Tuesday, May 31, 2011

The Collapse of Traditional Business Intelligence

The traditional approach to business intelligence has gone bankrupt. In its place, a new wave of companies provides alternative solutions based on innovative technologies and new business models.

Changes are Happening in BI
During the past few years, dramatic changes have been occurring in the world of business intelligence (BI). These changes all go towards one goal: removing the barriers - firmly set by the traditional BI vendors - which prevent wider usage of these decision-making systems within organizations.

These barriers include great complexity, high cost, excessive dependence on external system integrators and general dissatisfaction among business users with the tools foisted upon them by the traditional BI software vendors.

Naturally, these changes are leading relatively young and innovative companies to the field. Whether by utilizing newer technologies such as columnar databases or via a software-as-a-service (SaaS) business model, their goal is to change the rules of the game in favor of the BI customer.

The Importance of Data Analysis for Organizations
Business intelligence is a concept which has already been around for more than 20 years, and most organizations understand well the advantages of making decisions based on real data as opposed to relying on intuition and guesses. This has led to tremendous demand for these types of solutions, and the phenomenal consequent growth of the BI industry.

In today’s dynamic world, BI solutions are more necessary than ever to organizations interested in making their operations more efficient, primarily in controlling expenses and maximizing revenues. Furthermore, the Internet’s growth as a means of marketing and distribution is increasing competition in almost every field. Without BI solutions, more and more organizations will be finding themselves left far behind.

The New Self-Service BI Concept
Most of the traditional BI solutions (SAP, IBM, Microsoft, Oracle, etc.) are designed for implementation by subcontractors – experienced professionals generally known as “system integrators” – who specialize in customizing and deploying these solutions (in fact, most BI companies are actually integration companies).

As a result, these solutions require technical expertise which does not exist in the average organization. Additionally, the cost of the actual software in this situation is small relative to the service contracts required with the system integrator. And if that’s not enough, the organization’s complete dependence on the contractor can continue indefinitely, a situation that severely limits the adaptability and use of the solution for the frequently-changing needs of almost every organization.

Organizations considering implementing a traditional BI solution face these serious obstacles. This is the main driver for the most prominent industry trend of “self-service” BI, based on newer technologies and more business-friendly pricing models. These newer BI solutions provide at least the same degree of functionality and power as the traditional products, but are designed to be implemented, customized and managed by the people already found in most organizations.

Self-Service BI Products and Tools
The various types of “self-service" BI solutions can be categorized as follows:

1. Software-as-a-Service (SaaS) and/or cloud-based BI – This approach enables the implementation of certain, usually simple, business intelligence solutions without heavily involving of the organization’s IT department. The basic idea is to fully outsource all the IT services involved in implementing and maintaining a BI solution. These solutions eliminate, at least on paper, the need for expert technical staff, the need to buy and maintain dedicated computer hardware and the need to manage software updates. On the other hand, this approach does not remove the dependency on an outside service provider – it actually increases this type of dependence.

2. BI tools for analysts – This type of BI focuses on tools which make the organization’s data analysts more efficient in their work. Analysts spend a tremendous amount of time gathering and organizing data, usually in Excel, and then preparing graphs and reports. BI tools in this category generally provide facilities to more easily gather, organize and present data, including special analytical and graphical features. However, since these tools do not contain centralized data repositories and reporting facilities, they are not ideal for the multi-user environments which characterize most organizations interested in a BI solution.

3. Data warehouse/OLAP-replacement BI solutions – Solutions designed to serve many users and/or to process complex (or very large amounts of) business data represent the biggest technical challenge. Meeting this challenge in the traditional way – by using a data warehouse and OLAP cubes – is what positioned BI into the exclusive domain of the wealthy and the brave. The tremendous complexity, lack of flexibility and very high cost of this approach is what gave rise to alternative technologies which could deliver the same results (many users and much data) faster, easier and more cheaply. SiSense, for example, developed its own BI technology (called ElastiCube) which exploits columnar database and advanced memory-management technologies to deliver enterprise-scale BI without the complexity, rigidity and high cost of traditional BI solutions. Solutions of this kind represent the basis of an entirely new approach to the BI challenge.

In recent years, great strides have been made to enable the widespread deployment of enterprise business intelligence solutions. Whereas in the past, BI was the exclusive province of large and wealthy organizations, today it is also readily accessible to small and medium-sized companies. Now, even startups can (and should!) take advantage of the substantial business benefits provided by such solutions.

You, too, are invited to join the BI revolution!

By: Elad Israeli | The ElastiCube Chronicles - Business Intelligence Blog

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