BI and Performance Management

After a relatively sleepy summer, business intelligence (BI) software vendors are preparing to unveil new architectures that underscore a dominant theme in the sector this year: convergence. They are promising to address the needs of a diverse range of users and applications from query and reporting, OLAP analysis, dashboarding, scorecarding, data integration and analytic applications.

Vendors are rolling out newly integrated platform offerings, built on the latest service oriented architecture (SOA) frameworks, that promise watertight integration between various BI components and are touted to be more flexible and adaptable to change. At the same time, these vendors are also aggressively pushing performance management as a higher strategic goal for their tactical BI infrastructures.

BI infrastructure is widely acknowledged as a necessary foundation for performance management, characterised by financial planning, budgeting, consolidation and forecasting applications. But the previous practice of buying individual best-of-breed BI tools is starting to wind down as companies seek to rationalise their current investments in BI and performance management technologies to reduce the overall cost of ownership and standardise on a single enterprise platform. A study by The Data Warehousing Institute (TDWI) reports that 45% of companies are now opting for integrated BI suites from a single vendor.

These factors are now driving the architectural shifts of major vendors. The competitive battleground is also slowly shifting from point-tool functionality to platform integration as customers pay increasing attention to these architectural issues when selecting an enterprise BI platform.

John Kopcke, chief technology officer at Hyperion Solutions, sees BI architecture coming under increasing scrutiny by customers looking to launch further into performance management. "Customers are now very focused on long-term architectures to run BI and performance management applications in concert," he says. Fortunately, BI vendors are taking heed and are finally facing up to some serious integration issues.

Technology convergence

"Successful integration is like building a house," says Christina McKeon, product marketing manager for BI at SAS. "You've got to put all the fundamental elements in place first, like framing, plumbing, wiring, etcetera, before you start painting and decorating."

It is no coincidence that all the leading performance management providers have grown up largely selling tactical BI tools. According to Mychelle Mollot, VP of market strategy at Cognos, the distinction between both sets of technologies is becoming increasingly blurred. "Companies are basically asking three questions about their business: 'How am I doing? Why and what should I be doing?' These three questions respectively map to scorecarding, BI and planning."

Mollot sees no sense in having these questions answered by different products. "You lose the decision throughput when you're working across silos of different technologies." Other BI vendors concur. "We see performance management as beginning with a sound BI strategy," says Lance Walter, VP of product marketing at Business Objects.

"BI is the enabling infrastructure for surfacing the metrics and intelligence you want so see. We're certainly seeing this in our customer base." Walter points to core BI functions like reporting, scorecarding and dashboarding as classic entry points for strategic performance management.

Market consolidation is also driving towards platform convergence. Most of the leading BI vendors are victims of their own acquisitions. These companies have buying technologies to broaden their functional footprints. But each acquired product comes with a different interface, object model and metadata, which presents a formidable integration challenge.

Customers who early on purchased multiple BI products from one vendor may have enjoyed volume discounts but have rarely benefited from a lower cost of ownership. Platform integration (or lack thereof) has been a perennial thorn for BI vendors; multiple products usually mean multiple metadata, security, and server administration.

Leading BI vendors are only just now starting to address this issue and have spent the better part of this year overhauling their suites and platforms. These are no ordinary upgrades: they are major architectural rethinks. Most leading BI vendors have completely re-architected their products to support SOA frameworks and concepts such as web services, .Net and J2EE.

Business Objects and Hyperion have had a tougher time because of their large acquisitions. At the beginning of this year Business Objects released its XI platform, which brings fuller integration of Crystal Decisions' products the company acquired back in 2003. Meanwhile, Hyperion's Project Avalanche due later this year, has similar integration ambitions for pulling acquired query, reporting, analysis and metrics management tools from Brio Software onto one platform.

Arguably the biggest SOA play this year was the launch of Cognos 8, which finally synchronises the rest of Cognos' BI tools with the new common web-services SOA that was introduced with the release of its ReportNet product a couple of years ago. "We took a hit several years ago to build an SOA from the ground up to service the needs of our company and customers. We're now migrating the rest of our technologies onto it," says Mollot.

Of course, there have been some exceptions. MicroStrategy and SAS claim to have 'cleaner' architectures that are integrated by design. Both have fleshed out their BI suites in-house rather than buying-in technologies. MicroStrategy claims it has had an integrated architecture since 2002. "Organically grown is the only way you can ensure homogeneity of architecture," says Sanju Bansal, chief operating officer at MicroStrategy. "We've been building off a unified, plug-and-play architectural foundation from day one to deliver the five styles of BI on a single integrated platform."

Conceptual integration

Meanwhile, SAS says it has integrated a core set of BI, analytics, data integration, metadata and management services on its foundational SAS System. "We didn't face that [integration] issue," says McKeon, who points to the benefits of working with a single set of shared metadata across the BI environment. "Having to go back-in after the fact and put a common metadata layer under basic reporting tools is chaotic for customers."

As performance management nears the top of the investment priority list in many companies today, it is no surprise that BI is seen as a tactical means to a bigger end. A major draw of enterprise BI is to apply the technology to reorient business performance and execution. BI vendors, once limited to query, reporting, and analysis, are increasingly adding performance management analytics on top of their core platforms.

In doing so they are hoping to ratchet BI data outside the realm of the traditional 'power users' and business analysts to propagate the entire enterprise - across middle management, up to the executive suite, and even down to operational workers - via scorecards and dashboards for daily comparison to strategic goals and budget targets. This is certainly the case for vendors such as Cognos and Hyperion.

Performance management

While Hyperion's Kopcke acknowledges that BI is a necessary component, he believes business managers are really after performance management. "That's the overarching goal. If I go to business users and ask how they are using BI to run their business they usually have no idea what I'm talking about. But if I ask them how they do event-based planning or get insights into customer profitability we have a more engaged conservation."

BI vendors, particularly those that bought their way into performance management, face another stiff integration challenge to fuse together their BI with performance management systems. The next products that Cognos is expected to integrate into Cognos 8 are its Planning (Adaytum) and Controller (Frango) applications. "We're now tackling the toughest and most valuable part of integration: that is making the financial planning and consolidation systems work as a native source to Cognos 8," says Doug Barton, VP of product marketing at Cognos.

"From a performance management perspective, Cognos 8 will systematically link plans directly to reports and analysis or to link scorecard initiatives to line items in a detailed plan." Barton expects Cognos to deliver this capability next year.

Business Objects arguably faces an even bigger challenge integrating .Net performance management applications from SRC into its predominantly Java-architected XI platform. And Hyperion's System 9, due out later this year, will also attempt to lay a foundation for a shared infrastructure and set of user interfaces for a BI and performance management suite. "We'll be changing the game with System 9," Kopcke says. "It will be the only performance management solution that truly integrates financial applications with a powerful BI platform."

Web services SOAs have already been touted as the way forward for the integration of operational business processes. According to Forrester Research, nearly 30% of large organisations already have a policy in place for SOA. Indeed, many enterprises are now starting to deploy web services for connecting applications internally.

There is a strong justification for BI vendors to get excited about SOA and web services. Having a modern SOA framework that delivers a common set of shared services is considered key for seamless integration among their products on many levels. For instance, SOA allows their products to share a common GUI and run off a common object model and runtime metadata repository.

The SOA message of common services is especially strong in BI. "SOA blurs the lines between the traditional BI functions of query, reporting and analysis, replacing them with common access and authoring environments," says Mollot. "Users seamlessly navigate from scorecards and dashboards to reports and analysis [and vice versa] without being required to open and close multiple BI tools."

Building BI into an SOA can also ease administration, deployment and technical support costs, which ultimately translate into lower cost of ownership. "Project Avalanche is about lowering the number of moving parts that business users need to understand," says Kopcke. "Because you're offering users a consistent UI you're spending less time and effort on training. Plus deployments get more flexible because you can decide which pieces get deployed when and where."

While Cognos and Hyperion are wholeheartedly beating the SOA drum, not every BI vendor is convinced. Information Builders' CEO Gerry Cohen does not believe that BI customers are crying out for SOA right now. "I just don't see a mass movement towards SOA right now. Sure it's nice to have and we've sold web services to some of our WebFocus customer base. But I'd label them as a minority," he says.

Process-centric approach

As more and more core BI and performance management functions get packaged up as reusable services, Kopcke predicts that the SOA architecture currently being laid down for BI will eventually subsume performance management as part of an end-to-end business process.

'Process' is the operative word here. Hyperion's Kopcke sees SOA bringing the benefits of business process management (BPM) directly into the BI mainstream. "There's a growing trend among BI customers to move away from a product-centric architecture to a process-centric architecture," he says.

"That's what SOA enables you to do. It lets developers build composite BI and performance management applications by interconnecting or orchestrating services across a process flow that spans many tools, applications and data sources."

CBR Opinion

Architecture matters are driving more BI and performance management technology purchasing decisions today. While performance management might be the endgame for customers, BI vendors are busy getting their BI houses in order first. These vendors can ill afford to keep sweeping integration issues under the rug. Loosely integrated BI suites are going out of vogue and are being replaced by tightly integrated SOA products that blur the distinction between traditional BI tools and performance management applications. The value of having a flexible SOA is being realised at multiple levels: from applications, data and processes. BI vendors that can sell this value to both the business and IT will be the ones to emerge, and survive in a rapidly consolidating marketplace.