With easy-to-install on-demand applications, IT's role as gatekeeper is minimized, say analysts. By 2012, Gartner's Schlegel predicts that emerging technologies such as on-demand and SaaS BI tools will make users "less dependent on central IT departments to meet their BI requirements."

However, even the most enterprising line-of-business executives have to realize they need IT's buy-in and support for on-demand BI applications. Welch's had just finished the four-year $31million project installing Oracle's ERP applications in-house, which included a BI application, and IT was understandably "concerned" about Coyne's new external application needs, he says. "They wanted to make sure we were doing the right thing," Coyne says, "but even they said that this particular area of Oracle does not have a solution for it. It wasn't much of a debate at all."

One major sticking point for IT usually involves the security of corporate data as it moves outside of IT's control. But executives and analysts say that the potential business benefits of quicker access to BI data, coupled with the robustness of third-party providers' security mechanisms, may outweigh concerns.

Casual Male's Hernreich says he was initially "nervous about the information being offsite," but that the final analysis showed the business benefits of a SaaS BI solution were too big to ignore.

And for SMB companies like RapidAdvance, well-established vendors' security controls are a benefit—not a concern. "For a small company to leverage and piggyback off the firewalls and data protections [of a vendor like Business Objects] was a big selling point for us," Cohenford says.

To many companies, the future of on-demand BI applications is already here. Says Hernreich: "It's essential to operating the business."

(For more on CIO's special BI series, see Part 1 "BI: A Technology Category in Tumult"; Part 2 "Nine BI Vendors to Watch"; Part 4 "What You Need to Know About BI TCO"; and Part 5 "Opinion: Don't Make BI Suck for Users.")