large customers just simply demand more hand holding. In the mass market, it’s just the opposite. Customers in the mass market expect the product to be highly packaged – easy to buy, install, and manage. They simply can’t afford lots of services and support, so the product needs to deliver high performance in a plug-and-play way.

Question: You have years of history in the data warehouse industry. Care to explain what makes you think the data warehouse industry needs changing?

Answer: While I believe every sector of the data warehouse market is looking for more performance, faster deployments, and lower cost, our goal at Kickfire is not necessarily to change the data warehouse industry but rather to enable more people in the market to take advantage of the benefits that come from data warehousing. Again, we’re going after an under-served market with rapidly growing small and medium sized businesses and departments in enterprises that simply can’t afford Teradata or Netezza. The change that’s required to enable the mass market is to get high-end performance out of a mass-market machine. Kickfire achieves this through our patented parallel-processing SQL chip. In a single chip, we are able to get the performance of dozens of general purpose CPUs. So, in the same way that NVIDIA has radically changed the dynamics of the graphics industry by encoding the graphics processing language in silicon, Kickfire has the same opportunity in the data warehouse industry.

Question: There have been recent acquisitions. Sun purchased MySQL. Then Oracle purchased Sun. Should the MySQL community be concerned?

Answer: We do not think so. We believe that with Solaris, Java, and MySQL, Oracle now has the kind of assets they will need to truly make Microsoft worry. With MySQL, Oracle will finally be able to undercut Microsoft as well as to dominate the high end in databases. As such, we think Oracle is going to continue to invest in MySQL. In fact, Oracle has already proven to be a good steward for InnoDB, the most popular MySQL storage engine they bought several years ago.

Question: About Kickfire, how does this chip technology bridge MySQL with data warehousing?

Answer: MySQL has become the de facto standard for online businesses by virtue of its open source business model and the fact that it has increasingly become production-ready for transaction processing applications. For data warehousing applications, though, MySQL remains very primitive. As such, customers struggle with database volumes as small as 50GB when it comes to reporting and analytics. The primary technical issue with MySQL regarding data warehousing is that MySQL does not have any query parallelization capabilities. This is where Kickfire comes in: using MySQL’s pluggable storage engine API, Kickfire takes over a query from MySQL and provides parallel-processing with the SQL chip allowing queries to run 10x – 1000x faster.

Question: Are you getting any response from the MySQL or data warehouse communities? Are they seeing potential benefit?

Answer: Yes! We have a large and rapidly growing pipeline of opportunities in the MySQL community. One of our early customers, Mamasource, has been using MySQL for years to drive their online community website. However, when it came to analyzing the clickstream data about their community in order to improve the user experience and increase ad revenue, MySQL hit the wall at less than 30GB of data. With Kickfire, Mamasource is now able to run their queries on average 20x faster and up to 600x faster for complex queries. More importantly, Mamasource can now scale their data warehouse to over 300GB, which allows them to increase from just one month of data to a full year.

Question: It's hard to ignore Microsoft. How does Microsoft with SQL Server fit in the Kickfire world view?

Answer: Microsoft and Oracle are the predominant databases in the mass market today. As MySQL continues to penetrate the market (at a rate of 70,000 downloads a day, by the way), Kickfire will be brought into more and more Microsoft and Oracle shops. As such, one could imagine us building more specific features to co-exist with those databases in addition to MySQL.

Question: You spent time as a Venture Capitalist. We won't hold that against you but what are your take-aways from being a VC?

Answer: My time as a venture capitalist was really more about board work than investing. As an operator, the VC firm I was with was interested in my ability to help identify interesting spaces, provide input on business plans and teams, and then work with portfolio companies from a board perspective in order to help generate value for shareholders. A lot of what I did was to dive deep into each function (sales, marketing, development, etc) of the portfolio companies and provide input to the boards (including the CEO’s) on where things could improve. Having served on 20+ boards, I got a pretty good idea of what works and what doesn’t work in start-ups and rapidly growing companies. The lessons I learned were really quite simple:

1. make sure you have a big market opportunity;
2. understand very clearly who your customer is and why they should buy from you;
3. build a very high quality product;
4. regularly assess your market position and look for ways to change the game in your favor;
5. don’t be afraid to tell the truth about the business – there’s always more than one way to create a market leader.

Question: It’s been a pleasure talking with you Bruce. Do you have any additional links or information about Kickfire you want to share?

Answer: Thank you – the pleasure’s all mine. Please come visit us at www.kickfire.com!

Can BI be recession proof

Seems 2008 was a good year for business intelligence companies.  Some of you may not want to read that others are prospering, while many struggle (or at least worry about the future) but business intelligence could be a beacon of light for IT companies.

Here is a small sampling of growth numbers for traditional on-premise vendors that I found.  The article also said the business intelligence market is larger than Forrester's estimation of $8.5 billion.

• SAP Business Objects posts double digit growth.
  
• IBM Cognos reported 12% revenue growth for first nine months.
  
• Microstrategy growth at 8%.
  
• SAS Institute growth at 5%.
  

For many companies, these could look like great numbers in these economic times!  I hope you are apart of this growth in some shape or form.

Then I thought about the numbers (briefly).  Typically B2B sales take several months, maybe 6 - 10 months or longer to complete.  Meaning these growth numbers are from sales initiated in 2007 or early 2008.  Really not when the recession was causing havoc.  So the true test to the resilience of business intelligence will be the 2009 numbers.

"Is anyone looking to buy in 2009?", is the real test.

While growth numbers may or may not be interesting.  What could be very interesting would be to compare SaaS BI company growth with traditional on-premise.  Get the real numbers out there.  Of course, the size of revenues may be apples vs oranges but the percent growth would be interesting, yes?

Here are the 60 fastest growing companies, which SaaS vendors comprise much of this growth.  The link is near the end of the post, if you're not interested in healthcare on the internet.  Unfortunately I haven't found comparable numbers I could use (send some along if you know of any - we could do quick collaborative analysis).

As an aside, I am reading more and more about business intelligence being an add-on to ERP packages.  The first link above mentions the BI market of $8.5 billion doesn't include BI tools packaged with ERP, HR, and customer analytics applications.

I think it's inevitable that on-premise BI's future will be an attachment for ERPs.  Where that leaves enterprise-wide BI, I'm not sure.  Perhaps the value of enterprise-wide BI will be for large organizations with deep pockets to pay for the on-going costs.

If you're looking for emerging bright light technologies, check out:

• predictive analytics
  
• business activity monitoring (or complex event processing)
  
• text analytics
  
• column-based databases
  

Enjoy!

Why the auto industry sells lemons

Let's start the year off with something fun.  And Happy New Year everyone.

I was sent this Calvin & Hobbs comic strip about lemonade stands and business [you can find the full strip below]. After I had a good chuckle, it got me thinking. How often is the 'lemonade stand' used as an example for business? Surprisingly quite a few.

In Donald Trump's "The Apprentice", Donald gave each team $250 dollars to start a lemonade stand. There are 3,233 book results from Amazon for 'lemonade stand'. Countless blogs on the subject -- how to be a Lemonaire and Umpqua Bank funding kids starting a lemonade stand.

However Calvin's lemonade stand highlights well known problems with business. One could apply this to the automobile, financial and oil & gas industries. Companies in these industries are either having troubles currently or problems are looming (of course unless your government simply bails your company out).

What are the problems through Calvin's eyes?

• Stockholders demand monstrous profit for their investments.
  
  
• Presidents and CEOs demand exorbitant salaries.
  
  
• Employees demand high wages and all sorts of company benefits.
  

Not to be flippant using a comic strip from 10+ years ago to emphasize problems with business today but one must admit there is truth in Calvin's statements.

Here's an idea for those who can navigate Web 2.0, mashup, and BI. The SEC is requesting company filings via XBRL and making them freely available online.   What if BI was applied to analyze executive salaries across companies and industries. Or compare financial costs of employee salaries and benefits.

Would there be answers to why the Ford company didn't take the bail out but GM and Chrysler did?

Why would someone do this?

Think of the comparisons that can be done. Comparing trend increases or decreases of salaries. Have union salaries and benefits brought down GM and Chrysler? How does the auto industry compare to the oil & gas industry for executive salaries? Could predictions of bankruptcy be made for other companies because of the comparison made with GM and Chrysler?

[this post used copyrighted Calvin & Hobbs material]

Worst practices, who's got them

Learning from the mistakes of others is the way to go. No need to blaze a new path. It's all been done before. And BI has years of this "experience"; DW has "failures" from decades prior too.

This is backed up by Madan Sheina's article:

• 87% of BI projects in the UK don't live up to expectations.
• 25% of those projects are going over budget.
• Only 50% of end users were satisfied with the BI system

Maybe you're planning to implement BI in your organization. Perhaps you have a BI system but you're not getting the benefits you expect. It's an unruly world in the BI space. Data is a major problem. Tools are another. It's costly and takes lots of your time and effort.

So what are you going to do about it?

You could read Peter Graham's posts about Kevin Quinn's "Worst Practices" whitepaper (saving you from signing up your email address).

Or read the following, which incorporates Kevin's ideas of worst practices but stays away from the marketing of a toolset vendor.

Let's start with the customers, or more specifically the business user. After all this is who BI is meant for. I figure adoption of BI tools is really low. I don't have a specific statistic but I find them difficult to use. People don't have the time to learn a new tool AND don't have the time to understand how to interpret the data.

Apply Tom's Spandex Rule: Just because you can wear spandex shorts, doesn't mean you should! (you know who you are)

Match what the people are asking for and reign in your project team. They can do it all given enough time. A zillion reports. Lots of dimensions, filters, and ranges. However, your BI system should provide what is being asked for. Stay away from the "it would be cool if..." until several years later when people want more.

Ah Excel.

Should you force people away from Excel to use this new BI system? Maybe. Maybe not. Some say Excel is preferred because of it's familiarity and simplicity. Well I think the majority of people who have used Excel don't know how to create a pivot table or know why they should use one.

So in my opinion, Excel is used because it is quick! No involvement from IT. They can do it themselves until it works for them. Typically they are looking to solve a business problem, they just need the evidence.

BI just made their lives a whole lot more complicated. Now they need to write a request for what they want. Then when they get it, it's in this strange BI tool. At which point they copy it into Excel and continue on. Granted they probably have more data than before and cleaner data for sure.

Which brings us to the data warehouse. Yes, a storage area for internal data. What about data external to the organization? Many would caution the use of external sources because of inconsistencies, not having control of the quality, difficulties aligning with the data warehouse, etc.

Let me ask you, "who is the biggest data provider in the world?" Google. What do they do differently? They allow the consumer to determine whether the data is relevant and give them access to everything. They've empowered people with information access.

We need to let it go. The days of the data warehouse or BI team or IT department controlling all the data should come to an end. The business should get access to information they want and need, internal or external, in a BI tool or Excel and when they want/need it.

For instance, Chevron has 200,000 employees worldwide and uses MSFT BI to deliver specific, targeted information to many of them. Starbucks uses Microstrategy to publish in-store metrics to every store manager. Boeing uses MSFT BI to provide manufacturing performance metrics for managers.

These are all extremely large organizations and yet they aren't pushing out tons of cubes, reports, and dashboards. BI is not a central focus for their employees but it does give them targeted information specific to their needs.

Remember Tom's Spandex Rule. Just because they could, doesn't mean they did.

Ben Stein talks about BI

How many funny, engaging stories can someone tell in their first 10 minutes of getting on stage? Well Ben Stein surely approached the limit. Ben Stein has done many things on tv and off, been a lawyer, is a well established economist, writer, and columnist.

However for the MS BI Conference crowd of several hundred, his clarity on the financial crisis drew feelings of frustration over the financial community and government mismanagement. He referred to how the financial community could have used a little Business Intelligence -- and could definitely use some now. His clear chronological overview of how the financial community got into this mess (and brought us along with them) was responded to with claps and a few hoots of support.

Briefly Ben lays out the crisis with this:

1. "It started with the liberals wanting equal housing opportunities for every American."
   
2. "Greenspan pushed interest rates down and then banks couldn't make much money from normal mortgages, so they had to be creative."
   
3. "Banks came up with Side Bets. Basically banks bet on whether or not mortgage bonds would be paid or failed to be paid." -- Yes banks bet on whether you will pay off your mortgage.
   
4. "When house prices fell, costs of price swaps (the side bets) went up. This created such a huge loss that it dwarfed the financial impact from defaulted loans."
   
5. "Side bets are the Weapons of Mass Financial Destruction allowed by the Bush administration."
   

He summarized with "Wall Street has taken trillions out of the economy from everyday people over the years". Needless to say he doesn't agree with the people taking on the risk by giving billions in a bailout package.

Ben Stein also had good things to say but it was clear he was there for his entertainment and inspirational value... a BI tech talk he was not about to do. If you haven't seen him, then he is just like he is on his tv shows, like "Win Ben Stein's Money" and "America's Most Smartest Model".

[Other MS BI Conference posts: ETL World Record and 150 TB Fact Tables and
BI in the year 2020]

10 Questions with Glen Rabie

Being in the finance industry may seem boring to many but in Glen Rabie's case it gave him a unique perspective on the challenges a large financial company was having with their information.

Then a life changing event inspired him to become an innovative entrepreneur. Glen founded a company called Yellowfin where they are all about making it easy for people to get access to information.

Question 1: Hi Glen. So what motivated you to do something about improving the BI industry?

Answer: The light went on whilst working on a large data warehouse project for a global financial institution. The project, budgeted at $30M, only rolled out 300 licenses of the BI tool to an organization of 50,000 employees. This is where we saw the opportunity. Reduce the complexity and cost of deploying BI so that every person that needs access to data and analysis, to do their job effectively, can do so.

Question 2: Let's talk about the market. You had an interesting take on the recent acquisitions of Cognos, BO, and Hyperion. What should we expect to see from them with innovations?

Answer: The acquisitions and the high multipliers paid for them put the new owners in a delicate situation. Their primary concern will be to generate a return on their investment, which to do so will mean that additional investment in those products is likely to be stymied. What we have seen since the acquisitions is a greater focus on rationalization of product set rather than news of product improvements. I think this is what we can continue to expect in the short to medium term.

Question 3: Has Cognos, BO, and Hyperion already won the BI tools market? Is there room for new products?

Answer: The top 5 players only own 70% of the market. This compared with most IT markets, such as the database market, can be considered to be highly disaggregated. As for the remaining 30% this is the growing segment. The BI landscape is changing from the traditional high cost but smaller power user deployments to mass deployments. I do not believe that BO, Cognos or Hyperion have the business model to support this change, both in terms of pricing and deployment complexity. It is this which is creating the new opportunity for vendors of easy to deploy, price scalable and browser based solutions.

Question 4: Interesting that BI doesn't have a gorilla in the market. How does that affect our customers?

Answer: In reality BI tools are a critical piece of IT infrastructure. Making a strategic choice is crucial since not all BI tools are a fit for all business scenarios. Without a Gorilla in the market I think it forces customers to evaluate solutions and make business / technical decisions based on their needs. If a gorilla exists then there is a tendency towards ‘me to’ buying behavior. So the current state of play is actually good for customers.

Question 5: You think that BI is complicated but is making the tools easier to use the solution?

Answer: It is part of the solution. There are aspects that will continue to be challenging – not matter the size of deployment you still have to invest in the design of and build the back end processes to support front end analysis. So in terms of ROI the more users of your BI solution the better. Having easy to use tools that can be rolled out with little to no training to many, who then in turn utilize the BI infrastructure to drive business benefit is key. This is where Yellowfin focuses its efforts – it is not just about being easier to use per se, but also easier to deploy (via a browser), easier to administer and manage security etc.

Question 6: The BI industry promotes methodology for an enterprise view and consolidating across the enterprise (e.g. customers across marketing, sales, finance). Does this make sense for the management team?

Answer: Yes and No. The reality is that even in Global organizations Senior Management and the executive team are primarily responsible for and remunerated on their performance within their area of the business. Consolidating data, such as a single view of the customer may have little to no actionable impact for these Managers (Great for analytical Marketing and Customer relationship Managers).

However, for management having a single consolidated view of business performance is critical. The data may exist in data silos but the delivery and presentation may well be consolidated to provide a global view of the organization. This is a large distinction – consolidation of data versus consolidation of presentation.

Question 7: Where are you positioning Yellowfin in the market?

Answer: Yellowfin is positioned as a viable alternative to the traditional vendors – Cognos, Business Objects, Hyperion etc. Our focus though is purely on the presentation layer. We are not building a BI stack. There are plenty of great specialized BI components for ETL, Budgeting and Forecasting which is not our area of specialization. So for we are driven by developing very easy to use presentation layer which can be deployed for 100s and 1000’s of users. It is in this space that we excel.

Question 8: Should learning to use a BI system be as quick and simple as, say, CRM or even Google?

Answer: Yes – for too long there has been this aura surrounding BI that it is a hugely complex undertaking, but let’s be honest with ourselves – when it boils down to it BI is just charts and tables. Well Ok maybe a bit more complex but the mind set has to change, from being a hugely difficult task to making it easy. End users are becoming more analytical and demanding greater access to data - going forward embedded BI applications are going to be seamless to the end user. They will use these tools almost without being aware of them. For companies are not going to have the time or the capability to train the vast majority of day-to-day users in how to use their BI tools – they will have to be easy and intuitive to use.

Question 9: Where do you envision the BI market going over the next 5 or even 10 years?

Answer: he biggest change in the BI market will be the emergence and dominance of Embedded BI. BI as a standalone application is going to be a very small segment of the market.

Embedded BI is needed to support the 1000’s of organizational information stakeholders. Process oriented workers and customers want access to BI at the point when they need it to complete their tasks within the application that they are using for transactional purposes – they do not want to access an alternate application for their reports and data. It is this area of embedded BI that is really going to make BI pervasive, bite size, tailored to the business process and rich in collaborative functionality.

Question 10: Excellent talking with you Glen. Do you have any additional links or information about Yellowfin you want to share?

Answer: Thanks Tom, it’s been a pleasure. If you want to find out more then go to www.yellowfin.bi.

"I'd rather be wrong..."

The point I've heard a few times is, "I'd rather have a wrong number and work out a way to improve (move forward), than spend hours arguing/debating/analyzing what the right number is."

On one occurrence, a client asked me to sit in a mgmt meeting, while I was helping with their business re-org.

They reviewed departmental financial performance reports and a dept head, my client, disagreed with the result of one measure. Swore it couldn't be that low and below target. After a couple minutes of clenched-fists-in-the-air attitude with "I'm going to find out the right answer!", his senior exec boss speaks up briefly with the quote above (or something like it).

I don't know how you feel about this but I'm sure some of you are cringing at the thought of knowing numbers could be wrong in the warehouse and that you were asked not to find the problem. I could just see the perceived value of their BI solution going straight into the crapper.

However, there is something here worth investigating. In the senior executive's eyes, the value of the "historical" performance report, specifically the poorly performing measure, wasn't the accuracy of the number but the identification of poor performance. It was agreed that the number probably wasn't inaccurate enough to make the measure a strong performer.

[I know, red flags are going up but bare with me.]

Could they be sure the measure was a poor performer? No. To confirm this, it would involve the BI group and department managers/staff to verify. I.e. time consuming.

Are they making fact based decisions? Partially. They are moving into the planning stage based on a poorly performing measure.

Is the mgmt team doing what executives do? Absolutely. They are taking the facts as they know them and making a decision (gut-feel perhaps). But they are focused on moving the company forward.

And here falls one dilemma for BI to overcome.

In this example, BI ended at the report or chart or visualization. There was no integration into the management cycle to continue into planning. I'm not talking about the financial genius building a model to show various projections. I mean the outcomes of planning... tasks, deliverables, goals/objectives, etc. BI only comes back into the picture when new reports are needed.

For me, without better integration into the business processes and mgmt cycle, BI will forever by a reporting tool on steroids.

Another dilemma for BI?

The pain to verify numbers. The time/cost to produce new numbers. Anytime you need to involve your ETL developer or cube/report developer to explain how a number was generated costs time and money. It's not their fault, it's the tools they are forced to work with.

BI needs to move more into the "configuration" space. At least needs to move up a level or two in usability to where application building is today. With all the toolboxes, components, and hosted technology available, I feel that "I" could almost write a Web 2.0 app! (okay a very simple one... maybe).

The point being is the technologist's tools need another layer of abstraction/architecture (okay not sure exactly what to call this) to allow quicker time to value.

Caveat: Now don't get me wrong. I think BI has future potential and can provide value. (now here comes the tough love speech) But BI has problems and poor results are seen repeatedly. I want BI to improve so I'm not picking it apart because I have another agenda; I truly want success. Success through learning and change.

BI costs Fortune 500 millions

I don't normally like to bring bad news up, although the Business Intelligence industry desperately needs a new guiding light. However there is always something to be learned from failures and bad news. Just like the first "F" I received in university... a wake up call for me that kicked me in the ass!

Dynamic Markets did market research, posted by TradingPattern.net and found that "BI failed to impact decision making in US and UK companies."

TradingPattern.net posts about industry risks and value creation. 218 operational execs and front line mgmt were surveyed. Some quick stats for you:

• 76% were forced to make decisions because not all the info was available in time.
• 63% believe that BI reports are simply reference documents used to justify after the decision is made.
• 70% do not receive reports that provide predictions about problems or potential opportunities.
  

Okay, those aren't great stats for an industry that promotes itself as "providing timely, accurate results to make fact-based decisions." A more alarming stat is the cost to companies -- the impact of inadequate intelligence.

$478,868 in lost revenue!

That really hits home for me. That doesn't include the cost to implement a BI solution in the first place. Now if we take a step back and look at the industry. There are a plethora of tools, consultants, methodologies, and training courses but for the Fortune 500, BI is hurting companies more than it is helping.

Now there may be some very valid reasons for this. Fortune 500 companies are large, very complex business with multiple departments all intermingled. They have high volumes of data that BI needs to distribute over a large geography. Plus just understanding their business to build a BI solution would be a tremendous effort. But as my papi would say, "you're giving into excuses."

So if we assume these stats are true and speak to the Business Intelligence industry in generalities, then we should be trying to figure out, in big leaps and bounds, how to make this work. There needs to be a vision... perhaps many visions on taking BI forward. Other software industries have gone through regular change and come out better for it. Isn't it time for Business Intelligence to go through it's paradigm shift?

10 Questions with Simon Tucker and Ron Dimon

Before the Strategy Maps, metric stop lights, and planning/forecasting models, organizations focus on setting their strategy. Of course the meaning of strategy means something different for every organization (Mintzberg's 5P's of Strategy).

However having a formal process is key. Even more important is executing on the strategy. While talking with Simon Tucker (CEO) and Ron Dimon (COO) of Business Foundation, they share how they work directly with senior executives using a tangible, interactive methodology to help management execute on their strategy.

And these guys have experience to share previously holding senior level mgmt positions at CSG, Adaytum, Hyperion and Deloitte. So I want to share their insights because I believe they are onto something that can help many organizations.

Question 1: Hi Simon and Ron. Why do you feel organizations need the Business Foundation methodology?

Answer: Hi Tom, thanks for taking the time to talk with us. Many organizations, in our experience, have a major disconnect between their strategic objectives and what they actually measure, monitor, and plan for. They need a way to see what the true drivers of value are, spread-out across the entire enterprise. They’re tired of all the information silos they’ve built and use us to help them create and validate a roadmap to bring together the people, processes and technologies that will deliver improved performance.

Question 2: How does your previous experience at Deloitte and Hyperion support executive teams when discussing strategy?

Answer: Our company has experience dealing with C-level executives across almost every industry: from Retail, Manufacturing, and High-Tech through Non-Profits, Higher Ed, and Government. And it’s very interesting – even though strategies are certainly tied to industries, we’ve found identical problems across all industries, including things like lack of visibility into areas of the business that matter, a lack of understanding how pulling a lever in one area of the business affects outcomes in another area, and one of the big ones, not having a common business language which hinders making repeatable, fact-based decisions.

Question 3: Do organization need help bridging the gap between business and IT, seriously?

Answer: We hear it all the time! IT uses us to drive-out requirements from business functions (Marketing, Sales, Operations, HR, and so on) since we’re able to have the strategy & business conversation, and the business functions use us to help IT understand their problems and the impact those problems have on performance and results. There is much debate these days about the alignment gap between IT and the business; there are dozens of books that try to address this gap (“I.T. Wars” by Scott, “The IT Value Stack” by McCormack, and “Geek Gap” by Pfleging to name just a few). A lot of people talk about it, we actually have a proven methodology to bridge the gap.

We become IT’s “True North” – the long-term solution vision into which they are implementing short term initiatives, and each of our recommendations is validated and justified by the sponsoring business unit, so the entire business has a common solution vision (not one for IT and one Marketing and one for HR and so on).

Question 4: Would you agree, executing on strategy should include processes AND technology?

Answer: Definitely. In fact, when we connect strategy to execution, we focus on the intersection of people (and their role in the organization), process, technology, and data. We also add another dimension of strategic ‘enablers’ to the conversation. This includes the concepts of depth (how far down into the details do you need visibility), horizontal alignment (among the business functions), accountability, and compliance.

Question 5: Without giving away your corporate IP, how do you have conversations on strategy with senior executives? Any special tools?

Answer: That's what makes us unique. In two hours, with no PowerPoint, no laptops or projectors, we have a very rigorous interaction with one or two executives at a time (sometimes we can make three work). The interaction is a business conversation that takes what's already in the executive’s head, his or her unique perspective on the business and what drives value, and puts it all onto one sheet of paper. The 'special tool' is the sheet of paper. We start with our Periodic Table of Business™ database (with over 1,500 KPIs, metrics, measures, and processes – organized by industry and business function) which generates a baseline picture of the business as a matrix: functions and layers. We then tailor the sheet to fit the individual client before we get into the first meeting. So the executive sees their company laid out in a way that makes documenting what’s in their head very simple. And it invariably leads to new insights for the executive. We even had one CEO tell us "it was like being on the psychiatrist’s couch for 2-hours!"

Question 6: Can you help explain why there are so many acronyms for performance management (i.e. BPM, EPM, CPM, xPM)?

Answer: Lee Geishecker of AMR Research coined the term "Corporate Performance Management" in 2001 when she was with Gartner. It was the confluence of business planning with reporting, business intelligence, balanced scorecards and other areas. Hyperion, right after the Arbor acquisition, adopted this concept by bringing together their analytic applications (planning and financial consolidation) with their OLAP engine (Essbase) and later Business Intelligence (from the Brio acquisition). They chose the term "Business Performance Management" to extend the concept out of head-office ("corporate") and into the lines of business. It's a bit unfortunate that there was confusion between that BPM and the existing Business Process Management acronym. Cognos was hot on Hyperion’s heels and kept Gartner's CPM acronym. From there evolved Deloitte's IPM (Integrated Performance Management) and others. Today Oracle and SAP have decided on Enterprise Performance Management to extend the scope even further. To avoid the confusion, we’ve been calling it xPM, the "x" can be any letter you want – the acronym isn’t as important as the value proposition of end-to-end management of performance and getting from strategy to sustainable, predictable execution.

Question 7: Would you say "what-if" modeling is part of Business Intelligence or do you see "what-if" analysis done differently in organizations?

Answer: Business Intelligence has traditionally meant operational and financial monitoring and analysis. xPM (or EPM, BPM, CPM if you like) includes the "what if" modeling component and blends it with BI. So now what matters is that you can model an infinite number of scenarios (what happens to cross-sell and cash flow if I divest this business? What happens to customer acquisition rate if I invest more in sales training?). We see some organizations limited in their what-if modeling and analysis by their systems – some use their ERP for this and get stopped very quickly. This is where xPM on top of ERP makes sense.

But even more importantly, are they modeling and analyzing the right things in the first place? Companies should be modeling and analyzing the key drivers of the business that can deliver the most material margin, revenue, cash flow, market share, or whatever their strategic imperatives dictate.

Question 8: I've seen many organizations with planning cycles that execute on the plan but don't take the time to reforecast. I think you would call this the opposite of "The Learning Organization"?

Answer: Close. It goes beyond re-forecasting. We think organizational learning happens when you not only go back and re-forecast (and/or use a rolling forecast), but you also capture the underlying drivers that caused the shortfall or exceeding of the target. Then make sure those drivers are plugged into your models along with the assumptions and constraints for each driver. Making your models smarter and connecting them to your plans and forecasts gives you better predictability (forecast accuracy, for example) in the business.

Question 9: Would you recommend your methodology for high growth industries and organizations that constantly go through change for competitive adjustments?

Answer: Yes, certainly. The companies that get the most value from our method are those that want to make sure they're measuring, monitoring and planning for things that can have the most impact in their business. They want to leverage their investments in IT, ERP, and performance management systems. They want a way to prioritize initiatives that are in line with their strategy. It's always about the right balance. For high-growth industries, it’s about the balance between expanding scope, geographies, and markets without sacrificing quality, margin, and cash flow. For companies that need to be agile enough to respond to competitive pressures, it's about the balance between innovation (pricing, product, and business model innovation) and standardization (in processes, systems, and brand).

We also recommend our method for organizations that are facing increased pressure from the recent economic downturn. You may not be immune to changes in the economy, but you can strive to outperform your competitors. So are you modeling price and price mix? Are you forecasting average selling price? Are you performing profitability analysis by customer and product? And of all your IT initiatives, which should have the highest priority?

Question 10: Excellent talking with you both Simon and Ron. Do you have any additional links or information about Business Foundation you want to share?

Answer: Thanks for taking an interest in our company, Tom. Readers can find out about us at Business Foundation and can read about our take on xPM, strategy to execution, IT/business alignment, and other topics on our blog (http://businessfoundation.typepad.com/).

Microsoft leader in execution

I'm sure you've heard the Gartner quadrants are out again. The BI vendors are graded and ranked according to Gartner criteria. And as you can expect, vendors want to be high and to the right.

This year Microsoft is a leader in platform BI and ahead of the pack for "ability to execute" on the BI vision. This means Microsoft has the competitiveness, success from it's BI products, investment in BI, and can execute on it's pricing model.

Tidbit: Did you know Microsoft spends $6B (with a 'B') company-wide on research and development annually?

And it's pricing model... which I have to say is aligned with the BI industry's goal: deliver BI for the masses. No longer will an organization have to pay hundreds of thousands of dollars on licenses -- this is a cost prior to building anything for end users! Microsoft's model flips the traditionally expensive licensing model upside down.

Plus Gartner thinks Microsoft's PerformancePoint Server is coming to a desktop near you. Aimed at the mid-market and above with a CPM focus, Microsoft's BI stack integrates well with it's integration engine (BizTalk), Office products, and portal software (Sharepoint). What else could most organizations need?

And if you're interested, here are the Top 10 benefits of PerformancePoint Server from Microsoft's marketing department.

Okay, there are a few short comings but which vendor doesn't have them. One being a not so competitive data mining story. I view this as a small portion of most organizations, so I shall not dwell. The second is how they intend to deliver their BI products to customers -- through a partner community.

Yes, Microsoft isn't interested in implementing their own software, unlike Cognos and Oracle. They want to educate and train partners to do this. Today the downside is the limited choice of BI Systems Implementation partners.

The huge upside is when more partners come on board, watch out. These partners will have the collective brain-power to Outsmart, Outwit, and Outlast (yes I watch the Survivor series on TV) any in-house services group from the likes of Cognos, Oracle, etc.

So I like the Microsoft model and their products and expect to see them competing along side the other leaders that are high and to the right.

The "Platinum Rule"

From my Who's Better: Business or IT debate, I received feedback, some strongly opinionated, from people with examples of CIO's as successful sponsors/leaders of BI initiatives. I have several examples myself.

And Frank Buytendijk's rebuttal (kudos on taking the high road, Frank) shares his Platinum Rule ("those with the knowledge and experience, make the rules") and thoughts on organizational maturity. I can appreciate his statement that "the only project approach more disastrous than the IT-driven project, is the business-driven project."

While this debate on the success of IT or business driven projects is healthy, I feel we're missing something. As most leadership books will say, a good, strong leader is important but the people on the team are the ones who make it happen. Regardless how well a leader can motivate, the results are capped by the capabilities, skills, and experience of the individuals and the team as a whole.

As Jim Collins (writer of Good to Great) says, "Do you have the right people on the bus (the wrong people off the bus) and the right people in the right seats?"

This is the job of a leader... or at least it should be.

The job of the team, especially when talking about BI, is to reach for that higher rung and be the best at what you do -- architects, developers, business analysts, power users, report writers, quality assurance specialists, testers, project managers, and the list goes on.

While I think good leaders are required (great ones are hard to find), it is up to the individuals on the team to make their BI project a success. Have water-cooler conversations, share ideas, and learn from the best (and each other). Push for a team culture where you can bring your ideas to the group -- uncriticized. Freely research ways to improve your BI system -- remember the goal is information to the masses.

Okay back to the question of "who's better, an IT or business driven project"? After leaders sort out the bus and seat question, who's going to deliver BI success for your organization? I firmly believe it's not just the technically-minded people but all the people who know what is needed for your organization... from those with knowledge of the content required by the management team through to those with experience of core software functionality.

I would say without the emphasis on the team delivering BI for your organization won't reach it's full potential. Then "success" becomes only a thought dreamt up at the beginning of the initiative along with the Project Charter.

The SEC side-steps BI

Could the SEC be side-stepping business intelligence forcing companies to report financial data in an XML standard? Or could this turn into the investor's version of "financial intelligence"?

The SEC launched an XBRL-based online tool that allows investors to extract, compare and analyze executive compensation for large U.S. companies. This tool is so important to the SEC that they are pressing to mandate it as a requirement for all companies to post their financials for investors to view.

Investors can do analysis and reporting on companies to determine investment worthiness. And the best part, no Data Warehouse required.

Business Need: Ensure financial accuracy - In recent years, regulatory reporting requirements prescribed by new legislation, such as the Sarbanes-Oxley Act in the United States, have raised the importance of reporting accuracy and transparency.

Companies are forced to produce a public BI system, of sorts, hosted by the SEC.

Microsoft: As we know, MS Office Word and Excel have long been used to help compile, report, and consume financial information. Together, XBRL and Microsoft Office hide the complexities and shoot for wide-scale adoption in the financial community. Microsoft has a considerable lead in the market as financial people are very familiar with Excel.

With SEC's XBRL, contextual information is stored, while the language and accounting standards are irrelevant.

What is it? Extensible Business Reporting Language (XBRL) is a worldwide industry standard for the publishing, exchange, and analysis of financial reports and data based on the XML language. The XBRL technical standard is being developed by XBRL International, a not-for-profit consortium with 200+ members worldwide.

So where does this leave you if you're managing BI and your CFO needs to produce these XBRL financial filings? Most likely the financial department will want to export directly from their financial system. In my mind, this would break BI's one shared truth concept for an organization. Or does it?

This boils down to what BI is today and what BI can do for an organization in the future. Today, SEC filings may not be your BI system's mandate. In the future, BI needs to expand it's definition. Should it always include ETL and a data warehouse? Or should BI focus on delivering content throughout the organization and to external partners or customers? I think the later.

BI has potential but is rot with problems -- failed projects, high costs, low returns. Some organizations have made BI very successful. The US Veterans Affairs is one of the largest Microsoft Analysis Services deployments in the world with a profound cost savings of over a billion dollars! Now that is successful BI!

So you may want to consider how XBRL should be apart of your BI system using an overall mandate of providing content to the masses. As for XBRL, couldn't they at least come up with a friendlier acronym!?

Strategy & Leadership in January 2008

I came across Erin McCune's post on Leadership is Critical to Project Success on the Forte Financial blog. She references an earlier post of mine on Business vs IT (appreciated) but I would have to say she adds a more important educational component.

Thanks, Erin, for sending out that January 2008 Harvard Business Review is dedicated to Leadership & Strategy. Some of the HBR topics below could be interesting... guess I'll find out when I start reading on the weekend.

• The New Leader's Guide to Diagnosing the Business


• How Star Women Build Portable Skills


• The Existential Necessity of Midlife Change


• The Experience Trap


• The Founder's Dilemma

And just before I left Erin's blog, I saw her latest post on XBRL tools making reporting easier. The tool she references "maps data stored in separate systems and proprietary formats into XBRL so that it is easy to share for reporting and analysis". Excellent idea for using an open standard.

The tool by Enterprise Engineering, Inc, is an XBRL-based analytical tool that makes it possible to compare a company’s income statement, balance sheet and other financial reports to peers and industries.

However, hard to find BI vendor tools that use the XBRL standard in a non-proprietary way.

Who's better, business or IT

I recently consulted on a large government project where the project sponsor was the CIO. There were only two people above him before you step into the land of 'professional' politicians. This CIO was savvy, smart, and needed to build buy-in from multiple stakeholders (Chiefs of Police... a difficult breed comfortable with conflict) to make this $100M project a success. You may ask how one could not be successful with that kind of cash on the table... but it happens... a lot.

I can think of failed project examples. Specifically I'm thinking of 3 projects in the last 6 years done by large consulting firms (ie. the IBMs, EDS', Accenture's of the world), where failure cost tens of millions of dollars with little or no results. Much of this was your taxpayer money hard at work by the way.

So what makes an unsuccessful project?

Some potential culprits are: technology issues, budget constraints, timeline constraints, user adoption and leadership can contribute to failure. However, leadership stands out the most for me. A leader or project sponsor can make or break the project. They give direction, remove political roadblocks, manage the money... and significant issues escalate to them for final decision.

They have lots to answer for. However let's divide sponsors/leaders into two groups: IT and business. IT sponsors may be the CIO or IT department head. Business sponsors may be CEO, CFO, or VP of a line of business. BUT...

Who makes a better project sponsor and hence best to run a BI project?

(I'm pro-business for this open debate expecting you bloggers and readers out there to provide sharp contrasts and opinionated rebuttles... and support, of course. [Bell ding to begin the round.])

Let's begin with the fact that organizations typically don't have the CIO at the decision-making table - sad but true (oops, I'm pro-business). Okay don't you think this can hinder success if the IT sponsor does not have the backing of the CxO's office? You betcha. Because, let's remember, it's the business who holds the purse strings. And the golden rule is - those with the money, make the rules.

But even without making the rules, business knows what they want and need from BI - simply gather the user & information requirements and ensure IT makes the technology happen. The misconception that IT makes is "if we build it, they will come" -- the value would be so obvious users would clamor to use the BI system. Not true without the business showing IT what they want.

So is it obvious that business sponsors should lead BI projects, especially since BI is for the business? And where do CIO's think they can do a better job? (By the way, the police project I mention above is in progress, so I'll let you know how it goes for the CIO.)

Acquisitions bad for customers

In the short term at least. Acquisitions can kill R&D funding and unfocus company direction during the internal integration process. Then there is all the time and effort spent on a new company message announcing the "new" product and service offerings - marketing, architectures, training.

Thank you Fayu for sending in this IT Week article about acquisitions in BI will stem innovation.

As well, it could be that during the Oracle, SAP, and IBM acquisition/integration efforts, it may create a vacuum while these big three BI vendors (geez I guess they are now) focus on internal integration. This downtime vacuum may open up a space in the market for the entrepreneurially minded. I hope it does!

Sure business for the acquired (BO, Cognos, Hyperion) will continue to sell licenses. However I agree with the article that behind the scenes people are going to be pulled into committees, working groups and potentially let go, okay, re-shuffled.

This all equates to not pushing the envelope nor being laser-focused on customer needs and the competition. Unfortunate for them... Opportunity for others!

Who's Next

Who's next in acquisition fever?

Yes, there is already debate on who's to be acquired next. I guess it could be the natural progression of things but more likely the herd mentality is cropping up. I know, I know, BI is hot right now.

But like speculators on the stock exchange who drive prices up, make their money by selling at the top, and watch the prices fall on those unaware investors... aka us normal folk who are just trying to make a buck...

I've noticed attention being focused on the remaining tier 1 independent BI vendors - but I don't want to jump on the propaganda band-wagon for companies that didn't really standout before. Not meant as an insult but there are excellent reasons why Cognos, Business Objects, and Hyperion were acquired first (I would also include Microsoft with these best of breed companies).

Then I read the typical "watch for the up & comers" called tier 2 vendors. I believe both these tier 1 & 2 vendors should all be considered either "up & comers" or "been-there-and-done-that'ers".

The question is, if we sober up from our high on acquisitions, down deep in places we don't mention in polite company, "do you really feel the need for the industry to continue consolidating?"

I think not! Any acquisition now would come across as a follower in a sea of leaders. I may exclude acquiring SAS from that list, although there are post-acquisition, merger problems with a privately owned company such as SAS.

Alas where people, investors, acquisition-hungry companies should focus their attention on are innovative, thinking-out-of-the-box companies, technologies or people that will shift BI away from lengthy, costly implementations; allowing BI to permeate throughout a company delivering on the "BI Promise"!

Otherwise BI will be downgraded to simply a component or attachment to an ERP initiative, perceived as the second-cousin, something we will do later after the "must-haves" are complete. You know, similar to what operational reporting is today. There are winners to this downgrade... IBM, SAP, and Oracle's of the world win by having a complete solution to offer, where customers can go shopping in one place for everything they need.

Another word for this... WALMART!

And how do you compete with Walmart? Carefully, not head-on and not on price. Luckily IBM, SAP, and Oracle are not selling cheap commodities - their prices are high. In stark contrast, Microsoft's licensing model is built for growth... huge growth.

So where does this leave us as customers, consultants, and practitioners? With options.

As competitors consider how you will be competitive within this consolidated BI world.

As customers consider how you will win with either the Walmart's or the up & comers.

And a final up-lifting note on market change for up & comers. A market that is squeezed into a corner has high magnitude potential for paradigm shifts and innovative ideas to alter the status quo... sometimes in a significant way!

Here's a TED video of Larry Lessig telling 3 great stories of change.

Final acquisition - IBM

The story has hit the airwaves. One of the more obvious acquisitions in recent months completes the trend that has taken place in the Business Intelligence industry for several months/years now.

What this means for the industry specifically is too hard to tell at the moment. So as a CIO or business manager will you jump for joy or go running for the door.

IBM acquired the Canadian-made Cognos yesterday for $5 billion. This Wallstreet Journal article states Cognos is No. 3 in the BI industry following SAS (No. 2) and BO (No. 1). The IBM price is slightly less than SAP's BO ($6.78B) and more than Oracle's Hyperion ($3B).

Some may say IBM's hand was forced with the industry consolidation by competitors Oracle and SAP. However I think the IBM-Cognos deal was in the works for some time.

Cognos and IBM have 'played' together on large government projects. IBM tested Cognos tools in their performance lab. IBM and Cognos have done joint whitepapers. IBM consulting services has people focused on Cognos. I think the writing was on the wall -- just when and how much.

Plus you don't make a $5B decision in cash over a couple months because of pressure from your competition. At least I couldn't (my cheques don't have the space to write that many zeroes).

Overall:

IBM is known for going after the "big and scary projects that no one can do" -- in IBM's words. Cognos is known for selling to large companies and governments. Probably a match made in heaven.

But let's take a step back for a moment. We know the acquisitions of BI companies will change the landscape of the industry. BI could simply slide into being another component of ERP vendors. Or BI may continue to stand on it's own as a business improvement driver by gauging performance.

The big picture question is, "with independent BI companies gone, where will BI go?"

Just like most acquisitions, the ecosystem of toolset vendors, consultants, customers, and 3rd party vendors can change dramatically. How? I would like to think our drive to improve BI for the betterment of organizations and people is the underlying goal. But that may get in the way of profits, selling licenses, and implementing large BI projects because they can.

Don't let them tell you "nothing will change; it is status quo" -- it will change.

Don't let them tell you "more benefits exist by being acquired" -- there can be huge drawbacks.

Don't let them charge more because "IBM, Oracle or SAP specialists are doing your BI" -- the business problem and expertise have not changed.

Don't let them tell you "this is the only way to do BI" -- get a second opinion from someone independant.

And welcome to the confusing jungle of seriously large companies where BI is just one line item on their financial plan.

The role of business vs IT

Business Intelligence crosses both the business and IT boundaries -- unfortunately for some it is seen strictly as an IT initiative. Frank Buytendijk's post makes an excellent point: "you are not delivering 20 reports", you are helping "business users make really good decisions".

Check out Frank's blog site (he is the VP of Corporate Strategy at Hyperion/Oracle), *new* since Oracle's acquisition of Hyperion.

He goes on to say how the business has bargained (actually leveraged) themselves to the point of 'no responsibility' for initiatives that involve IT support. IT writes the business case for a system to improve the business. IT is responsible for project deadlines and budgets. And who has to live with the results?

The Business.

So wouldn't you want more influence, control, and input into something you have to live with for years, maybe a decade? When I want a vehicle to drive, I don't ask the mechanic to find one for me. Although I'm sure the car would be great under the hood. Because maybe I want my unique style, colour, prestige, the right growl to the engine. Aesthetics. Generally not a mechanic's forte.

So why rely on IT to be responsible for your system's initiative.

Saying that, IT brings much to the table. Such as, people who know what is technically possible, IT project managers, and support staff to keep the lights on once it is built. What they don't bring to the table, which you can, is this:

• Business knowledge and how the business really works.
• What information is important to you.
• How you want to measure your business.
• How a system should improve your processes.
• How a system impacts the bottom line.
• Senior business executive sponsorship.

IT initiatives that only have IT support and little business buy-in is doomed for failure. Maybe not the day the system is released; but months down the line when the business realizes the system doesn't meet their needs.

10 Questions with Steven Schneider

I work in an industry where the potential to provide value to a customer is great; and equally great is the potential for new innovations in technology and business models. Steven Schneider is doing both - innovating within the BI industry and providing value to customers. He does this as President of OnDemandIQ Inc by using their unique SaaS BI approach and unlocking the data companies have in a valuable way.

Sending your data to an external company to be properly hosted and delivered securely back to your employees is just one benefit. Steven shares 10 more excellent reasons to utilize SaaS BI for your organization.

1. Question: What really differentiates OnDemandIQ from other SaaS BI companies?
   
   Answer: First, ease of use. Second, we provide a low cost of entry.
   
   The primary users of our system are business users that have very basic needs – reports with real-time data, a dashboard that tracks the 4-5 metrics they care about, and some drill down/analysis capabilities. While we have more sophisticated capabilities and configurations, these can all be hidden by the administrator so as not to overwhelm the end user. There is one client we are working with for example that was able to setup their data feed, add their users, create 4-5 frequently accessed reports and a full graphical dashboard for their management team in just a few days. Before, they had an analyst that was manually creating these types of reports every time they were needed.
   
   Our application also has a low cost of entry – with per-user pricing and base subscriptions starting at just a few hundred dollars a month. This allows organizations to start small before making substantial investments.


2. Question: How do you help clients use BI to become more competitive themselves?
   
   Answer: In a general sense it is all about unlocking the information contained in the data they already have. Now that is a pretty general claim – but what is different about our approach is that we focus on getting the information to the person on the front line that can change their behavior or take action. All too often BI implementations give analysts the capabilities to really dig into the data, but something becomes lost on the way to the person that does something with it.


3. Question: It is a well known challenge/goal to have BI proliferated throughout an organization. How are you being successful in this area?
   
   Answer: In my experience these types of initiatives often fail because they try to do too much – envisioning that all of their business end-users want all of the complex slicing and dicing capabilities. What we’ve found is that in many cases, the end-users want to look at very specific metrics and/or slices of information, and they don’t want to hunt around to try and find it.
   
   We’ve had a lot of success with sales organizations in giving each user a pre-configured dashboard that reflects the metrics they care about – the ones they are paid on, and a set of 4-5 reports that they need to do their job. Everything is pre-set and configured for them so they can get in, get the information they need, and get out.


4. Question: What do you see as the biggest hurdle for SaaS BI or even simply the BI industry?
   
   Answer: A major hurdle for BI SaaS vendors is that BI is in some way or another, inherently custom. It only really works when integrated with the data, typically from multiple sources, that a company generates. Many of the traditional BI software vendors really just sell toolkits that I.T. departments and/or consultants use to construct a solution. SaaS vendors are really just now trying to find the right mix of static software vs. consulting customizations.
   
   For the BI space as a whole, the threat from existing players is really cannibalization. The small-mid market has been, for the most part, ignored by major players because the licensing price point necessary to serve this market is too low and would threaten the business from their existing customers. With gaining popularity of SaaS catering to this market at a reasonable price point, there will be a growing threat from smaller companies, in particular SaaS.


5. Question: What made you start on this business endeavor?
   
   Answer: We started as a consulting company to the life sciences industry – and what we saw was that sales representatives were overwhelmed with data from different systems, covering different time periods, etc. We saw a real opportunity to distill data from multiple places into actionable information that sales representatives could actually use.


6. Question: What are three significant benefits SaaS BI and hence onDemandIQ provides customers over traditional BI?
   
   Answer:
   
   
   • Easy to Use & Setup
   
   
   • Low entry point with limited risk
   
   
   • Few I.T. requirements


7. Question: Are companies concerned about hosting their data outside the firewall? How do you address concerns in this area?
   
   Answer: This is usually less of an issue than you would expect. Many of the companies that come to us are already distributing information to business users in various geographies, so the data is already out there in excel spreadsheets on laptops, personal databases and on emails. Having the data hosted in a security facility with proper authentication, access logging, and encryption is a step in the right direction.


8. Question: You mention wanting to meet "80% out of the box". Care to explain?
   
   Answer: We provide many of the high-value BI capabilities that small-mid sized companies desire – such as ad-hoc reporting, dashboards, and simple analytics out of the box. We have a generic, flexible data model for data such as sales transactions, accounts, and activities that can model many different types of data sets and provide a whole host of custom metrics. Most of our clients are sales organizations, retail, or manufacturing.
   
   While taking this more generic approach allows us to offer a more cost-effective and easy to setup solution to a wide range of customers, it does mean that we might not be a fit for clients with very specific and unique needs.


9. Question: Where do you see onDemandIQ going into the future with the SaaS model?
   
   Answer: I think for us, and for the industry as a whole, you will see a blending of the lines between what is software and what is service. In most cases the ‘Problem’ that BI is solving is a lack of access to information and that requires two parts – access and analysis. While we address the first part of the problem, we only partially solve the analysis piece by providing tools that people can use. There is still a missing piece that requires a human element for more sophisticated analysis.
   
   For example, for clients in the Life Sciences vertical we have taken on the role of an outsourced analyst function, providing services in the areas of forecasting, compensation, and more advanced analytics. It is all about solving the problem, and the mechanics really don’t matter.


10. Question: Excellent talking with you Steven. Do you have any additional links or information about onDemandIQ you want to share?
    
    Answer: Sure – I’d suggest the following links:
    
    Article: Hosted BI: New Options for Small-Medium Businesses
    
    OnDemandIQ: http://www.ondemandiq.com/