Business Intelligence: It’s Art, Not Science w/ Boris Evelson

Boris Evelson, principal analyst at Forrester Research, has been following business intelligence for more than 25 years. Since last year, he says, the market has become “an absolutely hot area.” ChannelProManaging Editor Cecilia Galvin spoke with Evelson to find out what turned that beat around.

ChannelPro: What gave business intelligence the push it needed to get on SMBs’ radar screens?
Evelson: There are two main reasons. But let’s start with an older model of doing business. Historically, one business competes with another by becoming more efficient—doing more with less. If I have a more efficient business, my profit margins are higher, I use fewer resources, and my expenses are lower than those of my competitors, so I leapfrog ahead of them. But because we are all so automated, using ERP [enterprise resource planning] systems or CRM [customer relationship management] software, trying to squeeze out points of efficiency is becoming harder and harder.

Business intelligence enables you to be more effective. If I’m a mortgage processor and I automate with the right tools, I can process more applications with fewer people. That’s the efficiency. But for me to become more effective, to target my marketing campaign to the right customers so I get better conversion ratios or cross sell and upsell responses, I need a very robust business intelligence model. That is reason number one.

Reason number two is that yesterday we were dealing with megabytes and gigabytes of data. Today it’s terabytes, and tomorrow it will be hundreds of terabytes of data. In the business intelligence environment we used to work in, there was Microsoft Excel or maybe Microsoft Access. Now, however, we need a much more scalable, industrial-strength business intelligence environment.

ChannelPro: Have vendors helped increase adoption of business intelligence?
Evelson: All the large business intelligence vendors—Cognos and Oracle and IBM—used to play only in the large enterprise space and stayed away from midmarket and small companies. Now they are all going into the SMB market. But these large companies still provide pretty expensive and complex tools, even with their SMB offerings. There are 30 or 40 smaller, tier-two business intelligence vendors that provide very robust, elegant, interesting business intelligence solutions geared toward the SMB segment.

ChannelPro: What opportunities in business intelligence do you see for solution providers?
Evelson: Nobody has invented business intelligence out of the box. Business intelligence is still very much an art and not a science—you can’t read “Business Intelligence 101” and have it all together. I always tell my clients that for every dollar they spend in software, they need to budget three to five dollars for system integration—at the very least. Sometimes it’s even more.

In the business intelligence “stack”—the architectural stack—there are many components. To turn the raw, meaningless data that exists in databases into meaningful, useful information, there are a lot of steps. In a $10 million company with a couple of hundred employees, for example, you’re going to have an ERP system, a financial system, and a CRM system. To bring them all together into a senior management environment in which the CEO can look at a single dashboard rather than 20 different reports, you need to find out where the data is, integrate it, cleanse it, model it, aggregate it, and so on. A lot of components are required to bring that data together, and that’s still very much a systems integrator market.

- Cecelia Galvin