What Web Services Can Do for Business Intelligence

Many companies have achieved considerable success in using business-intelligence (BI) tools. Wal-Mart, General Electric and Cisco, for example, have all expended huge sums on BI solutions and give these systems a great deal of credit in helping them successfully manage their business. Siebel Systems, by virtue of tight controls on processes and doing things right from the start, has also created an internal BI system that's a model for what many companies are trying to do.

The traditional route to BI nirvana is through what we might call the "hierarchy of IT needs." In this hierarchy, a company starts out by getting its base systems infrastructure in order, moves away from direct-attached disks to an enterprise storage solution, normalizes the data that it stores, aggregates applications, collects information and, finally, produces BI that the enterprise can use. This slow process requires considerable commitment from executive management and steady investment in IT resources, which, if all goes well, will have increasing value to the business. Even the federal government is moving in this direction with its Federal Enterprise Architecture initiatives.

Now throw Web services into the mix. Web services will clearly have a disruptive impact on BI by enabling a large audience to do important integration tasks cheaply and efficiently without the overhead that only large companies could afford beforehand. Consequently, vendors of all stripes are scrambling to integrate Web services into their product lines. Every major vendor of CRM, ERP and BI systems has something to say about Web services. Some are further along with real products that offer some kind of Web services application programming interface (API). Others are offering white papers and trying to understand where the market will land.

Better access to data and the more standardized APIs promised by Web services will make the job of integrating BI systems easier, and vendors are anxious to create products that work in that world. But that's not the only benefit to be realized by a marriage of Web services and BI applications. Web services will also allow data to be more easily shared from BI systems to other enterprise applications. We're seeing this already in the proliferation of portal products that can display information from other applications via XML. Using Web services, these same applications could easily present the information and functionality of multiple ERP and BI systems in a personalized way. Now take this a step further: Imagine a CRM system, for example, that presents the sales rep with customized BI data, gathered from all over the enterprise, about the customer they're talking to in real time. Web services make this kind of two-way data-sharing practical.

However, not all disruptive technologies, including Web services, disrupt all that they touch. In the case of BI technology, better connectivity could lead to only modest gains in its application because of other issues. The question for the enterprise is whether or not there is any hope that Web services can shorten the long climb up the IT needs hierarchy to a fully functioning BI system. There are thousands of companies without the financial means of a GE or Wal-Mart that have messy legacy systems and fractured data stores that complicate integration with other systems. Unfortunately, while Web services ease the integration burden, they don't significantly reduce the overall IT investment that's needed to build a BI system that aids people in making business decisions everyday.

To see why, think about what BI is really about. BI isn't just giving the executive team easy access to information, but giving employees all of the information they need. A properly functioning BI system is more than a big data warehouse that executive management uses like a crystal ball. A real BI system forms a corporate nervous system that connects workers to the right information at the right time. It is difficult to imagine such a system functioning in an atmosphere of dysfunctional desktops, fractured data stores and splintered systems.

What's more, no shortcut will result in a mature technical infrastructure. It may lead to an enterprise with great intelligence about where it needs to go, but one that lacks the means to execute the decisions that are made. As an example of why shortcutting the climb up the IT needs hierarchy doesn't work, consider a company with two divisions serving the same set of customers with related products. Each division uses a homegrown system that stores customer contact information, tracks sales leads and handles their customer service. Management, with the help of its newly installed BI system, determines that sales can be significantly increased if every customer who buys product A from division X is given a chance to buy service B from division Y. Unless the company has paid the price of normalizing data and aggregating applications, the effort to make this happen will be too great to act on because the ROI on any given action isn't sufficient to justify the system rework necessary to execute it.

Web services will increase BI vendors' ability to gather data and ease the integration burden, but they won't increase the business's ability to execute the business decisions that BI systems can identify without the methodical effort that is necessary to build a mature technical infrastructure. BI systems -- and the improved decision-making that they promise -- have no value in an organization that can't execute.

Windley is former CIO of the state of Utah. Contact him at phil@windley.com.

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This story, "What Web Services Can Do for Business Intelligence" was originally published by InfoWorld.

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