The Business of Intelligence

Though still in its initial stages, business intelligence saw significant activity in the Indian market. Among those offering BI solutions in India are SAS, NCR, Tera Data and ICICI Infotech. Banking SW major i-Flex too launched its BI product—Reveleus. These software vendors have, in turn, have tied up with major service companies like TCS and Satyam to implement BI solutions.

According to a report by Frost & Sullivan and SAS India, BI revenue stood at $10.5 million at the end of 2002, expected to grow at a CAGR of 33.9% to $30.4 million in Year 2005. An interesting aspect—a bulk of BI activity is in the CRM space. Such products are utilized by organizations with a high customer base, largely dependent on improving services based on information gathered through customer behavior. Thus, areas like churn analysis and credit scoring are strong. This trend is likely to continue in 2003-04 as well.

The demand for BI solutions is mainly fuelled by large and medium-sized organizations and multinationals. Finance, insurance, telecommunications, pharmaceuticals, government, transport and agriculture are among the key verticals being addressed by BI.

What really is BI?
BI is an umbrella term for a set of tools and applications that allow corporate decision-makers to gather, organize, distribute and act on critical business information. BI applications include activities of online analytical processing, decision support systems, data warehousing and data mining. It was felt that in order to derive benefits from the data, it had to be consolidated and formatted according to specific needs. This realization gave rise to applications that enabled organizations to convert data into usable formats.

With major IT development, new BI applications have come online and existing products have been reworked to offer new functionalities. Initially, BI tool sets could be broken down into two distinct categories—executive information systems and DSS. They ran on mainframes—and considered the property of top-level managers.

Roadblocks in BI
BI software needs to extract, assimilate and analyze information from diverse systems to derive meaningful information. Due to unclean data in a large number of Indian enterprises, integration, customization and upgradation of technology are regarded as a major hindrance. The effectiveness of an application such as BI is hampered if the information infrastructure of the organization is not in place. Non-availability of data on key subject areas for complete business analysis is the next big challenge. High implementation costs and complexities in the technology are the other limiting factors.

In the current scenario, according to Gartner, forward thinking Type ‘A’ enterprises (10% to 15% of enterprises) understand the importance of BI at a strategic level and are investing accordingly. They are building BI competency centers and assessing the impact of information on enterprise and business processes to use BI in a comprehensive and integrated way. Many Type ‘B’ organizations (50% to 60%) also seek BI, but in a less integrated way. Much of this is driven at the departmental level in a discrete fashion.

Type ‘C’ enterprises (20% to 40%) are those that have either stalled or dramatically reduced investment in BI and are trying to consolidate existing systems and software to "save money".