The business intelligence market continues to grow

The nature and usage of BI has evolved in the last few years. Historically, BI was an “after the fact” activity, that involved building large data warehouses to analyze historical data to look at trends over the preceding weeks, months, and years. But more recently, BI has expanded beyond this model, as organizations increasingly look to bring the value of BI closer to operational processes and day-to-day activities. It has become clear that front-line employees can provide better service to customers, work more efficiently, and make better day-to-day decisions given the right information. For example, rather than exclusively analyzing historical customer information to analyze spending and loyalty trends, organizations can give their call center agents critical customer information while they’re on the phone with that customer, so that they can easily what products a customer has purchased, the customer’s service history, and the company’s inventory of products. Frequently, these critical pieces of information reside in separate systems.

BI can be a very effective solution for bringing this type of information together, and delivering it directly in the context of a business user’s operational application. However, it requires a different technology and implementation approach than traditional data warehouse-centric BI. Traditional BI technologies often require complex metadata layers or OLAP cubes to provide meaningful information from an operational system. Beyond that, most of these BI suites were architected on the notion that BI would be a “self-contained” application, where business users would spend hours analyzing data. For both of these reasons, traditional BI suites are therefore extremely limited in their ability to bring the value of BI to operational processes.

Beyond BI, many important technology trends are shaping IT architectures and standards in organizations large and small. In an effort to reduce costs and increase flexibility and agility, many organizations are gradually moving toward Service-Oriented Architectures (SOAs). The Financial Services industry has been one of the most rapid adopters of this kind of IT architecture, given the continuing rapid technology evolution and historical complexities of information technology in these organizations.

Unfortunately, most BI vendors are ignoring this evolution in their customers’ environments. Organizations implementing SOAs want componentized technologies, and seamless integration via open standards. But traditional BI vendors are building monolithic “stacks” that look more like the ERP systems of the early 90’s – complex, tightly integrated via proprietary APIs, and architected with an expectation that a customer would use the entire suite of products in order to have a successful deployment. This is not to suggest that organizations may require a broad range of end-user BI needs, only that they should not be required to deploy a monolithic “stack” that doesn’t fit their preferred architecture to achieve it.
Pentaho Corporation was founded in 2004 by a team of BI industry vendors to address these and other challenges. Utilizing a proven and yet revolutionary commercial open source business model, Pentaho is quickly establishing a leadership position in the next major phase of the BI market. The Pentaho Open BI Suite provides comprehensive end-user BI capabilities including operational and analytical reporting, OLAP analysis, and dashboards. Pentaho also provides a BI platform that supports these end-user capabilities with robust security, management, scheduling, and distribution capabilities. The Pentaho Open BI Suite is tightly integrated via popular open standards including XML and Web Services, and allows organizations to deploy as much or as little functionality as they need, in a cost-effective model that can’t be matched by traditional, proprietary BI vendors.

The Pentaho BI Platform is architected to address the growing need for operational BI. It provides a workflow engine at its core, and supports orchestration by external processes via the BPEL standard. Many organizations have business processes that extend well beyond BI, but include critical BI components. Pentaho is unique in its ability to seamlessly support and integrate with these business processes, and deliver the value of BI directly within your organization’s operational processes.
From an end-user perspective, Pentaho provides broad functional coverage. Some users will want operational or management reports delivered in their e-mail every week with regular updates on new customers added, divisional revenues, or actual spending versus budget by department. Others may want to interact with parameterized reports online, letting them select the time periods, product lines, or geographies they’re interested in for a standard report. Power users and analysts typically want OLAP functionality to uncover root causes or analyze trends. They want to “slice and dice” the data, drilling into lower levels of detail. Dashboards are an increasingly popular interface for managers and executives as they allow immediate visibility into key performance indicators (KPIs) and enable “management by exception”, using sophisticated alerting capabilities to notify key employees when a given metric or KPI has gone outside of required targets. Pentaho covers this full spectrum of end-user functionality on a common platform, to maximize business benefits for users while minimizing costs for IT. The Pentaho BI Platform simplifies IT administration by providing one place to administer users, security, integration with other systems, scheduling, and more.

The emergence of the open source development model, and the commercial open source business model are creating the same disruption in the BI market that they’ve already created in other technology markets. MySQL has quickly moved into the mainstream of the relational database market, and the JBoss application server has by some measures already established itself as the most popular application server available. The Financial Services sector was one of the quickest to adopt the Linux operating system, recognizing not only cost savings, but clear technology and business benefits derived from open source platforms. In many instances, organizations are deploying “extranet” applications to share information with customers and partners outside the firewall, and open source technologies are providing the functional capabilities, architectures, standards, and cost-effective deployment models to make them ideal for these types of applications. In fact, one of Pentaho’s key customers, a leading travel services company, uses the Pentaho Open BI Suite to power an extranet serving over 2,500 travel agents. They already had another BI tool deployed internally from one of the big, proprietary BI vendors, but that product couldn’t meet the technical requirements, and wasn’t cost-effective for a large-scale extranet application.

Many of these same dynamics are challenging the market position and business models of the traditional, proprietary BI vendors. A 2005 Goldman Sachs research paper states that the top 3 BI vendors all spent more than 90% of new license revenues on sales and marketing last year. Beyond that, their R&D spend is often inflated by the extra costs associated with legacy technologies, and engineering for migration for large, legacy installed bases. In contrast, Pentaho is able to innovate more rapidly because it has a much more modern architecture, and uses the most current technologies and standards. These same standards were also built to allow loose coupling of systems, and future upgrades without reimplementation or extensive re-work.

The financial services industry provides many opportunities to leverage BI to improve performance. Whether you want to improve customer loyalty, increase wallet share, streamline your loan processes, or better align employees at all levels to the key goals and metrics of the firm, Pentaho provides the capability that you need. And the proven, commercial open source model delivers additional benefits including access to source code, comprehensive support, the ability to try out or deploy the software for free, and ultimately to deliver world-class BI applications at a small fraction of the cost of traditional, proprietary BI suites. Visit www.pentaho.org for more information.