Getting Smarter: Process Expertise Counts In Business Intelligence Work

The same complexities involved in the enterprise—building data warehouses and data marts, ensuring data quality and handling the infrastructure issues needed for the interactive query and analysis of data pulled from 15 or more data sources—will apply on a different scale in the midmarket.

And that's just the back end. In the midmarket, solution providers also must apply deep vertical expertise to help clients examine the right metrics to improve their business through reports, dashboards and scorecards.

"It's the same technologies, skills, data sets and problems in the midmarket as the enterprise," said Mark Mueller, president of DataClarity, a BI-focused systems integrator in Raleigh, N.C. "Certainly the sales cycles are more complex in the enterprise, which is why a midmarket customer is an easier play. And in the midmarket, there tend to be fewer in-house standards to overcome and levels of approval to meet."

You can stop looking for special midmarket products from leading BI vendors such as Cognos, Hyperion and MicroStrategy. Of the major players, so far only Business Objects has released a midmarket-focused product. This past January, the San Jose, Calif.-based vendor released Crystal Reports Server XI and promised to deliver more products for the space this year.

But don't be disheartened by the dearth of midmarket-specific software. Plenty of practitioners and observers say opportunity abounds in this red-hot market, regardless of customer size. One reason: BI's very complexity makes this a classic partner play. Gartner predicts that through 2007, 70 percent of all BI projects will engage systems integrators and consultants. What's more, BI continues to top the charts of IT priorities.

In a recent Gartner survey, for example, CIOs listed BI as their second-highest priority in 2005, up from tenth-highest in 2004. Gartner also forecasts that companies worldwide will spend nearly $6 billion this year alone to gain better insight into their internal operations.

And yes, that includes midmarket companies defined, for the purposes of this article, as companies with $100 million to $500 million in annual revenue.

"The midmarket is finally looking at business intelligence. We have five or six new deals this quarter, just in the midmarket," said Robin Ranzal Knowles, president of Ranzal and Associates, a BI solution provider in White Plains, N.Y.

Keith Boyer, COO of Data Management Group, Hampton, Va., which focuses on accounts in the $250 million to $750 million range, said, "Our BI practice has been averaging 70 percent growth for the past four years. We beat up Bearing Point and firms like that all the time, and not just on price."

DataClarity, Ranzal and Associates and Data Management Group are all BI specialists. As such, they boast the full gamut of skills in data integration, data warehouses, Web technologies (such as portals and content management) and finance, for example. But that's not enough. To truly add value to a BI implementation, providers must also be deeply familiar with domain-specific best practices—allowing them to counsel clients on the metrics and scenarios they need to examine.

"My job is to enlighten people on what they don't know they don't know," Boyer said. "Someone may not know that quality levels are falling simply because that's not a metric they have tracked before. We can say we know your industry. We know what information you should be analyzing."

But not every BI specialist can know every industry. And that represents an opportunity for niche-focused solution providers to partner with other systems integrators keen to enter new markets.

"Some people specialize in which types of reports to produce. Some focus on vertically specific best practices. There's absolutely room for the front-end guys to partner with those who know the back end," Boyer said.

One final point: Microsoft can't be left out of any midmarket equation. Already, a number of smaller BI vendors, such as Panorama and ProClarity, offer tools that tie closely with Microsoft's SQL Server database. Soon, the software giant will release Maestro, its own BI platform for the realtime monitoring of back-office data.

That move could finally prompt the major BI players to produce midmarket-suitable products as early as this time next year.