The BI Outlook: A Bright Spot of Growth in a Gloomy Economy

Maria Verlengia, CRM Buyer writes:

Even though the general economy may still be limping through a recession, business intelligence isn’t generally feeling the pinch — in fact, it’s actually growing. Companies are in need of ways in which they can make sense of the data they’re dealing with, and now may be the best time to invest.

One business sector weathering the current economic downturn is that of business intelligence (BI). In fact, Hans Hultgren, director of the Data Warehousing and Business Intelligence program at Daniels College of Business, told CRM Buyer that business intelligence is growing and will continue to do so.

“The industry has not been impacted as much by the recession,” said Hultgren. Business intelligence, he predicts, will become a core IT component. “I think it’s growing. The field itself is definitely growing.”

In particular, Hultgren has noticed growth in operational business intelligence and a demand for audit-friendliness. Audits need to be able to support business intelligence. He also sees an increased demand for the integration of unstructured data.

“Maybe 80 percent of corporate data is in unstructured formats,” Hultgren estimated. Although there is a long way to go in that area, he said companies are definitely looking at how to integrate unstructured data. Hultgren also sees growth in master data management initiatives and the appliances sector.

Invest Now

Hultgren advises companies to consider investing in business intelligence solutions now, even if they are working under tight budgets. Prices for services are currently very competitive, making the present period an especially good time to invest in BI. “There are lower prices for sure,” he observed.

Investing in business intelligence is important for a company now more than ever, agreed Bill Barberg, president of Insightformation and an expert in Balanced Scorecard methodology. Sound business intelligence helps companies make fact-based decisions as they try to navigate in today’s stormy economy, he told CRM Buyer. “Business intelligence can help companies make much better decisions,” he said.

Rising Field

Companies are beginning to recognize this, and business intelligence is a rising field. Dr. J. Michael Hardin, senior associate dean at Culverhouse College of Commerce and Business Administration, told CRM Buyer that he has noticed increased interest from companies in recruiting students with business intelligence expertise. “I’ve had quite a few phone calls from companies wanting to hire students,” Hardin said.

This is due to rise in demand from companies searching for a smart way to leverage their dollars and to guide their strategy, he said. They want a competitive edge during the recession, Hardin remarked, adding that he sees a higher demand for data-mining people and graduates with knowledge of statistics.

Hardin recommends hiring candidates with a good business background, sharp analytical skills, and an understanding of why business intelligence is important to a company. Future business intelligence professionals should also develop these qualifications. “Learn how to think with data,” Hardin advised.

Business intelligence has matured as a field, Barberg added. The experts in the field are seasoned professionals and know how to avoid mistakes. The knowledge these experts offer is just as valuable a resource as business intelligence systems, Barberg pointed out.

“The people are as important as the tools,” Barberg explained.

Cloud Computing and Virtualization

Cloud computing is making an impact in the business intelligence field, Hardin has notice. Both cloud computing and virtualization hold promise for business intelligence. “That’s a growing development. It’s going to make the tools more available,” he stated.

Cloud computing is an important trend in the business intelligence field, Hultgren agrees, seeing it as part of a broader industry trend rather than something specific to business intelligence. “There’s a lot of discussion about cloud computing,” Hultgren said, and there’s growing recognition of Software as a Service.

Major Players

Large database and software companies such as IBM (NYSE: IBM), SAP (NYSE: SAP), HP (NYSE: HPQ), and Oracle (Nasdaq: ORCL) continue to be major players in the field of business intelligence. “And Microsoft (Nasdaq: MSFT) continues to grow stronger year by year. Open source is starting to pick up,” said Barberg.

Traditional statistics companies have also been getting on the business intelligence bandwagon, Hardin noticed. “They market themselves as business intelligence companies,” he said.

Operations and Strategy

In the business intelligence space, there is a growing awareness that operations and strategy are two separate areas. Strategy aligned management will be a growing movement that will bring clarity to people wrestling with the two issues, in Barberg’s estimation.

“It’s starting to grow into separate but complementary disciplines,” Barberg observed. Operations and strategy are distinct areas, but they work well together, he said.

Operations and strategy are two separate components and recognition of that will increase, Hardin concurred. “That’s a useful distinction,” he noted.

The strategy component is growing, Hardin added. Operations deals with what individual customers want. However, Hardin sees more companies using data to help make decisions in the boardroom. Now, the economy drives people to look at data to make strategic decisions.

When he lays out architecture for business intelligence systems, Hultgren splits operations and strategic components at a logical level where there is a need for separate components. The two different components impact the capabilities of the architecture and the technical aspect, Hultgren said. From his point of view, the operations and strategic dichotomy is a technical concern rather than something that impacts business requirements.

Hultgren also points out that the enterprise-wide view is being taken into consideration. Companies now focus more on the total cost of ownership as they realize that business intelligence is an ongoing program to invest in. They are seeking to lower costs.

More attention is being paid to the core principles of business intelligence, such as integrated, non-volatile, subject-oriented data warehousing. “We’re seeing a return to those principles,” Hultgren observed.

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About Andy Painter

A passionate Information and Data Architect with experience of the financial services industry, Andy’s background spans pharmaceuticals, publishing, e-commerce, retail banking and insurance, but always with a focus on data. One of Andy’s principle philosophies is that data is a key business asset.
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