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Putting Analysis Back in BI

Business intelligence is more than just reporting.

Summary
In the late 1990s, business intelligence (BI) included query, reporting and analysis. Today, despite having analysis capabilities, large BI vendors focus mostly on reporting. Now, though, other vendors are taking up the challenge and delivering on the business value of analytics.

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Business analysis goes beyond simply reporting what has happened. It identifies the causes and relationships responsible for the current state of business performance, predicts how strategic and tactical changes will impact that performance, and determines how to allocate resources most effectively to achieve business goals.

Analysis can provide business value by identifying actions to take to improve future performance. In the pharmaceutical industry, it can help companies determine whether to do a proof of concept for a new drug candidate or go straight to phase III trials. In telecommunications, it can help companies determine what value-added services to cross-sell and up-sell based on customer profiles. Or it can help insurance companies determine suitable levels of reinsurance based on portfolio risk.

A broad spectrum of software can provide analysis to improve decision-making. The choices include online analytical processing (OLAP) servers that define relationships between metrics and multiple dimensions of performance drivers; data mining and statistics tools that model future outcomes based on historical trends; mathematical and financial functions that help prioritize competing requests for capital; and visualization tools that improve the analysis of large data sets.

There is a group of BI software vendors that make analysis their primary focus; these are companies that understand specific vertical or functional problems and how BI can address them. This group includes vendors such as Spotfire, whose life sciences solutions are being used by Pfizer; SAS, whose telecommunications solutions are being used by Sprint; and Fair Isaac, whose insurance solutions are being used by Travelers Group.

Assessment
Ventana Research recommends that companies evaluate the analysis capabilities of their current BI products and ask how they can use these capabilities to move from simply reporting on what happened to understanding why it happened and deciding what actions to take to make improvements. They also should determine how much time and money it would take to build systems to meet their particular needs and compare the findings to the cost and applicability of purchasing packaged software.

About Ventana Research
Ventana Research is the leading Performance Management research and advisory services firm. By providing expert insight and detailed guidance, Ventana Research helps clients operate their companies more efficiently and effectively. These business improvements are delivered through a top-down approach that connects people, process, information and technology. What makes Ventana Research different from other analyst firms is a focus on Performance Management for finance, operations and IT. This focus, plus research as a foundation and reach into a community of over two million corporate executives through extensive media partnerships, allows Ventana Research to deliver a high-value, low-risk method for achieving optimal business performance. To learn how Ventana Research Performance Management workshops, assessments and advisory services can impact your bottom line, visit www.ventanaresearch.com.
2006 Ventana Research

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