Ajay Ohri of DecisionStats.com has posted my email interview on Business Intelligence trends – you can read a copy below.

What do you think I missed?

Top five events in 2010:

(1) Back to strong market growth. IT spending plummeted last year (business intelligence continued to grow, but more slowly than previous years). This year, organizations reopened their wallets and funded new analytics initiatives — all the signs indicate that BI market growth will be double that of 2009.

(2) The launch of the iPad. Mobile BI has been around for years, but the iPad opened the floodgates of organizations taking a serious look at mobile analytics — and the easy-to-use, executive-friendly iPad dashboards have considerably raised the profile of analytics projects inside organizations.

(3) Data warehousing got exciting again. Decades of incremental improvements (column databases, massively parallel processing, appliances, in-memory processing…) all came together with robust commercial offers that challenged existing data storage and calculation methods. And new “NoSQL” approaches, designed for the new problems of massive amounts of less-structured web data, started moving into the mainstream.

(4) The end of Google Wave, the start of social BI. Google Wave was launched as a rethink of how we could bring together email, instant messaging, and social networks. While Google decided to close down the technology this year, it has left its mark, notably by influencing the future of “social BI”, with several major vendors bringing out commercial products this year.

(5) The start of the big BI merge. While several small independent BI vendors reported strong growth, the major trend of the year was consolidation and integration: the BI megavendors (SAP, Oracle, IBM, Microsoft) increased their market share (sometimes by acquiring smaller vendors, e.g. IBM/SPSS and SAP/Sybase) and integrated analytics with their existing products, blurring the line between BI and other technology areas.

Top three trends next year:

(1) Analytics, reinvented. New DW techniques make it possible to do sub-second, interactive analytics directly against row-level operational data. Now BI processes and interfaces need to be rethought and redesigned to make best use of this — notably by blurring the distinctions between the “design” and “consumption” phases of BI.

(2) Corporate and personal BI come together. The ability to mix corporate and personal data for quick, pragmatic analysis is a common business need. The typical solution to the problem — extracting and combining the data into a local data store (either Excel or a departmental data mart) — pleases users, but introduces duplication and extra costs and makes a mockery of information governance. 2011 will see the rise of systems that let individuals and departments load their data into personal spaces in the corporate environment, allowing pragmatic analytic flexibility without compromising security and governance.

(3) The next generation of business applications. Where are the business applications designed to support what people really do all day, such as implementing this year’s strategy, launching new products, or acquiring another company? 2011 will see the first prototypes of people-focused, flexible, information-centric, and collaborative applications, bringing together the best of business intelligence, “enterprise 2.0”, and existing operational applications.

And one that should happen, but probably won’t:

(4) Intelligence = Information + PEOPLE. Successful analytics isn’t about technology — it’s about people, process, and culture. The biggest trend in 2011 should be organizations spending the majority of their efforts on user adoption rather than technical implementation.

More content from Decisionstats.com:

• See the views of James Kobelius
• See the views of Jill Dyche

Governance, Risk and Compliance

IT and Finance: “We both work for the same company… so why is there so much tension”?

Product information about SAP GRC

BusinessObjects Explorer for Finance:

“I got the voice message when I was still at the restaurant. At first all I could hear was static, cars honking… and then the voice of James, my company’s CEO. He was stuck Mumbai traffic on the way to the airport…”

Product information about BusinessObjects Explorer

Explorer for Sales & Marketing

SMS from the CFO: “e.u.forecasts xtracold winter.pls correlate top hot snax/yr/ctry 4am board meeting”.

Product information about BusinessObjects Explorer

Explorer for IT

“Wow – look at all the snacks we sold.”

Product information about BusinessObjects Explorer

Enterprise Performance Management: Consolidation & Management Reporting

“My daughter Anna drew this… this big puff of smoke? That’s supposed to be me, doing what my wife calls my seven-day-a-month disappearing act…hours stuck in spreadsheet hell”

SAP Enterprise Performance Management product information

Enterprise Performance Management: Planning, Budgeting, and Simulating

“Budgets and planning time… a recurring corporate crisis, but we have to do it… monthly, quarterly, or yearly, we decision-makers gather with all our reports and projections and then it begins! [‘oh please, this is so ridiculous…’]”

SAP Enterprise Performance Management product information

As a 19-year veteran of SAP BusinessObjects, I’m delighted to have the opportunity to be a “social ambassador” for business intelligence and analytics for SAPPHIRE NOW in Frankfurt.

Whether or not you have any SAP products, and whether or not you’ll be attending the physical events, there’s going to be lots of great new information of interest to anybody involved with business intelligence and performance management. My job will be to help you get the most out of the event, through a combination of blog posts (on this site, and on the SAPPHIRE NOW blog site, tweets, and on the SAPPPHIRE NOW YouTube video channel (and no, I don’t intend that to involve being a “we love SAP faux presence” — I’m passionate about BI, and intend to share what I find interesting and useful)

This year will see the fruition of lot of the plans we’ve been working on since the Business Objects was acquired by SAP in October 2007. Along with the traditional product updates and customer experience presentations, here are the topic areas I think will be of particular interest:

1. The increased integration between SAP BW with BusinessObjects front-end technology. The conference will include sessions from real-life integrations experiences, for example Accenture and Shell will give a detailed review of their experiences with BusinessObjects and BW
2. The integration of SAP in-memory processing technology with BusinessObjects front-end tools for “instant value” against ANY data source
3. The continued development of BusinessObjects technology into cutting-edge areas such as on-demand, enterprise collaboration, social networking analysis, mobile BI, and augmented reality.

This post covers some of high-level logistics of SAPPHIRE NOW, and points out some resources that might be of interest — since everything is going to be recorded and available online as part of the http://sapphirenow.com web site, I’ve included sessions that might interest you from both Orlando and Frankfurt.

SAPPHIRE NOW in a nutshell

• As part of a move towards the “conferences 2.0”, there will be live coverage on the SAPPHIRE NOW web site, for free, with over 400 live sessions in HD video (and on-demand after), which may make it one of the biggest online conferences ever — register now!

• Two simultaneous physical locations: Frankfurt and Orlando, May 17th-19th (Orlando also features sessions organized by ASUG)
• Keynotes from visionaries and SAP executives, on business trends, current products, and future directions. (Frankfurt, Orlando)
  
• Four “campuses” (Industries, Lines of Business, Innovation, and Small Businesses and Midsize Companies), each with a full agenda of panel sessions, presentations, and discussions, and live demo areas (Frankfurt, Orlando)

• A full set of programs from the on-site Broadcast Centers. You can attend the sessions live in the studios, or follow them online.

BI, Analytics and BusinessObjects @ SAPPHIRE NOW

The BusinessObjects portfolio of products will be ubiquitous at SAPPHIRE NOW, present in all four campuses, and featuring in over TWO HUNDRED sessions (full lists Frankfurt Orlando). There are suggested, customizable agendas in the online agenda builder:

Frankfurt

• Business Intelligence (I’ll be attending as many of these sessions as I can)
• Finance

Orlando

• Business Intelligence for Data Centric user
• Business Intelligence for Managers/Executives
• Business Intelligence for SAP Users New to SAP BusinessObjects Portfolio
• SAP BusinessObjects for New Customers
• Finance – Compliance
• Financial Planning, Forecasting, and Profitability

These agendas only scratch the surface of what is available, so I’ve tried to group some of the key sessions by topic of interest below. Note that most presentations are a short-and-sweet 20 minutes long (which will be available online for viewing after the event), but are then followed by a separate interactive 20-minute discussion session in an adjoining room – make sure you remember to build that into your agenda if you’re physically on site and interested in participating.

Understanding the product line

The SAP BusinessObjects suite of products helps close the loop between strategy and execution – here’s a short video that gives an overview:

Here are some of the key sessions for understanding what products are available, and how they fit in with your needs and technical landscapes:

• The SAP BusinessObjects Portfolio: Solutions from A to Z. Long-time BusinessObjects employee Paul Clark delivers his famous portfolio overview.
• Choosing your BI Solution for your SAP NetWeaver BW Landscape will take a look at the options you have as a customer, which deployed SAP NetWeaver BW as your data warehouse solution.
• Pick the right SAP BusinessObjects BI Tool. This session will explain how you can use your user requirements and match the SAP BusinessObjects BI portfolio to those requirements and select the right tool for the job. This session will be relevant independent of your underlying data sources.

We’re also working on a brand-new SAP Solution Advisor for BI tool. If you would like to provide feedback, please register for a Test Drive session.

Customer presentations

Hear how organizations like yours are using analytics and performance management to improve the way they do business. Note that this is only a small selection of the many sessions available. You can use the Advanced Search option to find customer sessions in your industry (Frankfurt Orlando)

Frankfurt:

• Unilever’s Workflow for Master Data: Unilever, a global consumer-goods company, is pioneering the use of SAP NetWeaver Business Process Management and SAP NetWeaver Master Data Management to create business processes that manage master data through creation and registration to establishment and enhancement. Learn about the strategy behind this initiative and the techniques involved in making it happen, moving from pilot implementation to global rollout.
• Shell’s SAP BusinessObjects Decision Dashboard Built On SAP NetWeaver Business Warehouse: With Shell’s Financial Mgt and Operational Reporting decision dashboard, 6500 managers in 23 countries are making better decisions. The dashboard delivers a standardized, organizationally aligned, and vertically integrated solution using SAP BusinessObjects WEBI and Xcelsius for the frontend, drawing data from an SAP Business Warehouse which consolidates the data from a completely heterogeneous system landscape. Learn how Shell is minimizing complexity and cost, reusing global processes and tools; and decommissioning standalone solutions with this groundbreaking management tool.
• See, Think, and Act Clearly to Drive Performance in Upstream Operations. The primary success criteria for an upstream oil and gas enterprise is safe, efficient, effective, and responsive production of hydrocarbons. See how companies can manage the performance of their operations, while simultaneously balancing safety, production, and cost objectives and constraints across their asset operations. Discover the new capabilities SAP is delivering for upstream operations performance management
• PANEL: Managing Information for the Enterprise: Insights and Actions for Executives. Information is a valuable corporate asset, yet less than half of companies have effective business intelligence and enterprise information management strategies. Listen to a panel of successful organizations using information for competitive advantage to deliver better business insights, improve efficiency, and ensure compliance mandates.  (Along with representatives from Shell, Unilever, and Harrods, this session will feature SAP’s CIO, Oliver Bussmann, SAP’s own CIO, talking about how we implement BusinessObjects at SAP)
• Clarity at Consol Glass. Glass containers use colors, such as amber, to protect content. But, to see the liquid with clarity, it must be poured into colorless glass. See how Consol Glass is seeing with clarity by pouring its business intelligence content into SAP BusinessObjects Explorer, uncovering never-before-seen insights.
• …and many others

Orlando:

• Why public service programs need good data?. A major challenge with CRM projects is managing data-quality and integrating all business-partner information. Learn how Florida Department of Revenue (FDOR) uses SAP BusinessObjects Data Services to integrate, cleanse, and standardize their customer data and data from external agencies.  For FDOR it is more than just managing data quality, it is about ensuring that bad data doesn’t impact the public citizens and participants of the various public service programs. This session will demonstrate how SAP BusinessObjects Data Services and BI/BW in CRM projects has replaced FDOR’s complex ABAP routines, and transformed FDOR data into a trustworthy corporate asset.
• Harnessing the Power of SAP BusinessObjects BI Solutions. Discover how Newell Rubbermaid leverages SAP BusinessObjects BI solutions to make faster, more informed, and accurate business decisions. By combining the SAP NetWeaver Business Warehouse Accelerator (BWA) with SAP BusinessObjects BI software, Newell has achieved usability, speed, and scalability targets to fully leverage investment in SAP BusinessObjects BI solutions – including SAP Objects Explorer Accelerated, Mobile, Web Intelligence, and Xcelsius.
• Kraft Foods Finds A Single Source of Truth. Learn how Kraft Foods established an award-winning global data governance model by adopting SAP NetWeaver as the backbone of its enterprise information management and business transformation strategy. In less than nine months, Kraft deployed SAP NetWeaver Master Data Management to integrate and consolidate data from SAP and non-SAP legacy systems for its North American roll-out of SAP ERP.
• …and many others

Key BI technology trends covered at SAPPHIRE NOW

Core Business Intelligence. There are some great sessions on business intelligence deployment including Best practices for deploying Web Intelligence to Business Users, Walt Disney Parks on From Excel to SAP BusinessObjects: An Income Statement Story, and SAP BusinessObjects Web Intelligence XI 3.1 – Bring it On!

Finance, Performance Management, and GRC. There are suggested session agendas available for anybody interested in finance (see above). If you’d like a high-level overview, there’s a session on the latest advances and future directions of SAP solutions for financials; enterprise performance management; and governance, risk, and compliance (GRC) (Frankfurt Orlando)

In-Memory Analytics. The lower costs of in-memory processing is making huge changes in how we can deal with information. Keynotes (Frankfurt Orlando) and track sessions (Frankfurt Orlando) will cover how this new technology is resetting the bar on what’s possible with analytics, and introduce you to SAP’s products in this area, including BusinessObjects Explorer Accelerated. There’s also a panel session with customers discussion how they are using this solution in their businesses.

On-Demand Business Intelligence. There will be a dedicated on-demand area in the innovation campus, featuring SAP’s on-demand BI solutions, and you can sign up for a free account that lets you update and analyze information online, or access it via mobile devices. Get an overview of our BI OnDemand future directions, find out how Enterprise 2.0 platform vendor Jive uses our on-demand BI analytics to power their analytics module, and take part in microforums where you can give your input into SAP’s strategy (Orlando Session 1, Session 2). We also “drink our own champagne” and there’s a session that covers how SAP itself uses BI OnDemand.

Collaborative Decision-Making and Social Analytics. The brand-new SAP StreamWork collaborative decision-making product will be featured in the innovation campus, and covered in sessions in Frankfurt and Orlando ( Session 1 Session 2). But nothing is as good as trying it out yourself, so sign up for the free edition (you can use the same login as for BI OnDemand) and give us feedback in the microforum sessions (Frankfurt, Orlando). In addition, the SAP Social Network Analyzer prototype will be featured in the demo area of the innovation campus.

Operational BI. You’ll see BusinessObjects reports and dashboards embedded in SAP applications throughout the show and there’s a dedicated session, “Operational BI: Expanding the SAP Technology Platform” in the Innovation Campus to show how businesses can gain real-time visibility into a company’s operations (Frankfurt Orlando)

Sustainability Performance Management and Measuring Your Carbon Footprint. Sustainability is a major theme for SAP, and there are over 100 sessions that touch on the subject at SAPPHIRE NOW (full lists: Frankfurt Orlando). There’s a dedicated sustainability area and sessions in the innovation campus featuring the SAP Sustainability Performance Management product launched last year that helps customers drive achievement of sustainability objectives through target setting, measuring progress, and monitoring achievement ( Frankfurt Orlando). There are also sessions covering the SAP Carbon Impact product that helps you accurately measure and report your enterprise carbon footprint (Frankfurt Orlando)

Mobile BI. Mobility will be a key theme of the conference. Help us drive strategy by attending a mobility microforum (Frankfurt Orlando). Find out how Dow Corning has delivered mobile BI to its employees with SAP BusinessObjects Explorer for iPhone and iPad and RoamBI. Check out BusinessObjects Mobile, and try out the products yourself in the mobility area of the innovation campus (and you might even get a sneak peek at a bit of “augmented corporate reality”)

Exhibition hall

If you’re going to be at one of the physical locations, make sure you find the time to visit the exhibition booths for lots of other BI / Analytic products and services from SAP Partners (Frankfurt Orlando)

Other resources

During the show, I’ll be one of the people tweeting out from the BusinessObjects twitter account, and you should follow me directly at http://twitter.com/timoelliott.

So there you have it: more information than you can possibly process, just like the whole reason for BI in the first place.

Next week sees the start of the Nordic SAP BusinessObjects BI Forums in Stockholm (April 13), Copenhagen (April 15), Oslo (April 27), and Helsinki (April 29). Join us for these free events to find out:

“…how successful industry leaders turns data into insight-driven business decisions. Don’t miss out on this exclusive opportunity to learn from managers and experts how to optimize your business performance. This is the conference day of the year for business users with a professional interest in business intelligence (BI); information management (IM); enterprise performance management (EPM); and governance, risk, and compliance (GRC).”

I’ll be presenting the morning keynote in each location – view the video below to get a quick overview of the topics I’ll be covering.

You can register for the events here, and I look forward to seeing you there!

[Update:
Here's the keynote presentation as a pdf file, and as a ppt file
Here's the BI session presentation as a pdf file, and as a ppt file]

Turkey is investing heavily in business intelligence. It was  SAP’s 2nd-fastest growing region worldwide last year. Nine out of the top 10 Turkish banks use BusinessObjects, and 3 out of the top 4 telecom companies.

I presented the keynote presentation at the SAP BusinessObjects BI Forum in Istanbul this morning, on the theme “The Clear Intelligence Future: Simple, Seamless, Social, and Strategic”. It covers the current trends in the analytics market, and shows off SAP BusinessObjects products and prototypes that optimize these trends.

It’s a slightly updated version of a presentation previously posted on the blog. To download the presentation in PowerPoint format, including two of the demonstrations (Explorer and Social Network Analyzer) and the Xcelsius dashboard files used, click here (28Mb).

I’m trying to catch up on a big backlog of materials and documents and documents that I’ve found useful…

Here’s an excellent best practices report from TDWI on “how to create and deploy effective metrics” (registration required). The introduction to the document explains the background:

Performance metrics are a powerful tool of organizational change. The adage
“What gets measured, gets done,” is true. Companies that define objectives, establish goals, measure progress, reward achievement, and display the results for all to see can turbo-charge productivity and gracefully move an organization in a new direction.

Executives use performance metrics to define and communicate strategic objectives tailored to every individual and role in the organization. Managers use them to identify underperforming individuals or teams and guide them back on track. Employees use performance metrics to focus on what’s important and help them achieve goals defined in their personal performance plans.

But performance metrics are a double-edged sword. The wrong metrics can have unintended consequences: they can wreak havoc on organizational processes, demoralize employees, and undermine productivity and service levels. If the metrics don’t accurately translate the company’s strategy and goals into concrete actions that employees can take on a daily basis, the organization will flounder. Employees will work hard but have nothing to show for their efforts, leaving everyone tired and frustrated. In short, the company will be efficient but ineffective.

The document then goes into to look at lots of different aspects of creating and deploying KPIs and dashboards. Having read a lot of books in this space, I’d say this is a great, non-nonsense overview. I’ve included some of the key graphics and charts below to give you a flavor of the contents…

IDC recently released several reports on business analytics market shares, including business intelligence and performance management:

• Worldwide Business Analytics Software 2009 – 2013 Forecast and 2008 Vendor Shares, IDC #219383, August 2009
• Worldwide Financial Performance and Strategy Management 2008 Vendor Shares: Market Consolidation Drives Domination, IDC #218656, June 2009
• Worldwide Business Intelligence Tools 2008 Vendor Shares, IDC #218598, June 2009

You’ll have to subscribe to IDC’s excellent service to get the full details, but if you look carefully through industry articles and vendor samples of the reports you can get many of the key figures and information about how IDC divides up the analytics market.

Here’s my interpretation of the big picture trends:

1. It’s a race between Oracle and SAP. IDC divides the analytics market into three main areas, all roughly the same size (there is also a fourth area, Spatial Information Analytics, but this makes up only around 3% of the overall market)

• Performance management and analytic applications (SAP #1)
• Business intelligence tools (SAP #1)
• Data warehousing platform software (Oracle #1).

Both Oracle and SAP are growing faster than the market average, implying consolidation around the market leaders (although some of the top growth figures came from some of the smaller vendors in the space).

2. Oracle’s lead is narrowing, with SAP is coming on strong… Oracle leads the overall analytics market by IDC’s definition, but Oracle’s growth has slowed since last year, while SAP’s has increased. Oracle is losing market share in its traditional area of strength (data warehousing platforms) where the #2 and #3 (IBM and Microsoft) both grew faster. SAP is growing faster than Oracle overall and in each of the three main areas.

3. …Particularly in FPSM. Thanks to the acquisition of Hyperion, Oracle has been the leader of what IDC calls the Financial Performance and Strategy Management Applications market (part of the analytic applications area) since 2006. But some key acquisitions by #2 SAP (including Pilot and Business Objects) have narrowed the gap considerably, and SAP experienced almost 3x Oracle’s growth over the last year.

Are the Numbers Accurate?

It’s human nature to assume that any set of numbers is more trustworthy than simple rankings. But just how accurate are the numbers, really?

IDC puts a lot of effort into gathering and interpreting the market share figures, and takes a lot of care to allocate the total vendor revenues among the various markets in which they participate. Despite this, there are at least three reasons that the numbers they provide are necessarily inexact.

• First, the numbers can never be more than IDC’s “educated guesses.” Companies that cover multiple market segments almost never publicly break out revenue according to IDC’s groupings, and so are not allowed to provide them selectively to IDC. IDC works with the vendors to try to ensure that there are no obvious mistakes, but there’s an incentive for vendors to try and influence the numbers in their favor (e.g. they may try to persuade IDC that some of the revenue from an area where they are a clear leader should instead be allocated to an area where they are the #2, making them the #1 in both markets).
• Second, even the vendors may only have a hazy idea of the exact revenue that comes from each area. Companies typically purchase related products from vendors in a single deal, and then haggle over the discount amounts. And a single vendor “product” may bundle elements from several different IDC categories. The allocation of the final deal amount between the different components (for example, a database, a data warehouse, some BI tools and some financial planning and budgeting tools) can vary over time, and may be different for different companies. Public companies have to respect some limits set by the SEC concerning revenue recognition, but private companies have a lot of discretion when it comes to stating their revenues (and this does not just concern the smaller vendors — SAS, the #4 vendor overall, is privately held).
• Third, different vendors sell through different channels. If a company sells directly to the final customer, the market share is the same as the revenue, but if it sells through resellers (who make a margin), the real market value of a product may be under-represented by the revenue reported by the vendor. This isn’t technically an inaccuracy, since IDC is explicitly measuring vendor revenues, but it makes it harder to interpret what the numbers actually mean.

Overall, these are marginal concerns, and the overall rankings are probably correct, but I would love to see IDC provide estimates of margins of error directly within the reports, making it easier to know whether small differences are in fact important.

Does Top Market Share Mean that the Vendor has the Best Products?

What do the market share numbers actually mean? What do they imply? What action could or should be taken based on them?

Obviously the vendors and their shareholders care about who’s selling the most (although even then share price typically depends more on profitability than overall revenue). But should anybody else?

Typically, a claim of having the top market share is used to imply that the products are the best ones available in the market (and that is why they are selling so well). But is it true?

Well, yes, they probably are – but in the same way that the #1 in the music charts represents the “best music”.

Just as the top-selling music has the broadest appeal, the leaders have the most broadly useful products. However, just as your own musical tastes might involve something more niche, it may be that a niche BI product or analytic application may be the best for any particular project (which is why there will always be small, focused vendors in the space).

However, the analytics choice most organizations have to make is akin to having to choose the music that will most appeal to all of the different employees in your organization, rather than the music you personally like best. This means most organizations probably shouldn’t choose niche products, because of the value of being able to combine information across different project silos, and because people need multiple different types of access to information.

For example, a sales manager may need a dashboard to track key sales metrics, an OLAP tool for budgeting, an analysis tool for investigating the sales pipeline, and some regular HR reports about team vacation planning. And she would like the data in these reports to be consistent from one usage to another, even when the data in the reports comes from multiple different systems and platforms.

Different products from different vendors may be the “best” niche solutions for each of these needs, but forcing the sales manager to use four unrelated systems, and cope with the inevitable data differences between them, is unlikely to be the best real-life solution. And of course, it’s typically more expensive to deploy multiple solutions than different front ends from the same vendor.

It’s also worth noting that the major vendors may also provide the best niche solutions in many cases, since they typically became major vendors by having the best products in the first place, or grew through the acquisition of other best-of-breed vendors.

So one reason that vendors emphasize market share is because it’s at least somewhat correlated with product quality. Most organizations do a thorough evaluation of the tools available in the market before choosing, and the majority of transactions are extensions to existing deployments, so market share is in some ways the most extensive “customer satisfaction survey” you will ever see. And rather than just ticking boxes, companies and individuals actually have to back up these judgments with money and their reputation.

Other Advantages of Market Share

In addition, choosing a product from a larger vendor provides some tangible benefits above and beyond the quality of the products themselves:

• More support for a wider set of architectures and interfaces. There are economies of scale for supporting different platforms, and larger vendors are likely to have more resources for keeping up with the latest versions of the systems that make up your core information environment, and tighter technical relationships (such as getting earlier access to the next generation of new products). Smaller vendors are typically forced to concentrate on a particular platform or environment. This is of course fine if your environment is supported, but not if you have a complex environment, or may need to change in the future.
• Worldwide services and support. Larger vendors are more likely to be able to support your local language and support requirements. Again, this would not apply to a small vendor in your country who is working in your language, but may be a problem if you need to span geographic locations now or in the future.
• Vendor ecosystem. The success of BI projects are about more than just technology. Larger vendors typically have a more extensive network of consulting and training partners, more other companies you can talk to about using the tools, and higher availability of employees with skills in the vendor’s technology.
• Less risk. The market is undergoing consolidation, and smaller vendors are more likely to go out of business, or be acquired.

There are certainly factors that could also argue in favor of smaller vendors. For example, they may be more responsive, since you represent a larger part of their business, or more innovative, since they have a smaller installed base to maintain, and a stronger incentive to innovate in order to be able to win deals against the bigger players. And they may be more open, with less incentive to tie you to additional products in the vendor’s portfolio (but by the same token, they make be less integrated with the other tools that do you have).

On average, software markets typically consolidate around a small number of larger organizations, showing that in the long run the benefits of size outweigh the potential downsides. And the fact that purchasers don’t want to take “risks” with smaller vendors and that this “winner takes all” trend is firmly embedded in the consciousness of corporate buyers everywhere makes it even more of a self-fulfilling prophecy.

Which Vendor is the Leader?

What does “market leadership” refer to? Is the “leading” product the one with the biggest market share? Or the highest quality? Or the the highest growth? Or some combination of the above?

Clearly, the term is open to interpretation, and vendors often spend considerable effort to find a marketable leadership claim – even to the extent of trying to tailor or invent market segments in which they are the leader (for example, Arbor software essentially invented the “OLAP market” as part of their marketing plans).

Despite much cynical eye-rolling from customers, it seems clear that these claims will always be part of the marketing landscape, since most of us do indeed want to be able to say we chose the “best” or “leading” software for our organizations.

For example, Oracle places ads such as the one on the right in magazines and airports around the world, claiming leadership in Enterprise Performance Management.

But SAP insists it is the #1 in the space, based on its leading share of the analytic applications market, which includes financial planning and strategy management (IDC does not use the term EPM).

According to IDC’s figure, Oracle is not #1 in business intelligence, and probably not in operational analytics (since SAP is leader in both applications and analytic applications). So what is the basis for the claim in the ad?

Oracle provides a link to a web page that attempts to back up the assertion, and which doesn’t mention market share at all. Instead, it links to reports from analyst companies like Forrester and Gartner that use more qualitative measures of “leadership” (interestingly, SAP could probably use the same list of reports to argue it was the overall leader).

Conclusion

Overall, market share is an important criteria that should not be ignored in purchase decisions. You can absolutely have great analytics projects with tools from smaller vendors. And successful analytics is much more about people and process than it is about technology, so in theory you can succeed with any tool.

But the whole point of analytics is that it must evolve over time, and adapt quickly to any changes in your business, and integrate with other systems inside and outside your organization, and I believe this gives the advantage to the larger vendors.

Among the larger vendors, does it matter which is #1 and #2? To SAP and Oracle, yes. For everybody else, it’s just one factor to consider, along with functionality, fit with your architecture, and – of course – cost.

According to Albert Pang of IDC, the current economic conditions are forcing organizations to not only better manage corporate performance but also increase business transparency: companies are under increasing pressure to conduct operations effectively, profitably, and ethically — and prove it. To achieve this, IDC advises companies to integrate EPM, GRC, and business analytics.

The IDC paper, Helping Enterprises Succeed: Responsible Corporate Strategy and Intelligent Business Insights covers the following:

This Executive Insights paper describes how the combination of enterprise performance management (EPM) and governance, risk, and compliance (GRC) solutions is now more critical than ever for business success.

This document also discusses how EPM and GRC must be linked to business intelligence tools and supported by comprehensive services to ensure that the data generated is used appropriately. Services such as strategy management enable companies to more readily develop, measure, and adjust corporate strategy according to new compliance requirements and regulations. Then, as new regulations come up, companies can easily adjust and monitor their strategy via dashboards with clear reporting. Also presented are suggestions for working with IT service providers to implement strategic analytics-based EPM and GRC solutions.

You can access the white paper here (registration required)

SAP And Enterprise Support

SAP has agreed a set of key performance indicators with its user group SUGEN, in order to measure the effectiveness of the controversial SAP Enterprise Support services introduced last year. And there’s real skin in the game: SAP has agreed to postpone scheduled price increases until the targeted improvements measured by the SUGEN KPI Index are met.

The KPI Index, defined after discussions with customers, is calculated on KPIs in four categories: business continuity, business process improvement, protection of investment, and total cost of operations.

“We are convinced that SAP Enterprise Support delivers unparalleled value to all customers and, as a demonstration of our commitment, we will provide tangible reductions in their operational costs on a defined schedule,” said Léo Apotheker, co-CEO, SAP AG

“SAP’s goal to provide a rating of application support via key performance indicators is innovative and challenging,” said Peter Wesche, research director, Gartner. “The extensive benchmarking phase and mapping of key performance indicators to business value will allow customers to fully understand the benefits of a comprehensive support program.”

Gross National Happiness

The New York Times reports today that the tiny nation of Bhutan has put together a sophisticated set of indicators to try to measure “gross national happiness”:

“…the Bhutanese produced an intricate model of well-being that features the four pillars, the nine domains and the 72 indicators of happiness.

Specifically, the government has determined that the four pillars of a happy society involve the economy, culture, the environment and good governance. It breaks these into nine domains: psychological well-being, ecology, health, education, culture, living standards, time use, community vitality and good governance, each with its own weighted and unweighted G.N.H. index.”

And it’s not as daft as it sounds – as the New York times reported several years ago, average happiness in many countries has hit a plateau even as median incomes have risen. Governments have always taken account of many different considerations when determining policy. To a certain extent, “gross national happiness” is just another way of looking at what voters want when they are looking to elect their democratic officials.

Measuring Government Ministers

Malaysia’s prime minister has announced that his government’s cabinet ministers and civil servants will be measured on KPIs, as part of his “1Malaysia” plan. Many other countries around the world, of course, have already implemented various types of performance-based budgeting, based on achieving a variety of social KPIs.

Stopping Yourself From Being Too Self-Righteous

The New York Times also has an article today about “self-righteousness”. Studies show that we’re hopeless at estimating our own willingness to do what’s morally right, but pretty good at estimating what other people will do. It’s not technically about KPIs, but if we regularly measured the delta between our expectations and what actually happens, we might get better at estimating our own real-life behavior!

Given this type of behavior, is it really any surprise that 95%* of a typical workforce does not understand their organization’s strategy?!

To be fair, there was apparently a confusion among the executives between sharing the strategic objectives (which is the whole point of strategy maps) and sharing specific metrics (which may indeed even be illegal, e.g. insider financial info).

Let’s hope they get it straightened out…

* Kaplan & Norton, The Balanced Scorecard