Analysis: Business Intelligence Goes Mainstream

Ask solution providers about business software and most will confess it's an entirely different animal from the rest of the technology stable.

For starters, applications such as CRM, ERP, supply-chain management and, in particular, business intelligence (BI) demand sophisticated skills and business-process know-how. Add to that the need for patience in navigating a longer sales cycle than that of core IT infrastructure, and it's another language to speak: You're more likely to be making the case for this software directly to the CEO or business manager rather than a CIO or IT manager.

Is business software an investment? You bet. But the rewards of climbing to the top of the software stack--better margins, lucrative services and customization opportunities--make it well worth it. In the VARBusiness 2006 State of Technology survey for the third quarter, focused exclusively on business software, solution providers report growth potential and high levels of innovation in the business-software market, especially for CRM and BI. Half of solution providers plan to sell BI solutions in the next 18 months, for example; and 16 percent of those folks are diving into the space for the first time or expanding existing BI practices. Helping drive momentum, technology vendors such as Microsoft, Business Objects, Oracle and Sage Software have flooded the channel with friendlier wares aimed at penetrating the vast midmarket.

Of all the business-software applications, BI--with its ability to slice and dice data to gauge operational efficiency and performance--is turning out to be one of the hottest IT markets. Gartner estimates that new license revenue for BI software will reach $2.5 billion this year and climb to $3 billion by 2009. And in a poll of CIOs conducted by the analyst firm last year, BI ranked second only to security as their chief IT concern.

You don't have to tell Shiv Kumar about BI's explosive growth. The executive vice president of Edison N.J.-based ZSL (VARBusiness 500 No. 318) says compliance mandates and the desire to get a handle on business performance have customers demanding intelligence tools more than ever. And, as never before, VARs can oblige those end users now with software that's less esoteric and much simpler to deploy and integrate.

"There's been a lot of maturity and improvement in the BI tools," Kumar says. "But BI is not so mature that a customer can figure out how to do it all. This is where the solution provider steps in with the value-add."

Kumar commends Business Objects for rounding out its flagship-reporting product capabilities with a data-cleansing tool and a Web-intelligence product that ZSL is deploying in its BI solutions.

Because BI systems pull data from a variety of back-end sources--CRM applications, relational databases and ERP silos--up-front data cleansing becomes critical to enabling accurate analysis and reporting. Basically, all renderings of something such as a customer's billing address must match specifically across data sources, which is often not the case.

At solution provider ZSL, Kumar says that focusing on integration work and other services, such as building a data warehouse to take a customer's reporting capabilities to a higher level, is where the BI rubber hits the road. The solution provider has a great opportunity to educate midmarket customers in particular, he says, about the intrinsic business value of more sophisticated analytics, he explains.

"We are approaching line-of-business people who are under pressure to do more with less," Kumar says. "We show them how they can generate better reports to see where they are standing and improve operational efficiency."

NEXT: BI For the Masses