The State of Business Intelligence

In October, we surveyed Business Finance readers and Web site visitors to uncover the current status of — and future plans for — business intelligence technologies in their companies. The results, reported below, show which areas of a business are more heavily favored for business intelligence applications — but they also tell us a little something about varying points of view between business decision makers and technical decision makers.

How? First, let us explain a little something about our methodology. Our Business Intelligence survey was disseminated in two different ways: A paper version was sent to a sampling of Business Finance subscribers whose companies reported annual revenues higher than $10 million, and an online version was posted on the Business Finance Web site. It's not surprising that respondents to the mailed version overwhelmingly identified themselves as Controllers, VPs of Finance, CFOs, and other BDM-type job titles, as those are the preponderant subscribers to the magazine. Out of 183 mail-version responses, 53% specifically called themselves Controller or VP Finance, and altogether 92% cited upper-level business/finance jobs. We'll therefore refer to the mailed-version respondents as business decision-makers, or BDMs, even though a small percentage of these participants are in other areas of the business.

On the flip side, let's look at the online responses. The speed and ease of answering the survey on the Web attracted 1,684 respondents, many of whom came to the site via a Business Finance sister publication, Windows NT magazine. Accordingly, the job titles of these respondents were in broad variance from the mail respondents: Fully 65% recorded themselves as IS Manager/Staff, and only 10% cited finance titles. We'll refer to these respondents as technical decision-makers, or TDMs.

In addition to the differences in job titles, respondents to the two survey versions cited quite a difference in company types. Our BDMs come from a broad variety of businesses, with manufacturing representing the largest percentage (44%), whereas TDMs — true to their technical nature — came mostly from computer and software services companies.

Although the sizes of the two audiences were quite different, we'll present the results from both groups in terms of simple percentages, so that you can easily make comparisons between the two groups.

One more note about the differences between BDM respondents and TDM respondents before we get into the survey results: You'll see we've tallied the number of people who had no response to each question as well as those who did enter a specific response. And altogether, you might notice a trend: On questions that related to the finance side of the business, there are higher numbers of non-responses from TDMs, whereas on questions related to the technical side, we see more non-responses from BDMs. Whether it's ignorance or disinterest — or some other factor, such as unwillingness to commit to a specific response — that kept them from answering, we'll never know, but if you'd like to speculate on the meaning behind any of these survey results, we'd love to hear from you: Please e-mail us at [email protected] and let us know what you think.

Now — on to the results.

Question: What is the status of your organization's use of these business intelligence applications or technologies?

For each of the following applications/technologies, respondents were given the opportunity to answer "In use now," "Plan to use over the next year," or "Have no plans to use." Here's how the answers shaped up for each one.

Financial Reporting: Of BDM respondents, 87% say they use business intelligence technologies for their financial reporting function, compared to just 53% of TDM respondents. Only 3% of BDMs and 8% of BDMs reported no plans to use BI for financial reporting.

Financial Consolidation: The mailed survey revealed that 48% of BDMs report they use BI technology for financial consolidation, while 19% plan to within the next year. TDMs, however, came in with slightly smaller percentages: Only 32% say they use BI for financial consolidation now, and 12% say they plan to within the year. Twenty-four percent of BDMs and 21% of TDMs in our survey say they have no plans to use business intelligence for financial consolidation.

Financial Modeling: Forty-three percent of BDMs say they currently use BI for financial modeling, and 20% have plans to do so, while TDMs reported only 30% and 15%, respectively. Like financial consolidation, financial modeling uses for BI technologies have not quite captured everyone's heart: Twenty-eight percent of BDMs and 20% of TDMs have no intention of using BI in this domain.

Budgeting/Planning: BI appears to be a popular approach to budgeting, as 86% of mailed responses indicated current or planned use of this application along with 60% of online responses. Only small percentages from each camp say they have no plans to use BI for budgeting and planning, although non-responses from the TDM side are noticeable.

Online Analytical Processing (OLAP): According to our survey, Online Analytical Processing is just beginning to gain a foothold. While only 15% of BDMs and 19% of TDMs say they use OLAP now, 27% of BDMs and 20% of TDMs plan to within the next year. While the trend is positive, 44% of BDMs and 25% of TDMs still have no OLAP plans.

Key Performance Indicators: BDMs seem to find more use for business intelligence in understanding and reporting key performance indicators than TDMs. According to our survey, 45% of BDMs use BI in this area now, and 22% will be by this time next year. Online, 25% of our primarily TDM respondents say they use it now, and 19% plan to. A quarter of mail-in responses and 20% of online responses say they have no plans to use BI for key performance indicators.

Data Mining: Data mining got a lukewarm response from our survey participants, both mail-in and online. Only 18 and 19% of those groups, respectively, use data mining, and 22% in each group say they plan to within a year. On the negative side, nearly half of the BDMs from the mail-in survey — 48% — say they have no plans for data mining in their organizations. Online, 23% of respondents say their companies have no data mining plans.

Microsoft OLAP Services: Microsoft OLAP Services are being used by only 8% of our BDM respondents and 15% of TDM respondents, but 16% of responding BDMs plan to apply these services in the next year, as do 21% of TDMs. And while 60% of BDMs have no plans to use Microsoft OLAP Services, only 28% of TDMs said the same thing.

Extensible Markup Language: We see more variation among answers in the world of Extensible Markup Language (XML). Business-oriented types are apparently unimpressed by the possibilities of XML, as only 3% of that group say they use it and 11% plan to within the year. TDMs, on the other hand, weighed in at 16% current usage and 26% planned usage.

Extract, Transform, Load: ETL has yet to claim the affections of decision makers from either the business side or the technology side. Part of this might be lack of awareness — the no-response answers comprised 21% of the mail-in respondents and 42% of those online. On the other hand, 64% of business-types have no plans to use the technology, and 36% of the TDM group feels the same way. ETL isn't nonexistent, though: Ten percent of BDMs and 8% of TDMs use it now, and while only 5% of BDMs plan to implement it next year, 14% of TDMs do.

Balanced Scorecard: We see similarly tepid usage here — roughly 10% of both respondent groups call themselves current users, and "Plan to" responses show at 19% for BDMs and 13% for TDMs. Again, a relatively high number of respondents have no plans to implement the technology (BDMs: 52%, TDMs: 36%).

Push Reporting: This technology isn't widely used, but it appears to be slowly gaining in popularity. Only 3% of the business decision makers say their companies use push reporting now, and only 8% of TDMs say it's in use at their companies. However, 12% of BDMs say they'll implement push reporting within a year, and 17% of TDMs say the same thing.

Web Portals: Our mailed survey showed that 15% of BDMs say they use BI for Web portals now, and 23% say they plan to. Online, 19% of respondents use them and 22% plan to. Web portals are somewhat better received overall by the technical group — while 43% of BDMs have no plans to use BI for Web portal applications in their businesses, only 20% of TDMs say the same.

Question: If you currently use or plan to use a data warehouse or datamart, what do you or will you use it for?

Here we found fairly similar answers across the range of responses we offered. More than half of respondents are using or will use data warehousing for sales, customer and product analysis, with a slightly more positive response from the online side.

Finance/expense/revenue analysis is also quite a popular data warehousing application, with 60% of BDM respondents using it or planning to and 71% of TDMs reporting the same.

Data warehousing for risk and/or profit analysis, while showing some strength, is not quite as hot, especially among our mailed responses: Only 11% of BDM respondents use it, although 27% plan to. Twenty-two percent of TDM respondents currently use data warehousing for risk and/or profit analysis, and 39% plan to.

Although it may be surprising that more techies than bean counters answered this question in the affirmative, remember that the real differences may lie in the types of companies represented by these respondent groups.

Question: How are the majority of your financial reports currently delivered to you? How would you prefer they be delivered?

Electronic trends and paperless offices aside, our survey revealed that 84% of BDM respondents are still getting their financial reports delivered to them on paper, while 10% are receiving them via e-mail and 6% are looking them up on an intranet. Only 18% want these reports on paper, however. Fifty-six percent of this group's members wants to receive such reports via e-mail, and 26% would like financial reports available on a company intranet.

Our online respondents are currently more electronically savvy: Although 48% still receive financial reports manually, 32% get them over e-mail and 20% are calling them up on an intranet. As for their preferences, only 9% of online respondents want to continue seeing these reports on "dead trees." These respondents showed a preference for intranet reporting, as only 35% say they want e-mailed reports but 56% want to see them on the company intranet. We wonder whether the tech-savvy members of the tech-savvy companies are simply more willing to go looking for information on a Web-based medium, whereas the buckled-down BDM types may be wedded to the idea of having reports sent to them personally.

We Welcome Your Responses

If you have comments on our survey results — or if you were a survey participant and you'd like to share some insights into your answers — we welcome your responses. Please e-mail us at [email protected] and let us know whether we can quote you directly.

In a Nutshell

Here’s a fast look at how our two respondent bases – business decision-makers (BDMs) and technical decision-makers (TDMs) – responded to our "What are you doing with BI?" questions.