Business Intelligence market has transformed significantly
in 2002. New technologies have emerged and merged with
existing ones, changing the market's perception of BI,
and forcing vendors to deal with a different marketplace.
by Gourish Hosangady
world is rapidly moving towards convergence and a new
business and connection paradigm is emerging: c-commerce.
Here, intellectual capital will move to the mainstream
of enterprise assets. Technology and services for enterprise
knowledge management will evolve to support the extended,
collaborative enterprise. Surviving the information
flood and effectively managing it will be a critical
success factor for enterprises to survive and have a
distinct competitive edge.
Thus in a c-commerce business world 'knowledge and information'
will be the basis for giving an enterprise its competitive
edge. This is where Business Intelligence (BI) comes
in. But what is Business Intelligence? Currently, in
India, BI as a concept is not clearly understood, typically
being limited to either a traditional database analysis
tool or mistaken for a concept similar to market intelligence.
In a line, BI solutions strive to manage the onslaught
of data flood and eliminate 'gut feel' with empirical
data analysis. It is a broad category of applications
and technologies for gathering, storing, analyzing and
providing access to data to help enterprises make informed
business decisions. Typically, BI applications include
decision support systems, query and reporting, OLAP,
statistical analysis, forecasting and data mining.
Business Intelligence therefore is the foundation on
which c-commerce rests. It offers focussed solutions
for current front-end applications such as CRM, SRM,
Risk Management etc. It should not be confused with
traditional database analysis or datawarehousing. It
is not a technical tool for tactical implementation
but a strategic decision that makes sense of business
For effective implementation of a BI solution, the de
facto condition is a solid and reliable data warehouse.
Data warehouse is a subject-oriented, integrated, time-variant,
non-volatile collection of data, cutting across the
enterprise. Until there is a repository of accurate
data across the enterprise value chain, application
of BI tools to analyze and aid in strategic business
decisions is impossible. Currently, data integrity,
found wanting in most enterprises is the most difficult
and resource consuming stage of BI development and deployment.
Having said this though, BI in the near future will
be profoundly different from the way it is viewed today.
According to Gartner, the Business Intelligence market
has transformed significantly in 2002. New technologies
have emerged and merged with existing ones, changing
the market's perception of BI, and forcing vendors to
deal with a different marketplace.
This is clearly reflected in the Frost & Sullivan
report on the Business Intelligence market in India,
wherein BI has been categorised to include query &
reporting tools, data warehousing & mining technologies,
and business performance management. As per the report,
the BI market was estimated at Rs 26 crore for Jan-Dec
2001 and is expected to grow by 40-45 percent in 2002,
i.e. approximately Rs 37.5 crore. This is an indication
about increasing levels of awareness of BI, even though
implementation at a strategic level is yet to pick up.
In the current scenario, according to Gartner, forward
thinking Type A enterprises (10-15 percent of enterprises)
understand the importance of BI at a strategic level
and are investing accordingly. They are building BI
competency centers and assessing the impact of information
on the enterprise and business processes, to use BI
in a comprehensive and integrated way. Many Type B organisations
(50-60 percent of enterprises) also seek BI, but in
a less integrated way. Much of this is driven at the
departmental level in a discrete fashion. Type C enterprises
(20-40 percent) are those that have either stalled or
dramatically reduced investment in BI and are trying
to consolidate existing systems and software to 'save
Thus, at the outset, a majority of BI solutions have
continued to be implemented on an "as needed"
basis, and at a departmental level. And as enterprises
continue to move toward risk aversion, it is evident
that the vendor success in the last quarter of 2002
will be based on financial and product stability and
service excellence. In keeping with the underlying market
dynamics, the BI market in 2002 has experienced a limited/flat
growth with enterprises expecting more from their vendors
than ever before. The result is a tough market in which
consolidation is inevitable in the immediate futureone
in which only the fittest will survive.
Wait and Watch
BI solutions are thus in an evolving market that has
immense potential for growth, albeit slowly. Further,
innovation has continued although at reduced levels.
The key reason for this has been the blurred understanding
by the target audience of the concept itself and its
scope and benefits thereof. Compounding the problem
has been the huge past investments made by these enterprises
in applications, with negligible return on investments.
Thus, the 'wait and watch' approach continues unabatedwith
enterprises in no mood to invest and deploy new applications
as BI. So despite the temptation to rush to the "next
greatest thing," most enterprisesparticularly
the majority of technologically mainstream Type B enterprisesare
continuing to focus on improving the use of the applications
they already have.
However, the underlying BI market dynamics are slowly
but surely changing. The trigger has been the emerging
trends in enterprise application software. Gartner says
the year 2002 has been a turning point for enterprise
application software. This is evident from the increasing
number of users' expectations aligning with business
objectives. Alongside, a growing number of vendors are
delivering products that are more of a solution and
less of a tool. Further, Gartner goes on to predict,
this trend will continue in 2002-2003 with the beginnings
of a model wherein application software emerges as the
operating system for enterprises.
This will have direct bearing on the BI market.
To elaborate, with the growth of large-enterprise application
suites this year, vendor software has become more closely
intertwined with business processes. With this comes
the realisation that results from enterprise applications
deployed will be best achieved by using a set of applications
that will cause and result in optimal business change.
Mere automation of functions will typically prove to
be adequate. In line with this, key decision makers
have started realizing that the path to business change
via sound business strategies is based on knowing and
understanding the underpinnings of businessor
implementing BI solutions.
With this, the year 2002 has marked the beginning of
the age of BI. Undoubtedly, going forward, failure by
enterprises to begin leveraging the growth in analytic
capabilities will certainly place them at a competitive
disadvantagea situation that will make the difference
in survival in a world gradually but surely moving towards
The writer is CEO and Managing Director, SAS India