A question of intelligence

FST. How can better analytics help organizations address regulatory compliance?

DV. Government regulations are making organisations store more information and more historical data. However, at the end of the day its not just about storing that data but also being able to retrieve it if there is an audit or requirement from government or an industry body. That’s where BI technology comes in. It gives the ability to retrieve that information, analyse it and look at the trending.

FST. Many companies are turning compliance into an opportunity for business improvement. How are companies making use of compliance-related software and tools to provide business flexibility, efficiency and financial advantage?

DV. I think, theoretically, there is that link. If you go to the trouble of storing all this data because you’re required to, then you can also leverage the same information to improve your business processes. But this hasn’t always proved to be the case. There are both legislative reasons and practical business reasons for that. Part of it is that in some cases the compliance databases are cordoned off from the rest of the organisation. In some cases that data cannot be manipulated or touched in a way that would be more appropriate by business managers because it needs to retain its original structure for audit purposes.

But I think that over time organisations will figure out how to duplicate and replicate that data and open it up for performance management in ways that will not violate compliance policies. Having said that, even in organisations that have a separate compliance data store, there will also be business data stored in more traditional data warehouses that can be used for business intelligence and data management.

FST. Are there real, tangible benefits to the implementation of BI solutions and how can this ROI be measured? What do you see as the main difficulties facing companies seeking to implement such solutions?

DV. There certainly are tangible benefits. If there weren’t then there would be no reason to do any BI implementations. I think where the failures and more publicised challenges have been highlighted, is when the IT department takes the lead. It builds the data warehouse, and stores the data, but it can potentially start collecting the wrong data or fail to use the correct key performance indicators to report for the business.

Usually success comes from top down deployment where there is strong executive support. The business defines what information it is looking for, in what format, how they want to analyse it and IT then executes based on that.

Some of the benefits are in the shape of productivity gains. Companies can suffer if it takes them a couple of weeks or months to find some information or do some analysis, or if the detailed information they need can’t be accessed. Then there are the real top and bottom line benefits of being able to more accurately target customers with marketing campaigns or being able close your books faster. IDC has done significant research over the years that shows strong ROI from BI projects. For example, in the financial services sector deployment of fraud detection or anti money laundering applications have immediate top and bottom line financial benefits.

FST. How do you see BI uptake progressing in the coming months and years? What developments will drive market growth?

DV. We have an annual growth estimate of slightly over 10 percent for the broader business analytics market over the next 5 years. The interest in BI remains very strong, both because of compliance and because of performance management. Part of it is driven by deregulation in many industries that results in more competition. This in turn drives the need for more efficiency and more transparency in an organisation, a requirement that can at least partly be satisfied with business intelligence solutions. Our surveys show that BI is a top priority for IT leadership, usually right up there alongside security. We expect fairly robust growth over the next couple of years considering the relative maturity of this technology. Its not new, but it continues to grow. BI has reached a level now where it is increasingly easy and quick to implement, so inevitably it’s becoming a more attractive proposition.