The two minute CRM guide to: business intelligence

In the first of a new series of articles collating information on a range of key CRM topics from the extensive MyCustomer.com archive, we round up everything you need to know about business intelligence and customer relationship management.

Business intelligence has come into its own during the recession as firms look to make critical business decisions based on more accurate data. According to analyst house Gartner, worldwide revenue for technology related to BI, analytics applications and performance management grew by 22% in 2008. That was a big enough push to take overall spending to more than $8.8bn compared to around $7.2bn in 2007.

MyCustomer.com news and technology editor Stuart Lauchlan recently reported on the booming market for business intelligence, with both Gartner and fellow analysts IDC offering similarly glowing assessments of the sector.

Gartner have suggested that some of this growth can be attributed to the consolidation that has characterised the industry over the past 12 months or so, with the big vendors promoting the business intelligence technology they've acquired to their existing customers.

This consolidation has not only reshaped the industry, but has also had major implications for customers, not least that consolidations have led to vendors embedding BI functionality solutions within their service offerings such as CRM ERP or financial systems.

Stuart Lauchlan has provided a rundown of the consolidations and the state of play in the business intelligence vendor sector - in which he also outlines the full implications for BI customers.

Changes on the horizon

Consolidation may have been the key trend characterising the past year, but according to the experts at Gartner, we can expect plenty more changes in the BI sector. These include:

• By 2010, 20% of organisations will have an industry-specific analytic application delivered via software as a service as a standard component of their BI portfolio.
• By 2012, one-thirds of analytic applications applied to business processes will be delivered through large-grained application mashups.

Kurt Schlegel, Neil Chandler, Bill Gassman and Nigel Rayner are just some of the Gartner experts that feature in this round-up of business intelligence market predictions for 2009-2012.

As if to emphasise the importance of business intelligence, one further forecast by Gartner is that more than 35% of the top 5,000 global companies will regularly fail to make insightful decisions about significant changes in their business and markets.

The cost of business intelligence

Nevertheless, whilst the idea behind business intelligence is to profit from having better quality data on which to make better business decisions, research has also indicated that BI systems can, in fact, end up costing companies dear.

Aberdeen analyst David Hatch recently identified four unexpected cost factors associated with business intelligence. These included:

• Year-on-year budget increases that can be as high as 9%.
• Total cost per user which can rise as much as 7%.
• Time to complete projects, which in the best performing firms can take about 14 days, can stretch to 39 days in other cases and can take as long as 177 days for particularly poorly performing organisations.
• Customisation and modification of software which can take up to eight days for poor companies, as opposed to one for top performers.

Fortunately, with business intelligence proving more important than ever in the recession, Aberdeen also provides some tips to address these factors:

• Automate the process for collection and integration of data.
• Start with end-user requirements, making sure to match BI tools with existing non-technical end-user skill sets.
• Investigate new licensing and deployment options - challenge solution providers to offer flexible and digestible approaches.
• Invest in back-end data integration, data cleansing technologies and corresponding skills.
• Investigate new licensing and deployment options, including concurrent user licensing, open source software, software as a service (SaaS) and hybrid approaches.