Investor's Business Daily, August 29th, 2007
Howard Dresner has the credentials to be called a keen observer of the business intelligence software field. After all, it was Dresner who, while working as an industry analyst, was widely credited with coining the term "business intelligence" for software applications that gather and analyze business data.
The BI sector is evolving to encompass a broader field known as business performance management. BPM software aims to make business information more useful to workers in their daily tasks, while aligning worker goals with corporate objectives.
After 13 years as an analyst with tech research firm Gartner, Dresner became an industry executive himself in 2005 when he was named chief strategy officer of Hyperion Solutions, a BI software maker.
In April, Oracle ORCL bought Hyperion for $3.3 billion. Many industry watchers expect still more market consolidation. Potential suitors could include SAP SAP, IBM IBM, Microsoft MSFT and Oracle.
Some pure-play BI companies include Business Objects BOBJ, Cognos COGN, Microstrategy MSTR and SPSS SPSS. SAS Institute and Information Builders are large, privately held BI firms.
In July, Dresner founded Dresner Advisory Services, his own industry analysis and strategy consulting firm. He works out of his home office in New Hampshire. He's also wrapping up a book, "The Performance Management Revolution," which is due this fall from John Wiley & Sons.
Dresner marvels that virtually all large companies now own multiple BI software systems, yet relatively few employees at these companies get to use BI tools.
"We're still not nearly at a saturation level yet," he said. "We're just in the 20% range of total BI users among the potential audience, and in some companies BI is still not even used at all."
He recently spoke with IBD about business intelligence.
IBD: What prodded you to move from being an analyst to joining Hyperion?
Dresner: I had worked as a Gartner research fellow and lead BI analyst for all those years. I just decided there must be more out there. I think it is incumbent on any individual to find ways to challenge yourself.
Sometimes you even have to scare yourself, just as a reminder that you're still alive. I had been dispensing all this advice for 13 years, so I guess it was time to prove that my theories worked.
I was the CSO at Hyperion for almost two years. I thought the company had all the ingredients to be a runaway success, and it was my objective to give them a nudge.
Of course, the success at Hyperion was not just due to my effort. We had a great team and a great product and great customers. It was just a matter of honing the plan.
IBD: What's behind the market shift from BI to business performance management?
Dresner: BI is about building a data warehouse and giving users the tools to access information and find nuggets of insight in order to change their behaviors. BI grows into performance management.
At the same time, business performance management gives BI some greater context.
Fundamentally, BPM has planning at its core. It helps a management team set out its strategy for the next year.
Strategically and tactically, it allows you to measure against your plan to see how you're doing, as opposed to just giving you a (data) query tool and saying, "Go find something interesting."
When you see that the world is changing, you need to find a way to align the business with its stated mission.
I like to say that you can't have performance management without BI, but clearly a lot of organizations have BI without performance management.
IBD: What motivated your return to consulting?
Dresner: Originally I took a few months off (after Hyperion was sold). I knew I wanted to get back in the game somehow, but I also really liked the independence of doing what I wanted to do. So I put my shingle out there as Dresner Advisory Services LLC. I changed my profile on LinkedIn (an online business network), and the phone started ringing.
I thought I would work mostly with software suppliers on strategy. But it turns out the market wanted me to serve as more of an independent industry expert, not an analyst who writes white papers or reviews products.
What I talk about now are the trends in the market, and organizational culture.
My book is very much about that. Achieving performance management in an organization has very little to do with technology. At the end of the day, it's about the culture of the organization and having a mandate from the top. Technology is an enabler, but it is about much more than that.
IBD: Why does the corporate culture have such a big effect?
Dresner: To succeed in BI and BPM, a company has to standardize and consolidate all those systems. You need to have the high-level management team standardized on software across the whole company, or you won't get the full value of those systems.
It is striking how unimportant BI systems were to most high-level executives even just a couple years ago. We're seeing that change. Now a majority of organizations say it's important, but they still don't take ownership of BPM as a top priority. It just gets pushed down the priority stack from the CEO on down.
But if this process is pinned to the CEO's success, then it all changes. You can't drive these systems from the bottom up.
The enterprise only changes from the top down. You need a visionary CEO or CFO to make it happen.
IBD: Do you expect further market consolidation?
Dresner: Yes, consolidation is the natural order of all markets. There will always be value to pure-play BI firms, because the vendor is so focused on the technology. But there are not many guys left standing.
It's only a matter of time before the buyers speak. Maybe they'll just want one big vendor for all their software needs, or maybe they'll want BI domain experts. They may even want systems integrators to provide their BI. But historically, consolidation is the natural order of things.
