BI Solutions Must Address The Information Management Matrix

A confluence of changing business requirements and on-going vendor consolidation leads many organizations to rethink their business intelligence (BI) strategies.  Many buyers face decisions to move beyond departmental solutions or to stay with an integrated apps based BI solution.  Meanwhile, some buyers must decide whether or not an integrated platform provides the right balance between business impact and cost of technology.  Additionally, most organizations seek support for new data types and new deployment options.  As BI continues to evolve from fragmented and historical reporting to pervasive, predictive, and real-time decision support, an organization’s success increasingly depends on the support for a expanding information matrix of (see Figure 1):

• New and traditional data types. A proliferation of data types from social, machine to machine, and mobile sources add new data types to traditional transactional data.  Examples include content, geo-spatial, hardware data points, location based, machine data, metrics, mobile, physical data points, process, RFID’s, search, sentiment, streaming data, social, text, and web.
• Visualization and reporting paradigms.  Users expect more than the traditional charts, gauges, and dials.  Web 2.0 innovations show how Rich Internet Applications (RIA) through tools such as AJAX, Adobe Flash and Microsoft Silverlight can create interactive BI experiences.  New and old paradigms include ad-hoc query builders, business performance management (BPM) systems, dashboards, production reports, scorecards, and advanced visualizations.  New visualization types include matrix charts, network diagrams, bubble charts, tree maps, word trees, tag clouds, phrase nets, and others.
• Approaches and styles. Analytical techniques continue to improve as data volumes explode.  New and traditional approaches include advanced analytics, business activity monitoring (BAM), BI workspace, decision support systems, low latency BI, meta data generated BI apps, non-modeled exploration and in-memory analytics, scenario analysis, and OLAP.
• Deployment options. With data coming from so many different sources, users are seeking new deployment options.  Common solutions in the BI portfolio include BI appliances, BI in the Cloud, BI specific DBMS, Mobile BI, open source BI, on-premises packaged BI apps, private BI clouds, and SaaS based BI.

Figure 1.  The Information Management Matrix Drives Next Gen BI

Explosion In Semi-Structured And Unstructured Data Challenges Existing Solutions

Along with new business requirements, the old world of structured data must make way for a plethora of new data types in unstructured data.  More importantly, solutions must support a growing number of industry vertical standards in semi-structured data.  Unfortunately, no single vendor can support all the data types that fit into the following three categories (see Figure 2):

• Structured data. Structured data remains the most understood type of data.  Traditional sources comprise of data in transactional systems such as ERP, CRM, SCM and other database management systems.  Solutions conduct analysis via OLAP and traditional apps centric and database centric BI systems.
• Semi-structured data. Common examples include flat files in record format, RSS feeds, XML documents, and data in spreadsheets.  Industry-specific XML data standards and cross-enterprise data-exchange standards such as ACORD, EDI, HL7, NACHA, and SWIFT will continue to grow as BI goes vertical.  On the document print stream front, new systems should support ASP, Met code, and PCL.
• Unstructured data. Sources include natural-language text from e-mail, blogs, SMS, social networking sites, text fields, audio, video, and images.  Unstructured data represents up to 80% of today’s data sources.  Enterprises are challenged in discovering and organizing unstructured data for the real-time delivery of information to the right user.

Figure 2.  Data Types Fall Into Three Main Categories

Next Gen BI Must Reflect Emerging And Evolving Business Requirements

As market hype increases and sellers (i.e. vendors) rush to meet new requirements, buyers (i.e. users) should focus on 10 emerging and evolving next gen requirements that span dynamic user experiences, business process focus, and community connectedness (see Figure 3):

1. Support role based designs. Information enables actionable insight by role.  Dashboards, reports, alerts, notifications, and filtered activity streams must deliver relevant information at the right time for the right person.  BI tailors to the needs of a role and should be self-service.
2. Deliver consistent experience across channels and deployment options. Information enforces consistency across deployment models, devices, and data sources.  Users create, read, use, delete, and share information in a consistent user experience.  BI delivers information any and everywhere.
3. Enable contextual, timely, and relevant delivery of information. Information knows when to provide; what information to; which users; where it makes sense in a business process.  Users receive activity streams of information based on preferences.  BI understands relationship history and how to deliver to the right person at the right time with the right authority.
4. Align with configurable and adaptive business processes. Information aligns with business processes.  Users easily modify processes to meet changing conditions.  BI provides user driven ad-hoc reporting and configuration.
5. Facilitate outcome-focus and results-orientation. Information ties back to goals and instills accountability for results.  Users gain transparency and insight in data.  BI tracks key performance indicators (KPI’s) and related actionable key performance drivers (KPD’s) across an end to end process.
6. Foster proactive, predictive, & actionable insight. Information identifies patterns and trends including intent and forecast projections.  Users respond with speed and accuracy to requests and apply new techniques such as key performance predictors (KPPs).   BI anticipates requests and supports decision making.
7. Empower all types of stakeholders. Information and results shared with internal and external stakeholders.  Users establish relationships and participate in communities and social networks.  Solution opens up the system to new types of users, collaborators, networks, and communities.  BI must be easy to use by everyone making decisions, not just business analyst gurus.  Solutions should also take into consideration accessible outputs for the visually impaired.
8. Provide pervasive and natural collaboration. Information shared and socialized with key stakeholders.  Users collaborate with internal and external stakeholders to review results, modify plans, add understanding, and communicate changes.  Collaboration should support decision making.  BI embeds knowledge worker skills into existing work flows.
9. Engage self-learning and self-awareness. Information supports decision support, presence, and learning.  Users build a history of interactions that drive preferences and identify patterns.  BI applies presence and location information to offer relevant actions and remembers patterns and behaviors.
10. Permit security, scalability, and safety. Information supports role base security, data masking, partitioning, archiving, disaster recovery, and other security requirements.  Users shielded from cumbersome security measures.  BI meets regulatory requirements and disaster recovery thresholds.

Figure 3.  Next Gen BI Requirements Touch On 10 Elements Of Social Enterprise Apps

Long Term BI Strategy Must Support A Multi-Disciplinary Integrated Approach

Organizations can expect BI solutions to be embedded in a growing number of business solutions.  With actionable insight a scarce resource, natural integration points with other information management and orthogonal disciplines will emerge:

• Business process management. A strong linkage between BI and business process management will enable operational BI (OBI).  Organizations will transition from reactive to proactive process management.
• Content management. Unstructured information tied back to BI will bring new dimensions to information management.  Organizations can expect improved informed decision making and richer context to analytical reports.
• Data governance. Formulation of an organizational strategy and data stewardship methodology must align with the BI strategy.  Organizations must model business rules and controls that span cross-functional teams to improve the success of data quality and BI deployments.
• Master data management. Master data management forms the foundation of successful BI engagements by acquiring, cleaning, distributing, organizing, and managing master data.  Organizations still lag in MDM deployments but must come up to speed to support enterprise BI requirements .
• Social technologies.  BI’s reach into social apps and the social metadata layer bodes well for an industry just starting to explore social technologies.  Organizations need to associate a Twitter handle or social networking account with a customer account.

The Bottom Line For Buyers – Compare And Contrast BI Strategies To Match Business Impact And Technology Value

As with all IT solutions, organizations must balance out the business impact with the cost of technology (see Figure 4).   Given the three major vendor approaches to BI, organizations must rethink which approach best suits their near and long term strategy (see Figure 5).

• Application and business process centric. These solutions take an application or business process centered approach based on applications such as ERP and CRM.  Optimization for apps data and processes best suits organizations when more than a majority of their business information resides in a few data sources.  Sample vendors include Epicor, Lawson, Microsoft Dynamics, Oracle and SAP Business Objects
• Pure play best of breeds. These solutions provide deep capabilities in a subset of data types, visualization and reporting paradigms, BI approaches and styles, and deployment deployment options.  Pure play best of breeds deal well with multiple data sources and support data heterogeneity.  These solutions often address the data integration (DI) issues head on.  Sample vendors include Actuate, BIRST, Information Builders, MicroStrategy, myDials, PivotLink, Proferi, and QlikTech.
• Strategic BI platforms. These solutions seek to build a comprehensive approach to supporting data types, visualization and reporting paradigms, and BI approaches and styles.  Organizations should conduct a thorough analysis of platform maturity in order to assess degrees of integration, architectural consistency, and solution completeness.   However, not all strategic BI platforms are created equal as some are more apps centric versus apps independent.  For example (i.e. in order of most apps centric to most apps independent), the range includes Microsoft, Oracle, SAP Business Objects,  IBM, and SAS Institute.

In addition, there are a number of enabling technologies required for BI to be successful such as:

• Data integration (DI) and data quality (DQ). DI and DQ solutions enable the access to, transformation of, integration with, and delivery of the best version of truth to business systems.  BI efforts require successful DI and DQ strategies.   Sample vendors include Capscan, DataFlux, Datanomic, Experian QAS, IBM, Informatica, Inquera, Melissa Data, Omikron, Pitney Bowes, SAP BusinessObjects (FirstLogic), Satori, Talend, Trillium, and Uniserv.
• Data warehouses (DW). DW’s primarily provide a place for consolidated data storage.  BI systems leverage DWs to retrieve, analyze, extract, transform, load, and manage data.  Sample vendors include Aster Data, Greenplum, HP Neoview, IBM, Microsoft (DATAllegr0), Netezza, Oracle, ParAccel, SAP Sybase IQ, Terradata, and Vertica.
• Master data management (MDM). MDM helps organizations apply a technology solution to the acquisition, cleansing, distribution, organization, and management of master data to systems such as BI.  Sample vendors include DataFlux (A SaaS Company), IBM (including Initiate), Informatica (previously Siperian), Kalido, Oracle, and Talend.

Figure 4. Extent Of Business Impact And Cost Of Technology Delivery Drive Business Value

Figure 5.  Comparing Vendor BI Strategies: When and Why?

When evaluating next gen BI strategies, consider the following best practices in vendor selection:

• Focus on enabling all types of users. Solutions should enable anyone from a front line employee to a power user to view reports, build ad-hoc reports, collaborate, and improve decision making.  Design for roles could eventually result in BI activity streams filtered by key information needs.  Change management should be budgeted for solution development, training, and ongoing education.
• Support highly differentiated processes.  Take advantage of industry specific solutions that meet critical vertical requirements and reduce time to market.  Over time, expect BI to continue to specialize by verticals.  Certain industries will require different levels of information optimization.  For example an emergency dispatch, may prioritize optimization of certain data types over others or regulations may require a certain standard of delivery.
• Stay flexible. Ensure the systems supports multi-channel heterogeneous data sources.  Do not stay dependent on ERP systems for primary sources of data.  Expect a rapidly changing business environment that rewards flexibility.
• Avoid vendor lock-in to one set of technologies. Seek different approaches and styles depending on the business requirement.  Be open to best of breed solutions as needed.  Keep in mind, support of specialized scenarios or cross-enterprise requirements may result in the selection of best of breed.  Apps independent vendors will be more focused on supporting heterogeneity.
• Expect to move beyond departmental. Organizations will want to replicate successful deployments in departments across the enterprise.  Choose technology approaches and styles that can scale across different business functions, data types, reporting paradigms, and deployment options.
• Factor existing infrastructure. Consider when it makes sense to invest in or throw out existing systems.  Astute next gen enterprises find ways to simultaneously leverage existing investments and innovate.  Plan replacement projects in phases.
• Apply selection tools.  Save time and use independent vendor selection short list and check list tools to map business requirements such as organization and team structure, business and process maturity, technology strategy, and technology solution ecosystem.

Your POV

Does your existing BI strategy support these next gen requirements?  What next gen BI capabilities would you like to see your BI vendor deliver on in the next release?  Is your organization ready for a next gen BI strategy?  Does your BI strategy account for new social requirements?  Add your comments to the discussion or send on to rwang0 at gmail dot com or r at softwareinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your next gen BI strategy, overall apps strategy, and contract negotiations projects.  Here’s how we can help:

• Designing a next gen information management strategy
• Providing contract negotiations and software licensing support
• Demystifying software licensing
• Assessing SaaS and cloud
• Evaluating Cloud integration strategies
• Assisting with legacy ERP migration
• Planning upgrades and migration
• Performing vendor selection
• Renegotiating maintenance

Contributors

Research from this document came from conversations with 37 buyers (users) and the following sellers (vendors):

Reprints

Reprints can be purchased through the Software Insider brand or Altimeter Group.  To request official reprints in PDF format, please contact r@softwareinsider.org.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us.  IBM and Oracle are currently retainer clients of Altimeter Group but not a client of Insider Associates, LLC.   Altimeter Group has conducted project work for Informatica, QlikTech, SAP Business Objects, and SAS Institute.  This report was independently produced.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

IBM Adds A Leading Customer Data Integration/MDM Pioneer To Its Master Information Management Arsenal

With arguably 10 master information management acquisitions since 2003, IBM continues to push towards its goal of adaptive master data management (MDM) (see Figure 1).  The recent acquisition of Initiate Systems comes after the heals of Oracle’s purchase of SilverCreek Systems in January 2010 and Informatica’s purchase of Siperian in January 2010.  Rapid consolidation in the MDM market has effectively removed 3 of the 4 leading vendors in MDM.  The Initiate Systems acquisition brings IBM key benefits such as:

• Strong and proven customer data integration platform. Initiate Systems brings best-in-class data de-duplication, security and privacy, and strong data acquisition capabilities to IBM.  A key hallmark of the solution is the rapid real-time matching capabilities and hierarchy management.  Among all the MDM vendors, Initiate brings the most number of productive, live customers – about 100 of its estimated 200 customer count.

  Point of view (POV): As with rival Oracle, IBM must take steps to harmonize the different MDM solutions in its portfolio.  Today, IBM offers Infosphere MDM Server for PIM based on Trigo product information management (PIM) and Infosphere MDM Server 9 based on DWL for customer data integration (CDI).  Initiate Systems adds a third and capable product into the line up that’s optimized for customer data.

• Deep healthcare and public sector experience. Initiate Systems made its mark in health care and public sector.   Today, Initiate serves over 2400 health care sites and over 40 health information exchanges (HIE).  Key clients include Alberta Ministry of Health and Wellness, BMI Healthcare (UK), Calgary Health Region, CVS/Caremark, Humana, Ochsner Health System, the State of North Dakota‘s Department of Health and Human Services and the University of Pittsburgh Medical Center.  In the past years, the Chicago, IL based vendor has branched out to other verticals such as financial services, high-tech, manufacturing, and retail.  However, its gained the most ground in B2C public sector industries such as health care, law enforcement, governmental agencies, and intelligence.

  POV: Expect IBM to augment Initiate’s strengths with IBM’s InfoSphere Identity Insight and InfoSphere Global Name Recognition to address the B2C public sector industries.   In health care, IBM Global Services already serves as a key reseller and this will ease the integration of this practice area into Big Blue.  Expect Initiate to continue its lead in EMPI and role in public sector projects.  Consequently, IBM will have to address how they will work with rival partners such as Raytheon, Informatica, Carefx, Healthvision, Agfa, and dbMotion.
  

• Strong management team. Bill Conroy (CEO) and his capable management team drove an estimated $100M in revenues with a 4 year CAGR of 50% and zero debt. On top of this, they secured a $31M Series E round of funding from EMC, Informatica, Dunruth Capital, BCBS Capital, and Paladin Capital.

  POV: With arguably one of the most capable management teams in the industry and one of the sharpest sales minds, Greg Shaw, IBM adds some key assets to its management ranks.  How they navigate the Big Blue bureaucracy will be a test of how well IBM conducts integrations of high performing companies.  Given the improved collaboration culture within IBM Software Group and the rest of IBM, the future bodes well.

Figure 1. IBM’s MDM Acquisition Road Map

The Bottom Line For Users – IBM Brings Stability To Initiate’s Customers And Adds A Series Of Big Blue Capabilities

Initiate customers gain access to the assets of IBM.  Customers can expect IBM to integrate the product line over 2 years but benefit immediately from synergies with other IBM Information Management products such as its knowledge base of industry models, governance, BI & performance management tools, and identity and management tools.  As with most IBM acquisitions, key personnel in product development, support, and sales will be incentivized to stay for at least 2 years, providing enough time for knowledge transfer and account transitions.  In general, non-IBM customers will gain new resources.  Existing IBM customers will find business as usual.

The Bottom Line For Vendors – MDM Moves From Best Of Breed To Foundational Software Stack Component

Given the foundational nature of MDM in any vendor’s software stack, expect more rapid consolidation in the MDM market with very few independents by the end of 2010.  Potential acquirers include EMC, HP, IBM, Microsoft, Oracle, and SAP.  Potential targets for EMC, SAP, and HP include Datactics, Kalido, Talend, and Visionware.   With Initiate Systems in IBM’s hands,  Microsoft’s most likely target would be VisionWare or Kalido as they are the only two vendors optimized on the Microsoft stack.  SAP, EMC, and HP may be better off looking at Kalido for its strong pharma, insurance, and data governance capabilities for MDM.  MDM will move more and more vertical as domain specific issues become paramount.

Informatica Enters The Battle For Master Data Management Dominance

As with any best of breed market, only a few will survive and even fewer will succeed.  Despite a leading offering, Siperian’s faced a rocky financial situation over the past 12 months.  Many suitors pursued Siperian but in the end Informatica’s $130M acquisition of Siperian took one of the best products off the table.  Customers breathed a sigh of relief as the $500M revenue software vendor brings not only stability of product investment and expertise, but also a complementary set of related MDM technologies to market.  Key benefits include:

• Full spectrum of MDM offerings. Informatica’s Data Integration and Data Quality products combine with Siperian’s for a comprehensive master data platform.  Siperian brings some of the best data acquisition, data cleansing, relationship and hierarchy management, event management, reference data management, data stewardship, and architecture to market.  Usability and rich graphical interface are other strong points. In addition, the Identity Systems match engine and AddressDoctor postal validation already serve as best of breed solutions in many data quality initiatives.

  Point of View (POV): Informatica has been slowly tip-toeing in this market with 6 acquisitions in 4 years for almost $400M. Consequently, the Redwood City, CA vendor has assembled the key components for a comprehensive MDM offering (see Figure 1).  Informatica can now offer a wide range of entry points from smaller data quality projects to larger identity management projects enabled by a series of data integration flows.  Siperian is the crown jewel that takes Informatica directly into the MDM market and puts competitors such as Oracle, IBM, Initiate Systems, and SAP on guard.

Figure 1. Informatica’s MDM Acquisition History

• Attractive, referenceable, customer base. Informatica gains over 60 forward thinking MDM customers.  Key customers include big names in financial services and life sciences such as Bank of America, Pifzer, Shire, State Street Bank, Johnson & Johnson, and Lexis-Nexis.  These early adopters have pioneered some of the latest MDM success stories.

  POV: While the press release focuses on the financial services and life science customers, Sipeiran has taken big deals away from SAP, Oracle, and IBM in high tech and retail players in North America.   A very loyal Informatica base will most likely consider the Siperian offering in short lists, as it is now part of the family.   Many of these customers also run Oracle and SAP in the back office.

• Improved data governance. Siperian’s Business Data Director was one of the first tools in the market to address the issue of data governance.  Working with Lombardi’ s Teamworks BPM software, Siperian allowed customers to quickly manage assignment, workload distribution, state management, and event routing.

  POV: Data governance capabilities will provide a clear differentiator in the success of MDM implementations. Organizations often struggle with managing the Information Supply Chain (i.e. what data, to whom, for when, how often, and where).  Given IBM’s acquisition of Lombardi, expect Informatica to consider other BPM tools in the future.
  

• Synergies with Cloud strategy and Social CRM. The Informatica Cloud and related data integration heritage provide the pipes critical to cloud strategies.  Informatica delivers data partitioning support, data processing latency, and hybrid data integration.  Siperian provides the mechanism to manage multiple sources of information, maintain the golden record, and accommodate multiple domains.

  POV: As information continues to move into hybrid deployments and public/private clouds, MDM plays a critical role in harmonizing information across various cloud strategies.  In order to prioritize and monetize social initiatives, organizations will need to match social profile information with critical customer account information

The Bottom Line For Users – Expect More Stability And Investment From Informatica

(Source: Informatica)

Conversations with Ivan Chong, Senior Vice President and General Manager of Data Quality confirm Informatica’s commitment to invest in the Siperian offering.  From an organizational perspective, the Siperian product teams will remain in tact with the Toronto development and St. Petersberg offshoring offices in place.  Incoming product teams will function as a business unit within Informatica and the Siperian Release X (10) solution remains on track for launch in 2010.  Sales teams will stay as overlay subject matter experts augmenting the considerably larger Informatica sales force.  Siperian customers should find a good home at Informatica.

The Bottom Line For Vendors – Acquisition of Siperian Hastens MDM Market Consolidation

Expect more acquisitions to occur as the market consolidates.  Potential acquirers include EMC, HP, IBM, Microsoft, Oracle, and SAP.  Potential targets include Datactics, Initiate Systems, Kalido, and Talend.  SAP, despite the Business Object acquisition, still needs a strong MDM solution to complement its 4 or more point specific solutions.  Meanwhile, expect Oracle to spend the next 12 months finding ways to rip out any dependencies with Informatica in its vast number of MDM offerings.  Microsoft, EMC, and HP have been looking at entering this market for some time. Maybe now’s the time to act!