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| Home - Industry Article - Aug 03 Issue |
The Next Generation of Analytic Software
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Predictive Analytics have been around for a while. As one of the key vendors in this space, SAS has been delivering statistical analysis software for over 25 years. SPSS is another vendor in this space. SPSS uses data mining and statistical analysis to learn from the past, understand the present and predict the future. High-powered users typically use these products where statistical modeling is involved, as in the financial services segment or to analyze customer behavior and interaction management for marketing campaigns.
For a more detailed report on the architecture, landscape and companies mentioned here, please refer to http://www.garage.com/files/analytics.pdf.
The Next Generation
Increasing demand on businesses to increase operational efficiencies and reduce the latency in closed-loop business processes has had a catalytic effect on innovation in business intelligence. A new breed of analytic software has emerged, including Business Performance Management, (BPM), Business Activity Monitoring (BAM), and still others that fall under the category of Predictive Analytics.
BPM is the next generation of what was previously called Balanced Scorecard, the concept introduced by Robert Kaplan and David Norton. The Balanced Scorecard is used to track key metrics in four key functional areas: financial; customer relations; learning and growth; and business processes. In today’s environment, there is more of an emphasis on collaboration during the life cycle of key metrics. BPM applications are useful in collaborative closed-loop business processes. BPM can be implemented using a workflow like tool and applies in every functional area of the enterprise, starting with the business strategy which is used to set corporate/department goals and objectives. BPM allows managers to monitor, track and react in real-time to critical business events that impact the bottom line. This is an iterative process that facilitates continuous planning, accountability and performance improvement. Overall BPM provides an enhanced ability to streamline operations and optimize performance.
BAM is another category that is closely related to BPM. As the name implies, this type of application monitors transactional systems for specific key events on a real-time basis. When certain pre-determined conditions arise, alerts are triggered and the appropriate people within an organization are notified via any device so that they are able to take immediate action. BAM is useful in those areas within an organization that benefit from real-time information such as Supply Chain and Customer Relationship Management. Typical BAM applications use a mix of real-time information with historical information to analyze current behavior.
Predictions
In the coming years, we see a significant increase in analytic software deployments across all industries. In particular, we are seeing the development of:
Personalized portals for individual managers and “C" level executives with pertinent information for each role within an enterprise.
Horizontal out-of-the-box applications for functional areas such as corporate finance and for vertical applications, as in the retail or high-tech manufacturing industry.
Increased automation of decisions made by systems, eventually reducing the need for human participation across business processes. This will be facilitated by technologies that include data mining, rules engines and co-relation engines.
We expect consolidation among the vendors, especially among those providing tools/platforms, as customers look for complete solutions and prefer to deal with fewer vendors. The incumbent application vendors could also acquire some niche analytic applications, for example, in the supply chain for Retail or the Consumer Packaged Goods verticals. Microsoft could make forays in the BPM space via acquisition, perhaps of software provider Outlooksoft, which is built on the Microsoft technology stack and has a number of implementation in medium sized enterprises.
Database vendors will start to provide ETL (Extract Transform Load) functionality with the database software as an additional module. We are already seeing this with Oracle and Microsoft. This move could hurt vendors like Informatica and Ascential.
Finally, the new categories mentioned above will merge under the BI/analytic software umbrella. Customers continue to look for solutions to their problems, not to buy more licenses of yet another category of software. Analytic software is an integral part of a closed loop business process. We expect the lines of demarcation between the transactional and analytical systems will blur as the market continues to mature.
For More Information: The article is a synopsis of a Research Report prepared by Garage Technology Ventures on The Intelligent Enterprise.
http://www.garage.com/files/analytics.pdf
For the landscape map refer to http://www.garage.com/files/analytics-map.pdf
Anita Rao is a Vice President with Garage Technology Ventures, a venture capital investment bank for high tech companies and investors. To send Anita feedback, email anita@garage.com
 
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