Has Business Intelligence Failed?

To help businesses get smarter and stronger, business intelligence (BI) systems analyze and synthesize huge pools of corporate data to create terabytes of performance-enhancing information for enterprises of all sizes.

BI can quickly pull critical information out of those huge data streams and serve it up in ways that can improve, grow and transform operations, sales and marketing. In fact, so much data can be drawn out of great BI applications today that it’s even establishing a bigger need for a new kind of IT worker — data scientists who are trained to make the most of all that information.

So how do businesses keep up with the improvements that are constantly happening in the BI marketplace so they can take advantage of new innovations? And how can businesses do more with the critical customer and process data they are collecting using their BI systems?

Brian Hopkins, an emerging technologies analyst with Forrester Research, says he’s seeing the evolution of traditional BI into new and even more valuable business tools, which is requiring new discussions to occur inside companies.

“CIOs need to have conversations with their business units,” Hopkins said. “They need to expand the scope of what they consider is their corporate data. The traditional scope of that information is that it’s all much bigger now, because of social media data and more.”

What they also need to do, he said, is make sure that their BI applications keep up with the constantly expanding oceans of data that their businesses are generating.

“They need to realize that with all of these new technologies and data streams, such as social media, this is stuff they need to care about,” Hopkins said. “They need to begin having conversations with the business leaders about where they could add value from all of this broad, unfiltered data.”

What’s happening in the world of BI vendors and applications, he said, is that BI has been evolving broadly over the last few years to do more things in new and innovative ways with all the data that’s being produced. For some, these changes could indicate that the traditional idea of BI has been failing, but Hopkins said he doesn’t subscribe to that idea at all.

“I think the definition of what BI is has been changing,” he said. “I don’t think it’s failed.”

In fact, he said, BI has certainly met the challenges it has been historically given: to help companies answer defined sets of questions and to be able to answer and define finite sets of questions with consistency, using known sets of well-structured data.

That’s all been made possible by using the analysis tools in BI applications which allow enterprises to dig deeply into their data to find patterns, information and the stories behind the information.

“Traditional BI has been like driving and looking into your rearview mirror” to see where you have been and what’s back there, Hopkins said. “Now, the direction of BI is forward, you are able to drive and look out through the windshield” to see what’s happening next.

Business Intelligence Definition and Solutions

For today’s enterprises, this is a huge boon for using BI data.

Traditional BI has asked questions, gathered data, cleaned and structured the information and put it into forms that could be queried and filtered to produce valuable business information that could be used to plan strategies and make decisions. “Traditional BI is about creating reports and making inferences about the past and the future,” Hopkins said. “It’s not as cheap as we would have liked and it takes longer than we would have liked, but it generally meets that need.”

Better means of BI have been coming for the last five or 10 years, he said, and those ideas are showing up more and more today in viable products that do more for enterprises.

Instead of going through the data sets and reacting to what’s already happened in a business, the latest BI systems can do more by anticipating what will happen in the future and help plan for those expectations, based on the old data that’s already been collected.

“The whole idea of predictive analysis like this has been around awhile,” Hopkins said. “It’s not a new science. It’s here and more changes like this are coming.”

Essentially, new generations of BI applications will give enterprises additional and better information to use and analyze.

Hopkins discusses this in his research paper: “Big Opportunities In Big Data: Positioning Your Firm To Capitalize In A Sea Of Information.”

“We began seeing it five to 10 years ago when airlines started setting ticket prices using sophisticated models,” Hopkins said. “Hotels followed suit, based on predictive models. Even your credit scores are done this way and retail stores are using it to see what they should stock in the future based on customer needs.”

With older BI methods, businesses were only looking at the past, then collecting, massaging and running statistical models on the data. “What we’re seeing now is that a new generation of predictive analytics is developing to allow us to not have to do so much massaging and filtering.”

And what’s even bigger is that the new BI methods don’t require users to know the specific questions they have to ask to get the answers they are seeking. “The old way required you to know the questions” to get the right information, Hopkins said. “Here you can have a general idea of value and try to draw some conclusions out of it. What we’re beginning to see are whole new ways of using BI for analysis. “

These new developments and features continue the evolution of BI, he said. “The old way & has reached some limits. The new frontier in analytics is focusing on this raw, unprocessed, unfiltered data. It used to be [done through] a batch process. What we’re talking about now is shifting away from that batch process to more real-time analysis.”

That means that BI data can now be analyzed more on the fly, as it comes in, rather than just after it is placed in reports. The old way simply cannot keep up and many users are overwhelmed with the huge volumes of data coming in quickly.

“That’s kind of the new frontier of BI,” Hopkins said. “CIOs will be able to use BI in new ways. Our understanding of BI is changing.”

For CIOs and other IT business leaders, these changes and advances in BI will be key in filtering out the corporate winners and losers in how this broad new generation of data is utilized, he said.

“The businesses that are going to be successful are the ones who are going to find ways of making decisions based on this new unstructured data,” Hopkins said. “They need to challenge their technology platforms and figure out how they are going to change them to capture that unstructured data.”

Todd R. Weiss covers ERP, CRM, BI, Oracle, SAP, virtualization and cloud computing for CIO.com. He’s also interested in a wide range of other fascinating IT topics, from open source to data centers and more. Follow Todd on Twitter @TechManTalking. And don’t forget to join Todd in the CIO Forum on LinkedIn.com to talk with CIOs and IT managers about the things that keep them up at night. Email Todd at tweiss@cio.com.