Trends and Outliers

TIBCO Spotfire- Business Intelligence System vs. Analytics

Our blog rarely focuses on ourselves – Spotfire – but as we end 2009 and start 2010, we thought it would be appropriate to check in with Spotfire.  We spoke with Spotfire’s Vice President of Marketing, Mark Lorion.

Q:  If you had to pick one new trend Spotfire is seeing among its customers and prospects, what would it be?

ML:  We’re unquestionably noticing an increase in interest for analytics.  Not only are our customers beginning to step up investments in this area, but they also appear to be appreciating that analytics is not the same as business intelligence – you don’t get analytics when you buy BI.  The problem has been that the traditional BI players have been using the term analytics with their offerings and confusing many in the market.

Q:  Why do you think people are unsatisfied with using business intelligence?

ML:  We’re seeing end users, both customers and prospects, becoming frustrated with traditional business intelligence.   Business intelligence has really become synonymous with reporting.  Businesses that invested in business intelligence in the last five to ten years did so mainly to extract information from core operating systems such as ERP, payroll and general ledger.  Those inflexible systems were unable to generate usable information, so customers added business intelligence to get that reporting function.

These reports – whether weekly, monthly or quarterly – are essentially static.  They report on key performance indicators that were determined weeks or months back.  They are not particularly useful systems for asking new questions on the fly.  That’s why so many BI users end up dumping their reports into a spreadsheet – so they can do some “analysis.”  That’s where analytics comes in.  Businesses want to dive into the information in and behind those reports and use analytics to ask new questions as they arise.

Q:  What is driving this transition from business intelligence to analytics?

ML:  Everything.  The world, the economy and business is much more complicated today.  Some industries have been completely restructured in the last year or so.  Did anyone see that coming?  All businesses are operating in a new reality: uncertainty is the new norm.  Companies want better tools to identify new opportunities and make better decisions.  Data volumes continue to increase, users want more control, and decreasing time to decision isn’t a nice to have, it’s a must have.

Q: How do businesses want to use analytics?

ML: In many businesses today, people are the number one resource, and the number one capital expense.  In 2008 and throughout 2009 companies cut excess expenses and really pared down as much as possible.  Now, in an effort to create further efficiencies, companies are turning to their people.  How do they better enable their people – employees at many different levels – to make faster, better business decisions.  New insights and better decisions don’t need to come from just a few offices in the organization.  With advances in analytics products, it’s easier than ever to enable everyone throughout the enterprise to make better decisions with the data they use everyday.

Q: Isn’t this what business intelligence delivers?

ML: Not at all.  The key difference between business intelligence and analytics is one of timing.  Most traditional business intelligence systems are optimized to deliver information in formal reports, using pre-calculated key performance indicators (KPIs) and pre-calculated numbers.  The systems may not be as static as batch reporting systems, but in the end, the reports generated by business intelligence systems are still just pumping out stale information.

Q: Do companies really need to make drastic business decisions in a short time frame?  Why can’t they wait a few weeks for a new or modified BI report?

ML: Are you kidding?  In today’s economy and this new reality, weeks or months can be lifetime.  And it can be plenty of time for a swiftly moving competitor to do real damage on your business – or cause you to miss a narrow window of opportunity to redeploy your sales team, or change your advertising program, or identify and fix a problem on your manufacturing line.  Those decisions need to be made quickly and when the specific question was not precisely considered, it means calling up the IT dept to configure a new BI report.  Some businesses will never need to make a quick change in strategy.  Some businesses will be fine with standard business intelligence reporting.  The problem though, is with this new reality of uncertainty, businesses can not foresee how an event next week could have a drastic impact on them.  They need analytics in place to react to the unforeseen.

Take the Tiger Woods brouhaha.  Here’s the world’s highest paid athlete, one with a stellar reputation, representing and commercially endorsing some of the highest valued brands in the world.  If you are Nike, Gillette, Accenture or any other company using Tiger Woods in its advertising, you probably didn’t foresee having to consider making a change.  Those companies had marketing executives who most likely enjoyed a great Thanksgiving, only to learn on Friday that they may need to rethink their strategy.

As more details emerged, those businesses needed immediate access to data on revenue generated by using Tiger in advertising, and how quickly those KPIs were falling.  The amount of money involved in these endorsement deals call for making decisions on real data, hard numbers; not just “guessing” if the company should stick with Tiger or end their campaigns.  One can suppose the different reactions of those companies come down to how the numbers looked for each specific company.

Now let’s put this scenario in a business intelligence context: Accenture long advertised “Go on. Be a Tiger.”  Analytics can help companies to avoid being a Tiger.

Kelley Kassa
Spotfire Blogging Team

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