News Analysis

BI in the fast lane

Shivani Shinde finds that as India Inc begins to adopt BI in a big way, there’s a rush of vendors releasing BI products to cash in on the trend.

Don Cooper-Williams

According to a recent Frost and Sullivan study of the Business Intelligence Application Software Market 2005 and beyond, the Indian BI market is pegged at $ 47.4 million with a revenue potential of $ 68.8 million by 2007. The report states that the Indian BI market is coming out of its infancy stage, and the next three years’ forecast predicts that the market would be in high growth trajectory.

The report suggests that the Indian integrated BI platform market size is worth $26.9 million and contributes to 57 percent of the total Indian BI market. The market has grown by 43 percent in 2005-06 from 2004-05.

With most of the organisations done with their initial IT deployment, they are now looking at maximising the capabilities of their systems by deploying BI tools. Not to be left behind in capturing the market, leading vendors of BI tools—SAS, Business Object and Teradata—are all gearing up to meet the demand.

Nitin Acharekar, Head of Enterprise Research, Asia-Pacific, Frost & Sullivan said, “Many enterprises are facing an uphill task in devising effective competitive strategies due to information symmetry in the digital age. Most are digging deeper into their data piles to draw actionable insights.”

Don Cooper-Williams, Marketing and Alliances Director, Asia-Pacific, SAS on his recent visit to India spoke not only of the fact that Indian organisations are ready for BI tools but that there is a genuine need for the same. “CIOs and executives are realising that it is one thing to have huge data and information but converting it into formidable or actionable information is another. Precisely for this reason BI has moved from a tools-based solution, used by a statistician or an individual, to the boardroom or business division,” remarked Cooper-Williams.

The verticals increasingly adopting BI are BFSI, IT/ITeS, manufacturing, pharmaceutical and government. SAS has been at the forefront with majority of its customers from the BFSI segment. Cooper-Williams said, “It is a matter of maturity. Since BFSI matured quite early in terms of IT deployment due to the customer base, acquisitions and mergers, it has been in the forefront of the BI acceptance too. As for the telecom segment, it is IT-savvy due to the ongoing boom.”

Issues such as global competition, retention of customers, data explosion and the requirement to shorten the turnaround time has hastened the adoption of BI among organisations. Cooper-Williams felt, “BI has been used among Indian enterprises under different labels for many years but issues such as competition and globalisation have made the organisations look at BI in an integrated manner.”

According to him, India is at an inflection curve. He also sees a change among the Indian enterprises when deploying BI. IT till recently was segmental and transactional but organisations found themselves facing the problem of dealing with different vendors, solutions, upgradation capabilities, tools and maintenance issues. “Thus it has become a huge cost burden and they are now looking at vendor consolidation. Along with this they have also realised that all these mixed tools lack integration and end up with sub-optimal capabilities,” he added.

If this is what the customers are feeling then the vendors are also quick to realise it. For instance two years back, SAS moved from its tools-based focus to a solution-based focus. Said Cooper-Williams, “We had various tools such as business, reporting, and mining tools, portals and a plethora of other tools. Two years back we realised that if we upgraded these tools into more sophisticated software methodologies and added features like optimisation, we would offer our customers something that they were buying till now in disparate versions. But with this change we were giving them a platform.”

Along with the change in focus, the company also realised that each business vertical had its own problems and issues, and questioned the generic form of a BI platform. “We have already started to design and optimise according to specific verticals. Presently we have solutions catering to 14 industry verticals,” he added.

Acharekar remarked, “While the business intelligence industry continues to grow on the back of this scramble to outwit competitors, the value is tilting towards applications that are away from tools. This is happening due to the increasing commodification of data integration, reporting and query, and analytical tools.”

Spoiling the broth

According to the report the key drivers for the growth of BI implementation are maturing transaction systems like ERP, CRM, and OLTP (Online Transaction Processing) which provide high volume data, market dynamics driving competition, accent on gaining an edge when it comes to business strategy, faster RoI, and compliance and growth in the SMB sector.

As the user base is growing, more companies are coming out with BI solutions. Cooper-Williams felt that this could be a harmful trend. “It is dangerous for a technology company to offer its solution as a commodity. We are talking about intelligence here. It is a technology at one end but has to answer the strategic requirement at the other and needs to be on a platform that has a long-term view and allows enterprise-wide capability,” he said.

Cooper-Williams felt that the entry of non-core BI players in the market has taken place because other technology deployments are coming down or done with. Further, to augment their portfolios these companies are acquiring smaller ones which have such technology offerings and that they want to be ready when their customers ask for such solutions.

However, he pointed out, “To sustain business one needs to have R&D capabilities as customers have ever-growing needs. Besides BI is not driven by vendors but by customers’ needs. They have enterprise capabilities and tools but they do not have integrated tools.”

The report elaborates that some of the market constraints in India are lack of skilled knowledge workers to operate and maintain BI solutions, ineffective collation of data by data-gathering systems which hamper the quality of results provided by BI tools, low awareness on potential benefits of BI implementation and non-optimal utilisation of enterprise systems like ERP and CRM.