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Gartner: Business Intelligence Looking For Smarts

If the number of business intelligence (BI) installations drops over the next few years, it will likely be due to the lethal tandem of too few personnel to get them up and running and a high total-cost-of-ownership.

Research firm Gartner said a lack of user expertise and the high costs associated with it could stifle the growth of BI, which reaped $2 billion in new license sales in 2004.

BI helps corporations gain precise insights into how their businesses are functioning. Often consisting of a comprehensive business assessment through one dashboard view, BI allows users to create detailed reports about crucial trends in their businesses.

These reports satisfy users' needs for timely, accurate business data. Business Objects, Cognos and MicroStrategy are three of the top BI vendors in the competitive space.

Howard Dresner, Gartner vice president and fellow whose team surveyed 917 IT and business users worldwide and presented its findings at the Gartner Business Intelligence Summit in Chicago, said large businesses will need three times the BI workers in 2008 as they did in 2004.

This is because of the glut of licenses customers often acquire when dealing with vendors. Dresner said it's not uncommon for a customer to buy 1,000 licenses even when they only need 500 because vendors give them such a good deal. Companies end up with more software than they can humanly deploy.

"It comes down to how much can organizations absorb, and 'shelfware' gets left behind," Dresner said in a phone interview from the show. "This is a risk for the vendor."

The other downside to not having enough staffers with BI deployment knowledge, Dresner said, is that "if you don't have enough skills, you can buy whatever tool and you're going to do it wrong, sometimes over and over gain." Such labors of trial and error cause the TCO to skyrocket.

Dresner said the high TCO factor is more of a dilemma in the Asia-Pacific region, with nearly half of the respondents in Japan saying that the BI learning curve is steep enough to hamper its adoption. The analyst said Asia-Pacific regions are farther behind North America, Western Europe and Australia.

Meanwhile, he said 39 percent of respondents in North America said they expect to increase BI spending in 2005, while another 34 percent of respondents said they plan to spend the same amount as they did in 2004. Overall, high-tech and telecom companies expect BI budgets to increase, although retailers expect them to decrease, Dresner said.

Of the different types of BI software, corporate performance management (CPM) applications are the most popular. This type of application helps executives better understand and run their businesses.

CPM should garner more attention from enterprises concerned about increased government regulation and compliance regulations, such as Sarbanes-Oxley, and SEC 17a-4, he said.

He also said front-office BI applications for sales analytics are making a comeback compared to the last two years, when demand for back-office software for supply chains was greater.

"I'm no economist, but this seems consistent with what you see in a recovering economy," he said, noting that spending on customer-facing applications was down the previous two years.