industry commentary

My thoughts on Oracle / Sun quoted by Computerworld UK and computing.co.uk

Peter James Thomas business, business intelligence, oracle, oracle and sun, sun, technology , , , ,

Computerworld UK

I was recently contacted by the UK arm of Computerworld asking whether they could quote from my thoughts on Oracle’s proposed acquisition of Sun Microsystems. I was delighted to accept and the resulting article has now been publsihed: Oracle’s Sun merger raises questions over MySQL, antitrust (my comments are on page 2).

computing.co.uk

Also, earlier my initial reaction to the news was also featured in Computing.co.uk coverage. I have had a long relationship with Computing and VNUNet in general. Other Computing articles referencing my work and opinions may be viewed on the Press Case Studies and Interviews page of the Public Presence section of this site.

This Public Presence section also features Vendor Case Studies, Videos (including one with Computing and Accountancy Age) and details of Seminars at which I have presented.
 

 
Computerworld, the world’s most successful media brand for IT managers, was originally launched in the US in 1969. Since then it has earned a world-class reputation by maintaining a sharp focus on IT management. Today there are 57 editions of Computerworld around the globe serving a combined audience of over 14 million IT professionals.Computerworld and Computerworld.com and the respective logos are trademarks of International Data Group Inc.
 

 
Computing and Computing.co.uk are published in the UK by Incisive Media and provide insight for IT leaders. Computing editor Bryan Glick tweets at http://twitter.com/bryanglick.
 

Combinatorics

Peter James Thomas business, business intelligence, data warehousing, ibm, microsoft, oracle, oracle and sun, sun, technology , , , , , , , , ,

The smallest bridgeless cubic graph with no three-edge colouring

Some of the furore following on from the announcement of the proposed acquisition of Sun Microsystems by Oracle appears to have died down today. However, taking a look round the blogosphere and various on-line discussion forums1, there does not seem to be much of a consensus about Oracle’s motivations, or future plans for Sun. There are a number of moving parts to this:

  1. Sun’s hardware platforms
  2. Solaris
  3. Java
  4. MySQL
  5. OpenOffice.org

One area that people seem agreed upon is the importance of Java to Oracle’s application strategy, so it makes sense – as a defensive move if nothing else – for them to seek to prevent influence over its future direction falling into the hands of a competitor (which in turn raises the question of when exactly Oracle and Sun started talking and how much overlap there was with the IBM negotiations).

The future of MySQL seems less clear. Some commentators feel that Oracle will support it and allow it to continue to thrive as one of their products. At the other extreme, I have seen suggestions that it will be killed off. Of course as an open source database, this might be easier said than done. There seems to have been a steady trickle of MySQL people out of Sun, pre-acquisition and I would have thought that there is enough expertise and ownership outside of Oracle/Sun for MySQL to have some sort of future regardless of Oracle’s strategy for it.

A bit of a dark horse is OpenOffice.org. A lot of commentary has focused on Oracle positioning themselves to compete with IBM via the acquisition. Perhaps OpenOffice.org offers Larry Ellison another chance to cross swords with his old adversaries at Microsoft.

Moving from software to operating systems, Sun’s Solaris has probably suffered more than most from the rise of Linux, but there have been rumours about Solaris offering Oracle a better route to the current technology Nirvana of cloud computing. Whether this is really the case, I’ll leave to more technically competent authorities to discuss.

But beneath Solaris beats the SPARC chips and other components of Sun’s hardware. Is Oracle’s real aim to offer a complete solution: ERP, CRM, BI and DW in a box? Sun’s hardware has not exactly been flying off the shelf in recent months, but perhaps the sales team at Oracle have other ideas. Maybe their feeling is that all that Sun’s boxes need is to be part of a more alluring overall package. Leveraging Sun’s hardware and operating system is what many people assume is behind Oracle’s strategy. This is certainly the path that would lead to challenging IBM as a company that can meet many of an organisation’s needs as a one-stop-shop.

However, this segues into another observation. If Oracle really has IBM in its sights, then it lacks one crucial piece of ammunition, a global services organisation; the sort of outfit that IBM acquired from the hiving off of PwC’s consulting arm. Maybe now is a good time to but stock in CSC?

But to return to some of the points I made earlier, there is a further possibility. Perhaps Oracle don’t want to move into the fiercely competitive and low-margin arena of hardware sales after all. Perhaps it was Sun’s software assets that were the real goal. Does Oracle really want to position itself as a hardware vendor, no doubt poisoning strong relationships with people such as HP in the process? Maybe not. If this is indeed the case then maybe there will be a spin-off of Sun’s hardware assets, or indeed a sale to someone like HP – assuming that they wanted them.

One of the most intriguing aspects of Oracle’s proposed acquisition of Sun is just how many balls have been thrown up into the air by it. It will be really interesting to see how they fall over the next few months.
 

 
1. Some of the blogs that I have read on this subject are acknowledged at the end of my earlier article.

A further main source has been comments on various LinkedIn.com groups, notably: CIO Forum (CIO.com and CIO Magazine), CIOs.com: Chief Information Officer Network and The IT Architect Network. As always, membership of LinkedIn.com and the group is required to view these.

Finally, you can sometimes glean a lot from 140 characters, so various comments on Twitter have also been influential.

 

Mergers and value

Peter James Thomas business, business intelligence, data warehousing, ibm, oracle, oracle and sun, sun, technology ,

and they all lived happily ever after?

Today’s big news is of course that Oracle and Sun Microsystems “have entered into a definitive agreement under which Oracle will acquire Sun common stock for $9.50 per share in cash.”

As Sun’s press release goes on to say, “the transaction is valued at approximately $7.4 billion”. At the time of writing, Sun’s stock was up nearly 36% and Oracle‘s was down just over 1%. The price Oracle is paying represents a 42% premium over Sun’s closing stock price on Friday – that’s a big premium.

What is interesting is that the previous mooted IBM / Sun deal appears to have foundered at least partly on issues of price (though potential antitrust issues were also a concern). IBM was rumoured to have offered a price identical to what Oracle will now be paying. So what, taking Larry Ellison’s deep pockets to one side, was the difference?

Well while there seemed to be some synergies for IBM in the earlier deal (a big say in the future of Java obviously being one that would have attracted both suitors), the acquisition of Sun is unarguably a much more transformational event for Oracle. Despite Sun’s recent problems in shifting big iron (funny how UNIX platforms are now viewed that way isn’t it?), Oracle post-acquisition will have a product set ,matched by few companies. In fact it will probably be matched by only one: IBM. So, while buying Sun might have made business sense for IBM, it would not have changed the nature of the organisation overnight. Oracle’s announcement today would appear to have done just that, positioning them as the other big beast in the “buy everything from us” jungle. Whether this deal proves successful for all concerned (and not just Sun’s shareholders) is a question whose answer will probably not be clear for a long time.

A comparisson of Oracle and Sun's positions with key competitors in the Forbes Global 2000
A comparisson of Oracle and Sun's positions with key competitors in the Forbes Global 2000

Stepping back from all this IT fervour for a moment, it is perhaps instructive to compare the merger madness that seems to have taken over the sector with trends outside the technology industry. Here the picture is very different. Over the last 10 years the majority of sprawling conglomerates have been split up; previously cherished businesses have been spun off, or sold to competitors. This has all been in homage to the business school orthodoxy of focus and core competencies. Many an internationally renowned name now sells just a fifth of its previous product set, with other assets now owned by those who can presumably generate greater profit from them and who feel that they are more compatible with their own core strategy. Deals where two similar companies have swapped assets and businesses to create two more distinctive entities have been common. While it is always notoriously difficult to assess the impact of such trends, general opinion seems to be that this phenomenon has generated greater value (or at least destroyed less value) than the previous focus on mergers and acquisitions.

So where does this leave IT with its rash of mega mergers over the last couple of years? Well it could of course be argued that IT itself is a single sector (and thus an area of focus and core competency) and that mergers within the technology sector are not the same as say a consumer electronics firm taking over a Hollywood studio (Sony / Colombia TriStar) or old media taking over new (TimeWarner / AOL). But many elements of Sun and Oracle’s businesses are quite different from each other. Ellison must believe that he can run a more diverse stable and still breed winners. The track record of Oracle successfully managing acquisitions is mostly impressive, so he may have a point. Perhaps bucking the trend towards being highly focussed is a masterstroke. The merger may prove to be a Waterloo for the world’s third biggest software and services firm; but whether they are playing the role of Wellingtion or Napoleon remains to be seen.
 


 
Continue reading about this area in: Combinatorics.
 
Much of the following was originally conatained in a comment, but I then thought that it was more appropriate to add this to the main article.

Some thoughts on this area from bloggers that I follow:

I will add more as I come across them.

Also here is an interesting graphic from MySQL.com, which (if you believe it) shows the impact of the Sun acquistion on Oracle’s market share:

UPDATE: The above chart reflects: “According to the recent JoinVision study ‘Open Source in the Fast Lane’, IT specialists indicated they deploy MySQL 30% more frequently than Oracle, SQL Server or DB2.” Not quite the same thing as market share.
 

The Dictatorship of the Analysts

Peter James Thomas business, business analytics, business intelligence, change management, management information, sas, SAS BI / BA controversy, technology , , , , , , ,

Lest it be thought that I am wholly obsessed by the Business Intelligence vs Business Analytics issue (and to be honest I have a whole lot of other ideas for articles that I would rather be working on), I should point out that this piece is not focussed on SAS. In my last correspondence with that organisation (which was in public and may be viewed here) I agreed with Gaurav Verma’s suggestion that SAS customers be left to make up their own minds about the issue.

CIO Magazine

However the ripples continue to spread from the rock that Jim Davis threw into the Business Intelligence pond. The latest mini-tsunami is in an article on CIO.com by Scott Staples, President and Co-CEO of IT Services at MindTree. [Incidentally, I’d love to tell you more about MindTree’s expertise in the area of Business Intelligence, but unfortunately I can’t get their web-site’s menu to work in either Chrome or IE8; I hope that you have better luck.]

Scott’s full article is entitled Analytics: Unlocking Value in Business Intelligence (BI) Initiatives. In this, amongst other claims, Scott states the following:

To turn data into information, companies need a three-step process:

  1. Data Warehouse (DW)—companies need a place for data to reside and rules on how the data should be structured.
  2. Business Intelligence—companies need a way to slice and dice the data and generate reports.
  3. Analytics—companies need to extract the data, analyze trends, uncover opportunities, find new customer segments, and so forth.

Most companies fail to add the third step to their DW and BI initiatives and hence fall short on converting data into information.

He goes on to say:

[…] instead of companies just talking about their DW and BI strategies, they must now accept analytics as a core component of business intelligence. This change in mindset will solve the dilemma of data ≠ information:

Current Mindset: DW + BI = Data

Future Mindset: DW + (BI + Analytics) = Information

Now in many ways I agree with a lot of what Scott says, it is indeed mostly common sense. My quibble comes with his definitions of BI and Analytics above. To summarise, he essentially says “BI is about slicing and dicing data and generating reports” and “Analytics is about extracting data, analysing trends, uncovering opportunities and finding new customer segments”. To me Scott has really just described two aspects of exactly the same thing, namely Business Intelligence. What is slicing and dicing for if not to achieve the aims ascribed above to Analytics?

Let me again – and for the sake of this argument only – accept the assertion that Analytics is wholly separate from BI (rather than a subset). As I have stated before this is not entirely in accordance with my own views, but I am not religious about this issue of definition and can happily live with other people’s take on it. I suppose that one way of thinking about this separation is to call the bits of BI that are not Analytics by the older name of OLAP (possibly ignoring what the ‘A’ stands for, but I digress). However, even proponents of the essential separateness of BI and Analytics tend to adopt different definitions to Scott.

To me what differentiates Analytics from other parts of BI is statistics. Applying advanced (or indeed relatively simple) statistical methods to structured, reliable data (such as one would hope to find in data warehouses more often than not) would clearly be the province of Analytics. Thus seeking to find attributes of customers (e.g. how reliably they pay their bills, or what areas they live in) or events in their relationships with an organisation (e.g. whether a customer service problem arose and how it was dealt with) that are correlated with retention/repeat business would be Analytics.

Maybe discerning deeply hidden trends in data would also fall into this camp, but what about the rather simpler “analysing trends” that Scott ascribes to Analytics? Well isn’t that just another type of slice and dice that he firmly puts in the BI camp?

Trend analysis in a multidimensional environment is simply using time as one of the dimensions that you are slicing and dicing your measures by. If you want to extrapolate from data, albeit in a visual (and possibly non-rigorous manner) to estimate future figures, then often a simple graph will suffice (something that virtually all BI tools will provide). If you want to remove the impact of outlying values in order to establish a simple correlation, then most BI tools will let you filter, or apply bands (for example excluding large events that would otherwise skew results and mask underlying trends).

Of course it is maybe a little more difficult to do something like eliminating seasonality from figures in these tools, but then this is pretty straightforward to do in Excel if it is an occasional need (and most BI tools support one-click downloading to Excel). If such adjustments are a more regular requirement, then seasonally adjusted measures can be created in the Data Mart with little difficulty. Then pretty standard BI facilities can be used to do some basic analysis.

Of course paid-up statisticians may be crying foul at such loose analysis, of course correlation does not imply causation, but here we are talking about generally rather simple measures such as sales, not the life expectancy of a population, or the GDP of a country. We are also talking about trends that most business people will already have a good feeling for, not phenomena requiring the application of stochastic time series to model them.

So, unlike Scott, I would place “back-of-an-envelop” and graphical-based analysis of figures very firmly in the BI camp. To me proper Analytics is more about applying rigorous statistical methods to data in order to either generate hypotheses, or validate them. It tends to be the province of specialists, whereas BI (under the definition that I am currently using where it is synonymous with OLAP) is carried out profitably by a wider range of business managers.

So is an absence of Analytics – now using my statistically-based definition – a major problem in “converting data into information” as Scott claims? I would answer with a very firm “no”. If we take information as being that which is generated and consumed by a wide range of managers in an organisation, then if this is wrong then the problem is much earlier on and most likely centred on how the data warehousing and BI parts have been implemented (or indeed in a failure to manage the concomitant behavioural change). I covered what I believe are often the reasons that BI projects fail to live up to their promise in my response to a Gartner report. This earlier article may be viewed here.

In fact I think that what happens is that when broader BI projects fail in an organisation, people fall back on two things: a) their own data (Excel and Access) and b) the information developed by the same statistical experts who are the logical users of Analytic tools. The latter is characterised by a reliance on Finance, or Marketing reports produced by highly numerate people with Accounting qualifications or MBAs, but which are often unconnected to business manager’s day-to-day experiences. The phrase “democratisation of information” has been used in relation to BI. Where BI fails, or does not exist, then the situation I have just described is maybe instead the dictatorship of the analysts.

I have chosen the word “dictatorship” with all of its negative connotations advisedly. I do not think that the situations that I have described above is a great position for a company to be in. The solution is not more Analytics, which simply entrenches the position of the experts to the detriment of the wider business community, but getting the more mass-market disciplines of the BI (again as defined above) and data warehousing pieces right and then focussing on managing the related organisational change. In the world of business information, as in the broader context, more democracy is indeed the antidote to dictatorship.

I have penned some of my ideas about how to give your BI projects the greatest chance of success in many places on this blog. But for those interested, I suggest maybe starting with: Scaling-up Performance Management, “All that glisters is not gold” – some thoughts on dashboards, The confluence of BI and change management and indeed the other blog articles (both here and elsewhere) that these three pieces link to.

Also for those with less time available, and although the article is obviously focussed on a specific issue, the first few sections of Is outsourcing business intelligence a good idea? pull together many of these themes and may be a useful place to start.

If your organisation is serious about adding value via the better use of information, my recommendation is to think hard about these areas rather than leaping into Analytics just because it is the latest IT plat du jour.
 

The Apologists

Peter James Thomas business, business analytics, business intelligence, sas, SAS BI / BA controversy, technology , , , , ,

A whole mini industry has recently been created in SAS based on justifying Jim Davis’ comments to the effect that: Business Intelligence is dead, long live Business Analytics. An example is a blog post by Alison Bolen, sascom Editor-in-Chief, entitled: More notes on naming. While such dedication to creating jobs in the current economic climate is to be lauded, I’m still not sure what SAS is trying to achieve.

The most recent article is by Gaurav Verma, Global Marketing Manager for Business Analytics at SAS. He calls his piece: Business Analytics vs. Business Intelligence – it’s more than just semantics or marketing hyperbole. In this Gaurav asks the question:

Given that I have been evangelizing BI for more than 12 years as practitioner, analyst, consultant and marketer, I should be leading the calls of blasphemy. Instead, I’m out front leading global marketing for the SAS Business Analytics framework. Why?

One answer that immediately comes to mind is contained in the question, it is of course: “because Gaurav is the head of global marketing for Business Analytics at SAS”.

Later in his argument, by sleight of hand, Gaurav associates business intelligence with:

Traditional and rapidly commoditizing query and reporting

Of course everything that is not “query and reporting” must be called something else, presumably business analytics is an apt phrase in Gaurav’s mind. To me, despite Gaurav’s headline, this is just yet more wordsmithery. No other commentators seem to see BI as primarily “query and reporting” and if you remove this plank from Gaurav’s aregument, the rest of it falls to pieces.

The choice of words is interesting. Recent pieces by SASers have applied adjectives such as “traditional”, “classic” and even “little” to the noun-phrase “business intelligence” in order to explain exactly what Jim Davis actually meant by his remarks. Whether any of these linguistic qualifications of the area of BI are required, separate from the task of supporting Mr Davis’ arguments, remains something of a mystery to me.

I for one would heartily like to move beyond these silly tit-for-tat discussions. My recommendations for the course that SAS should take appear here – albeit in lightly coded form.

Short of retracting Mr Davis’ ill-thought-out comments, the second best idea for SAS might be to be very quiet about the area for a while and hope that people slowly forget about it. For some reason, it is SAS themselves who seem to want to keep this sorry episode alive. They do this by continuing to publish artciles such as Gaurav’s. While this trend continues, I’ll continue to publish my rebuttals, boring as it may become for everyone else.
 

A business intelligence parable

Peter James Thomas business, business analytics, business intelligence, sas, SAS BI / BA controversy, technology

Once upon a time there were two technology companies, both operating in the Corporate On-Line Analysis market. One was called Credible Organisational KPI Enterprise (IT people love acronyms so much that they sometimes even nest them) and the other was known as Predictive Enlightenment Powered by Statistical Inference. However, both companies were generally better known by their respective acronyms; as was the market in which they competed.

Credible Organisational KPI Enterprise and Predictive Enlightenment Powered by Statistical Inference had parts of their respective product sets that overlapped with each other, but also had some more distinctive offerings. In the places where their portfolios diverged, each was seen as a market leader. In the shared areas, things were less clear-cut; some users preferring Credible Organisational KPI Enterprise and others Predictive Enlightenment Powered by Statistical Inference. Often those who expressed a preference did so in very strong terms, but not always with much evidence to back this up.

Well none of this mattered too much to most regular people until one day the head of marketing of Predictive Enlightenment Powered by Statistical Inference made a speech in which he claimed – contrary to all previous industry thinking – that the usefulness of general Corporate On-Line Analysis had been overstated and that only Predictive Enlightenment Powered by Statistical Inference could really offer users any benefits.

The deep insight underpinning the claims of Predictive Enlightenment Powered by Statistical Inference’s Chief Marketing Officer was that while Credible Organisational KPI Enterprise’s products relied on mostly water and sugar to make their customers happy, the revolutionary tools provided by his company had a secret, special ingredient, code-named only hydrated-C12H22O11.

These claims caused rather a furore in the Corporate On-Line Analysis world, with many commentators strongly disputing them. Several of the colleagues of the Predictive Enlightenment Powered by Statistical Inference CMO rushed to his defence. Some indeed went on to claim that Corporate On-Line Analysis was merely a subset of Predictive Enlightenment Powered by Statistical Inference, this despite most people having previously thought of both Credible Organisational KPI Enterprise and Predictive Enlightenment Powered by Statistical Inference as being different types of Corporate On-Line Analysis vendors.

While this move by Predictive Enlightenment Powered by Statistical Inference was probably intended to highlight the strengths of their product set and to better differentiate themselves from Credible Organisational KPI Enterprise, instead it just confused most people working in the area of Corporate On-Line Analysis and made them wonder whether the people at Predictive Enlightenment Powered by Statistical Inference understood their own products and market.

In the end, the people at Predictive Enlightenment Powered by Statistical Inference came to their senses, realising that what had initially seemed like a great marketing idea was actually counterproductive and even making them look slightly ridiculous. They issued a statement saying that their CMO’s comments had been taken out of context but nevertheless unequivocally retracting them.

After this outbreak of sensible behaviour, things in the Corporate On-Line Analysis world started to settle down again and everyone lived happily ever after.

BI versus SAS?
 

 
Before the legal teams of any beverage companies start issuing writs, I should point out that any similarity between the above fable and their products is wholly coincidental. Any similarity to the recent behaviour of other commercial organisations may be somewhat less of a coincidence.
 

A review of “The History of Business Intelligence” by Nic Smith

Peter James Thomas business, business intelligence, management information, microsoft, technology , , ,

Introduction

I had been aware of a short film about the history of Business Intelligence flitting its way around the Twitterverse, but had not made the time to take a look myself. That changed when the author, Nic Smith from Microsoft BI Solutions Marketing, contacted me asking my opinion about it.
 
 


 
 
Back in the day I was a regular Internet Movie Database reviewer, coming out of “retirement” recently to post some thoughts about Indiana Jones and the Kingdom of the Crystal Skull (see also A more appropriate metaphor for business intelligence projects). More recently, I have reviewed rock climbing DVDs, filmed rock-climbing shorts with my partner and have even written a piece aiming to apply Hollywood techniques to Marketing Change. Given this background, I thought that I would treat Nic’s work as art and review it accordingly. This article is the result.
 
 
The review

Nic’s film is epic in scope, his aim is to cover the entire sweep of not just business intelligence, but data and business systems as well. It is amazing that he manages to fit this War and Peace-like task into only 10 minutes 36 seconds. However lest the reader expects Bergman-esque earnestness, it is worth pointing out that the mood is enlivened by the type of pop-culture references that are likely to appeal to a 40-something geek like your reviewer.

I’ll try to avoid giving too much of the plot away, however Nic’s initial aim is to answer the following four questions about BI:

  1. Where have we been?
  2. Where are we now?
  3. Where are we going? and
  4. Why should you care?

 
 

  It is recommended that anyone wishing to avoid spoilers clicks here now!  

 
 
Having failed to get a satisfactory definition of BI from Wikipedia (I trod the same path looking for a definition of IT-Business Alignment in the presentation appearing here), the director embarks on a personal quest to find the answer himself. Along the way, he comes to the realisation that BI is about decisions and that people take these decisions. In trying to explore this area further, Nic takes a journey from the advent of databases in the late 1960s; through the creation of the business systems to populate them, and the silo-based reports they generated, in the 1970s; to the arrival of the data warehouse in the 1980s – a stage he tags BI 1.0.

As the profile and importance of BI increased during the 1990s and the amount of data, both structured and unstructured, increased exponentially – notably with the growth of the web – the number and type of BI tools also proliferated. Because of the variety of tools, their complexity and cost, the market then consolidated, with many of the BI tools finding new homes in the same organisations that had previously brought you business systems. The resulting menu of broad-based and functional BI platforms is Nic’s definition of BI 2.0.

Nevertheless, the director felt that there was still something not quite right in the world of BI; namely the single version of the truth was about as likely to be pinned down as a Snark. The problem in his mind was that people were still left out of the equation (Nic likes equations and includes lots of them in his film). This realisation in turn leads to the denouement in which Nic brings together all of the threads of his previous detective work to state that “BI is about providing the right data at the right time to the right people so that they can take the right decisions” (a definition I wholeheartedly endorse).

The film ends with a cliffhanger, presaging a new approach to BI that will enable collaboration and drive innovation. I suspect the resolution to this punctuated narrative will soon be playing at all good Microsoft multiplexes along with the other summer blockbusters.
 

 
Nic Smith joined the Microsoft team in December of 2006, bringing a deep knowledge base of the Business Intelligence space. Prior to joining Microsoft, Nic spent time with Business Objects, a pure play BI company, where he was responsible for the vision of BI and performance management. Nic also spent time with former BI company Crystal Decisions, where he helped bring an enterprise reporting BI platform to market. Nic brings a unique blend of market knowledge, brand development and a solution orientated focus as an evangelist for BI. In addition to his business initiatives, Nic is involved in elite athletic development for youth. He holds a Bachelors Degree in Marketing and Communications from Simon Fraser University in Vancouver, British Columbia.
 

Neil Raden’s thoughts on Business Analytics vs Business Intelligence

Peter James Thomas business, business analytics, business intelligence, management information, sas, SAS BI / BA controversy, technology , , , , ,

neil-raden

Industry luminary Neil Raden, founder of Hired Brains, has weighed into the ongoing debate about Business Analytics vs Business Intelligence on his Intelligent Enterprise blog. The discussions were spawned by comments made by Jim Davis, Chief Marketing Officer of SAS, at a the recent SAS Global Forum. Neil was in the audience when Jim spoke and both his initial reaction and considered thoughts are worth reading.

Neil’s blog article is titled From ‘BI’ to ‘Business Analytics,’ It’s All Fluff.
 

 
Neil Raden is an “industry influencer” – followed by technology providers, consultants and even industry analysts. His skill at devising information assets and decision services from mountains of data is the result of thirty years of intensive work. He is the founder of Hired Brains, a provider of consulting and implementation services in business intelligence and analytics to many Global 2000 companies. He began his career as a casualty actuary with AIG in New York before moving into predictive modeling services, software engineering and consulting, with experience in delivering environments for decision making in fields as diverse as health care to nuclear waste management to cosmetics marketing and many others in between. He is the co-author of the book Smart (Enough) Systems and is widely published in magazines and online media. He can be reached at nraden@hiredbrains.com.

I also have featured an earlier piece that Neil wrote for BeyeNETWORK in “Can You Really Manage What You Measure?” by Neil Raden. You can find Neil’s thoughts on a wide range of technology issues in many places on the web and they are always recommended reading. 

Other Intelligent Enterprise articles referenced on this blog may be viewed here.
 

Irony and WordPress.com advertising

Peter James Thomas business, business analytics, business intelligence, sas, SAS BI / BA controversy, technology , , , ,

After the response that I posted yesterday to comments by Jim Davis, SVP and Chief Marketing Officer at SAS Institute, I suspect that the following advert is eveidence of the new irony module in WordPress.com‘s advertisng engine!

Ironic advertising
Ironic advertising

 

Business Analytics vs Business Intelligence

Peter James Thomas business, business analytics, business intelligence, management information, sas, SAS BI / BA controversy, technology , , , ,
  “Business intelligence is an over-used term that has had its day, and business analytics is now the differentiator that will allow customers to better forecast the future especially in this current economic climate.”
 
Jim Davis SVP and Chief Marketing Officer, SAS Institute Inc.		  

The above quote is courtesy of an article reported on Network World, the full piece may be viewed here.

Analytics vs Intelligence

In the same article, Mr Davis went on to add:

I don’t believe [BI is] where the future is, the future is in business analytics. Classic business intelligence questions, support reactive decision-making that doesn’t work in this economy because it can only provide historical information that can’t drive organizations forward. Business intelligence doesn’t make a difference to the top or bottom line, and is merely a productivity tool like e-mail.

The first thing to state is that the comments of this SVP put me more in mind of AVP, should we be anticipating a fight to the death between two remorseless and implacably adversarial foes? Maybe a little analysis of these comments about analytics is required. Let’s start with SAS Institute Inc. who describe themseleves thus on their web-site [with my emphasis]:

SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market.

It is also worth noting that the HTML title of sas.com is [again with my emphasis]:

SAS | Business Intelligence Software and Predictive Analytics

Is SAS’s CMO presaging a withdrawal from the BI market, or simply trashing part of the company’s business, it is hard to tell. But what are the differences between Business Intelligence and Business Analytics and are the two alternative approaches, or merely different facets of essentially the same thing?

To start with, let’s see what the font of all knowledge has to say about the subject:

Business Intelligence (BI) refers to skills, technologies, applications and practices used to help a business acquire a better understanding of its commercial context. Business intelligence may also refer to the collected information itself.

BI applications provide historical, current, and predictive views of business operations. Common functions of business intelligence applications are reporting, OLAP, analytics, data mining, business performance management, benchmarks, text mining, and predictive analytics.

http://en.wikipedia.org/wiki/Business_intelligence

and also:

Business Analytics is how organizations gather and interpret data in order to make better business decisions and to optimize business processes. […]

Analytics are defined as the extensive use of data, statistical and quantitative analysis, explanatory and predictive modeling, and fact-based decision-making. […] In businesses, analytics (alongside data access and reporting) represents a subset of business intelligence (BI).

http://en.wikipedia.org/wiki/Business_analytics

Rather amazingly for WikiPedia, I seem to have found two articles that are consistent with each other. Both state that business analytics is a subset of the wider area of business intelligence. Of course we are not in the scientific realm here (and WikiPedia is not a peer-reviewed journal) and the taxonomy of technologies and business tools is not set by some supranational body.

I tend to agree with the statement that business analytics is part of business intelligence, but it’s not an opinion that I hold religiously. If the reader feels that they are separate disciplines, I’m unlikely to argue vociferously with them. However if someone makes a wholly inane statement such as BI “can only provide historical information that can’t drive organizations forward”, then I may be a little more forthcoming.

Let’s employ the tried and test approach of reductio ad absurdum by initially accepting the statement:

  Business intelligence is valueless as it is only ever backward-looking because it relies upon historical information  

Where does a logical line of reasoning take us? Well what type of information does business analytics rely upon to work its magic? Presumably the answer is historical information, because unless you believe in fortune-telling, there really is no other kind of information. In the first assertion, we have that the reason for BI being valueless is its reliance on historical information. Therefore any other technology or approach that also relies upon historical information (the only kind of information as we have agreed) must be similarly compromised. We therefore arrive at a new conclusion:

  Business analytics is valueless as it is only ever backward-looking because it relies upon historical information  

Now presumably this is not the point that Mr Davis was trying to make. It is safe to say that he would probably disagree with this conclusion. Therefore his original statement must be false: Q.E.D.

Maybe the marketing terms business intelligence and business analytics (together with Enterprise Performance Management, Executive Information Systems and Decision Support Systems) should be consigned to the scrap heap and replaced by the simpler Management Information.

All areas of the somewhat splintered discipline that I work in use the past to influence the future, be that via predictive modelling or looking at whether last week’s sales figures are up or down. Pigeon-holing one element or another as backward-looking and another as forward-looking doesn’t even make much marketing sense, let alone being a tenable intellectual position to take. I think it is not unreasonable to expect more cogent commentary from the people at SAS than Mr Davis’ recent statements.
 

 
Continue reading about this area in: A business intelligence parable and The Apologists.