BI explosion pressuring CIOs: analysts

The proliferation of data to be processed by business intelligence tools will cause headaches in the coming years, say industry reserachers. Jeremy Kirk reports

Businesses will face a ten-fold increase in the amount of information generated by their IT systems over the next five years, research firm Gartner says.

That represents an influx of data that will prompt tough decisions on the use of BI (business intelligence) software, analysts say.

That pressure is going to fall on CIOs, who will increasingly be asked to present managers with up-to-date information in a format that allows them to make faster business decisions, the analysts say.

“We need to create an environment where that information can live safely,” says Frank Buytendijk, a research vice president at Gartner. Speaking at the company’s recent BI conference in London, he noted, “There is unbelievable information to be mined.”

Organisations must carefully plan how they will integrate their IT architectures for BI, says Bill Hostmann, another Gartner research vice president. High user expectations and eventual commoditisation of BI platforms will bring down the per-user cost, he says.

However, the lack of ability among BI users to customise and share the information will hold back its effectiveness, he says. After deploying a BI system, CIOs often say the main problem is that they forgot to train users, he notes.

“It’s the biggest hidden cost.”

Companies tend to use spreadsheets as information system “duct tape” as they move to a common platform. But spreadsheets “are not a tool to manage your business,” says Andreas Bitterer, also a research vice president at Gartner. Bitterer says he knows of a large company that uses 14,000 spreadsheets, a troubling fact when the numbers on one spreadsheet affect many others.

The amount of attention paid to BI projects is crucial to their success or failure. “What we find is that the success of a BI initiative is proportional to the altitude of the executive that it reports to,” Hostmann says.

Electronics giant Philips has undertaken a broad programme over the past few years to revamp its performance management, financials reporting, marketing, IT and technology, says Jan Hommen, the comapny’s former vice chairman and chief financial officer. Philips has 40 BI projects nearly completed with SAP.

They include creating an online business balanced scorecard for every reporting unit, including financial and market results and where to improve. The company is also working to slash the time it takes to report results to the executive board from around 14 days to five days, Hommen says.

Hommen came to Philips in 1997 from aluminum producer Alcoa, which has one of the fastest financial reporting systems in the manufacturing sector. “Shareholders feel if you report quickly, you have to be good because otherwise you can’t,” he says.

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