Ventana Research has investigated the perceptions and intentions of medium-size and large businesses concerning standardization and consolidation of business intelligence (BI) systems. The results of our study indicate where these companies are in the process of standardization and consolidation and revealed factors that affect the adoption and value of such projects. An analysis of this research leads Ventana Research to conclude that these kinds of projects are more likely to succeed if they are aligned with business objectives beyond IT cost-cutting.
Early in 2005, Ventana Research completed a study of the perceptions and intentions of businesses in regard to standardizing and consolidating their business intelligence (BI) investments. Senior managers from 400 medium-size and large organizations participated in the study. Sixty percent of them had IT roles, and the rest had business roles. More than half of respondents (57 percent) stated that their organizations were standardizing their BI platforms. Most of these (55 percent) were consolidating their BI platforms as well. Ventana Research concludes that while standardization and consolidation of BI has considerable momentum, not every organization has jumped on the bandwagon. What’s more, anecdotal evidence indicates that many user communities find standardization projects to be disruptive, so it is likely that this trend will proceed slowly.
The study shows that the trend is in an early stage. Of those organizations that intend to standardize or consolidate BI, about half are in planning stages, another third are in development or deployment, and the rest (one-sixth) have completed deployment. Most organizations are rolling out their standardized or consolidated platforms one (31%) or a few (23%) applications at a time. Other Ventana Research studies show that BI application rollouts can vary from several months to several years. It is likely that many organizations will take several years to complete standardization of a BI platform. Other anecdotal evidence indicates that some organizations will never complete it; they will allow departments that have unique BI needs to continue using their chosen systems.
IT usually leads standardization and consolidation initiatives. Study results indicate that 35 percent of projects were led by top IT executives, while top line-of-business executives led only 13 percent of projects. Budget owners for these projects were primarily CIOs, CFOs and other top IT executives. Driving the business case for standardization and consolidation were quantified return on investment (ROI; 54%) and total cost of ownership (TCO) calculations (53%). (In many cases, ROI calculations done to justify technology purchases are based on cost savings, because those numbers are easy to calculate and believable.)
Top-ranked benefits for these BI projects reported by IT executives were the reduction of IT support, administration and development costs (42%) and faster response to user needs for new information (39%). The challenge to these projects is that the lines of business often perceive BI standardization/consolidation projects as changing horses in midstream, and therefore disruptive. For this reason, Ventana Research believes that standardization and consolidation projects will be received more warmly if they can be justified as advancing business objectives beyond cutting IT costs. The top-ranked business benefits for these projects reported by respondents were broader, more consistent enterprise views (38%) and the provision of “a single version of truth” to users (41%).
The initiatives often were broad. According to respondents, 74 percent of these projects were enterprise-wide, as compared to 16 percent divisional and 6 percent departmental. Juxtaposing these findings to the favored business benefits, Ventana Research concludes that organizations seek consistent views not just within a division or department, but across the entire enterprise. So a key trend is that standardization assists with gaining consistent enterprise-wide views. This, too, supports Ventana Research’s view that aligning these initiatives with key business mandates will accelerate adoption.
When customers touch the organization at many points, companies are vulnerable to incomplete views of their relationships. Similarly, organizations that have complex supply relationships are vulnerable to limited visibility into manufacturing and supply. Acquisition of BI technology is much more likely to appeal to lines of business to consolidate views of customers, products and other key business entities than for IT-centric reasons. Ventana Research believes that streamlining information infrastructure within the business is and will be a leading technology investment mandate for the foreseeable future. Clearly, standardization and consolidation of BI systems fits that mandate.
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