Business Intelligence Advances Don't Override Caution

Published: February 16, 2006

by Dan Burger

As the level of insight that is provided by business intelligence (BI) tools continues to climb, so does the level of interest in BI. So much so that Gartner is predicting the BI market to grow at a steady clip during the next five years. The analyst firm says new license revenues will be on an upswing, reaching to an annual growth rate of 7.3 percent. To some degree these increases relate to an increasing number of people within organizations making use of BI and also the far-reaching effects of organizational spending related to government regulations such as Sarbanes-Oxley.

Gartner is predicting that the overall market for BI software and related services will grow by about 6 percent to hit $2.5 billion this year, and expects that BI sales could crest above $3 billion by 2009 or so.

With integrated BI systems coming to market last year from well-known companies such as Business Objects, Hyperion, Information Builders, and Cognos--as well as less-complex BI software solutions from firms such as QlikTech--organizations are finding it possible to quickly report on a variety of business activities and get that information to employees who can make use of it. Integration is the key here. It hasn't been easy to draw data from the many platform silos. Nor has it been a piece of cake to create an interface that is acceptable for the various users of the accumulated information.

According to Gartner's latest report on BI, the technology has extended its user base from being solely the province of senior executives and analysts to including many other employees. It is also drawing on data from a broader array of applications and data sources, rather than concentrating only on databases.

In a separate survey of CIOs, Gartner has reported that BI ranks as the number one tech priority for 2006. Based on this CIO feedback, Gartner says BI budgets will increase by an average of 4.8 percent this year. Because of recent investments in enterprise applications, including ERP, CRM, and HR, companies now have more data than ever. BI projects are being designed to leverage this data and these investments.

In spite of the optimistic forecasting for upward BI spending, caution remains the predominant advice. BI is not supply chain optimization in a can and it should not be considered a guaranteed key to sales quota heaven.