Business analytics—a market in transition

monitored).

Competitive pressures
Within the process of performance management, it is important to go beyond dashboards and reports that focus only on information delivery. To put BI into an operational context, it's not enough to have dashboards that simply report on what happened. That information is valuable but of limited use. Dashboards should also show context around the information and provide guidance for action. In other words, they need to be in the context of whatever business process they are built for and support predictive analytics.

Intercompany connectivity
The final driver is intercompany connectivity, or the linking of business processes with partners, suppliers and customers. It is important to have a more comprehensive view of operations that goes outside the organization.

The changing nature of BI projects

As those drivers fuel the interest in BA, the discussion around BA implementations is changing from one of technology to one of best practices in the process of performance management. Some of the questions being asked include:

• What key performance indicators (KPIs) should be tracked, measured and acted on? F
• How should BI competency centers be established and managed?
• How should master and metadata as part of a broader data quality and compliance effort be managed?

Some market observers and certain vendors seem to overemphasize the trend of software consolidation. IDC research shows that about one-third of organizations are indeed trying to establish a single corporate standard for their BA needs. However, the other two-thirds are either not launching any software consolidation efforts or are at best rationalizing their existing portfolio of BI tools to a more manageable level.

We believe that it is extremely difficult for any organization to try to address all the different user needs with a single BI product or a single BI vendor. The key to a successful business analytics project is the detailed understanding of the different needs of users. A need exists for traditional BI tools that are focused on the tracking, integration and delivery of information through reports and dashboards. A need exists for solutions that don't simply report on the information but are focused on decision support and incorporate support from advanced analytics tools that enable predictive analytics as well as workflow management and collaborative functionality.

In the short term, the focus for organizations should be on consolidating their business analytics platforms to deal with data integration, data quality and master data management issues. After a solid platform solution is in place, it will become less important which individual BI tools various user constituents prefer to deploy, as long as they are all sourcing data from a common platform. Having said that, it is likely that over time all the user BI tools will increasingly have a similar look and feel, thus decreasing the switching costs of such tools.

In the intermediate term, the BA market is going to further branch into a few large software providers, with diverse product offerings spanning all or many segments of the BA market, and many smaller niche vendors that specialize in one or a couple of the related segments of the market. It's going to be increasingly difficult to find a middle ground between those two ends of the competitive spectrum.

In the long term, the market will move toward IPA solutions that combine business analytics with business process management. IPA solutions will be key to further optimization of all business processes based not only on automating transaction processing steps in a given process, but doing so with full intelligence based on the analysis of historical data and predictive analytics.