Cindy Jutras: BI market consolidation indicative of distance to be traversed

Enterprise performance, business performance, and business intelligence (BI) are alternative terms used to describe a category of software that is increasingly important to manufacturers and supply chain companies. In addition, many enterprise (ERP) vendors have BI or performance suites in their application portfolios.

That the lines between software categories are blurring actually is a good thing because it means managers and CFOs looking for integrated data for decision-making have a place to turn. But it is confusing for those trying to decide where to turn.

Mergers and acquisitions within the business intelligence space have reduced the number of companies to choose from, but rather than clarify the situation, it has tended to muddy the waters: Software vendors that previously were very different now target the same decision-makers—and even hope to infiltrate each others' installed bases.

BI vendor Cognos got the ball rolling as early as four years ago when it began acquiring its way into the corporate performance management space. In a more recent wave, Business Objects' acquisition of Cartesis added a more application-oriented flavor to the Business Objects tool set.

Oracle, both a middleware and enterprise application vendor, first rebranded and then expanded its Siebel CRM analytic applications to expand its own ERP footprint. Now it is expanding further with the acquisition of Hyperion, which adds BI tools and related financial applications to its portfolio.

Oracle also makes no secret of its intent to offer the product suite in non-Oracle (i.e., SAP) operating environments. It plans to aggressively support SAP as a source system and expand analytics for SAP ERP.

One must assume SAP sees the same potential for infiltrating Oracle accounts, given SAP's intent to purchase OutlookSoft. This deal will add integrated planning, budgeting, forecasting, and consolidation to the mix, on top of SAP's prior acquisitions of analytics capabilities for strategy management (Pilot Software); and compliance software (Virsa Systems).

But are these moves satisfying the needs of their intended audience?

A recent Aberdeen benchmark study explored the business drivers and strategic responses of more than 270 companies in regard to business performance management. It indicates that market volatility and accelerating change drive top performers to take a balanced-scorecard approach to financial and operational metrics.

Yet study participants in financial job roles still spend much more time in spreadsheets than in their ERP applications. Top financial leaders focus on financial planning and reporting, not operational performance management. Given the almost universal desire to operate from a single version of the truth, this bodes well for the future of business performance, but is indicative of the distance to be traversed.

Today only 25 percent of best-in-class companies can retrieve more than 90 percent of the data needed for effective decisions from a single virtual source. In fact, as ERP vendors make it easier to integrate with Microsoft Office applications, there is little wonder that spreadsheets remain the universal management tool. All this begs the question whether business leaders will avail themselves of tools that are becoming plentiful.