CIOs without a business intelligence (BI) strategy will struggle with integration and be left with stovepipes, increased costs and poor reporting capabilities.
Introducing a BI solution over existing applications, such as customer relationship management and enterprise resource planning, means integrating capabilities from different vendors, a tough job if there is no strategy in place.
The experience some time ago of a payroll running late made the University of Queensland realise the importance of a clear and effective BI strategy, according to Doreen Stevenson, director of management information at UQ.
"A few years ago I set a query to run overnight and then the payroll ran over," Stevenson said. "It struck us then that it shouldn't have to be a choice between reporting and people getting paid on time. Business intelligence has always been important to the university, but it shouldn't conflict with existing operational systems."
When nutting out its BI strategy in 1996, the university, which was using Cognos at the time, decided it needed a solution that was more user friendly and had a higher degree of functionality.
The university chose Business Objects' BI suite and took a staged approach to the implementation over the next few years, going from 120 users in 1998 to 750 users by the end of 2000.
In the first stage, a data warehouse was built so all the existing operational systems data could be stored in a central location. A wide range of data, including staff, student, finance, research and HR, is now extracted from corporate systems.
"We have not had major implementation problems because we built the data warehouse first," Stevenson said.
"We run on SQL Servers on Windows NT. The team deployed Business Objects through a Citrix mainframe, which reduced administration costs because it wasn't installed on individual PCs, just straight through the server."
But a lot of large enterprises can have up to four data warehouses with different BI tools from different vendors, combined with business applications with built-in analytical tools, leading to stovepiped reporting, according to Crispin Read, vice president of product marketing, Business Objects. With stovepipe reporting, the user is able to get reports from each application, but cannot drill down for further analysis, or run a query across, for instance, CRM and ERP.
"Enterprises are faced with the philosophical question 'do you want your data warehousing and BI controlled by an operational application or ERP vendor?' You should be using BI to integrate stovepipes, not make more of them," Read said.
Disparate BI across the enterprise is an issue likely to increase, according to Read.
"In the short term, business is pragmatic and looking for ROI and users will continue to feel information starved. But in the medium term, many vendors will be converging and BI or analytical tools will come from many different directions. It's important for CIOs to have a BI strategy in place first," Read said.
According to Read, BI still has a humble penetration rate, adding that only 5 per cent of managers in the US have access to BI.
"BI is only scratching the surface; the market is just starting and we are pioneers. The overall state of BI today is in the same state as the relational database market in 1991, in adolescence," he said.
"If the CIO was faced with a clean slate, he can come up with a BI strategy for the enterprise, then choose a single BI vendor and finally deal with the difficulties on the back end. But BI is coming from many different directions and CIOs have to integrate the analytic tools built into business applications and legacy systems.
"This initial difficulty is compounded by the sale of BI tools that are focused on the business manager of each unit. The problem is twofold, the cost of maintenance and training for each system, and, more importantly, the user is not able to do analysis for more than one business application."
Read said CIOs, faced with the sudden influx of BI tools on the market, should take their BI strategy and make it their own. He recommends CIOs ignore the analytic applications that come bundled within off-the-shelf business applications. Instead, it is more effective to use a common platform selected as part of the strategy.
"[A BI strategy implementation] can take a couple of years, but CIOs should begin with the end in mind," he said.