By Alan Radding

Business intelligence is evolving. First, corporate statisticians spent countless hours analyzing numbers to better understand just how well the business was performing. Then, companies began correlating those numbers with actual processes so they could make better decisions about running their business. Now, it's about analyzing, managing and optimizing business processes — in real time and in conjunction with underlying IT processes — across the enterprise. As CIOs play a more critical role in working directly with customers — both internally and externally — effective and creative business intelligence (BI) has never been more important to help differentiate companies in the marketplace, improve operational efficiencies of both business and IT and, ultimately, enhance the customer's experience.

Organizations need to expand the scope of the processes they attempt to understand, manage and optimize to include both business and IT processes across the enterprise. By taking an enterprise process management perspective, companies more effectively leverage BI by analyzing data from both business and IT processes holistically. The results include enabling companies to better mitigate risks and reduce costs by continuously aligning IT operations and data with ever-changing business processes across their organizations. And in today's demanding business climate, fraught with global competition, regulatory pressures, financial stress and savvy customers, executives have little choice but to take notice.

Companies continue to invest in traditional BI tools, which can include decision support, query and reporting, online analytical processing (OLAP), statistical analysis, forecasting and data mining. Nearly half of the 500 IT professionals surveyed by InformationWeek Research in early 2007 said they plan to spend more on software for viewing and analyzing business information than they did in 2006. Another 40 percent said they'll spend at least as much as they did last year on business intelligence.

Surprisingly, though, some executives are still grappling with BI. Only 25 percent of the businesses surveyed provide BI tools to more than a quarter of their employees, the same level as last year, but that is slowly changing. Sixty percent of the survey respondents said they'll provide BI tools to more than a quarter of their employees within two years.

Originally BI provided information to help line-of-business managers understand what customers were doing and what they wanted. As BI evolved, however, managers extended it to business processes. If the business wasn't performing in some way, they turned to BI to identify problems with the underlying business process. "An enterprise process management perspective takes this even farther by allowing an organization to look at its IT processes as a component of its business processes and to understand how one affects and contributes to the other," says John Meyer, VP of strategy at CA. "With such a perspective, the CIO is afforded a more holistic view of the enterprise when addressing customer interactions and influencing the customer experience," adds Meyer.

Bring in the Stats
Despite BI initiatives intended to leverage the large information warehouses companies have built, executives are still struggling to understand what's happening in their companies, especially when it comes to processes that are not strictly financial. In a recent joint study by Deloitte & Touche USA LLP and the Economist Group's Economist Intelligence Unit, researchers found that more than 90 percent of surveyed executives complained that their companies were having difficulty tracking areas other than finance, such as the efficiency and effectiveness of key business processes. Almost half, or 48 percent, of the executives reported that their nonfinancial business intelligence was ineffective (see infobox).

Business intelligence software has improved, and vendors today are providing tools that are easier to use and capable of culling and analyzing data from a variety of sources, including enterprise resource planning (ERP), customer relationship management (CRM), human resource management (HRM) and supply chain management (SCM) systems. "Nobody is calling for building big statistical models. They're not looking to bring in the Ph.D. statisticians," says Sanjay Sehgal, BI practice principal with Archstone Consulting in Stamford, Conn. "What companies really want from BI is to put useful and effective information into their people's hands fast, so they can make smart, informed business decisions."

Moreover, companies now have access to software that's designed to integrate business intelligence into actual business processes, says David Stodder, VP and research director covering information management at Ventana Research, a research and advisory services firm in San Mateo, Calif. "Most large companies have established a data warehouse, but this has taken them only part of the way. Now, they're looking to improve how users can get to the information and apply it directly to the work they're doing, to the immediate business process."

Business process management has emerged as a major focus of business intelligence. "There is a critical role for BI in process management. For companies involved in continuous business improvement initiatives or Six Sigma programs, BI is an important part. They need to know what is happening and to make adjustments if some part of a process isn't working," says Scott Sognefest, U.S. practice leader for business intelligence and data warehousing at Deloitte Consulting LLP, part of Deloitte & Touche USA LLP.

BI applied to business process management alone tells only part of the story. For instance, BI may show that a business process is not performing well, but only by understanding the underlying IT process and its associated data can a CIO get the whole picture. "It's important to understand how IT processes contribute to the effective enablement of business processes," says Allen Houpt, director of product management at CA. "The idea of treating processes in both business and IT domains and their associated intelligence as a single analyzable asset is what will drive the convergence of BI and process management technologies going forward," notes Houpt.

Intelligence Ahoy!
Royal Caribbean Cruise Lines turned to BI after the entire cruise industry was nearly shipwrecked by the tourist falloff in the wake of the Sept. 11 terror attacks. While some of its competitors went out of business and others merged, Royal Caribbean battened down, trimmed back, restructured and became more efficient in part by applying BI to its project and portfolio management (PPM) process.

The company, which typically has about 1,000 new and ongoing IT projects under way at any one time, turned to data supporting its project management processes that it had long been collecting. To do so, Royal Caribbean uses CA Clarity™ solutions combined with a strong governance process to manage its priorities and projects. "We needed a robust process to help us govern opportunities and monitor projects to see how we were doing," says Richard Shapiro, manager of program administration at Royal Caribbean.

By analyzing what its BI data revealed, the cruise line was then able to alter its processes in ways that were more likely to achieve the desired outcomes. "Business intelligence," Shapiro adds, "lets us see where we were and where we are heading." The importance of an enterprise process management perspective is gathering momentum as process-focused and IT-focused BI increasingly come together. "It makes sense. It's a way to better align IT with business processes," says Stodder of Ventana Research.

That is the case at Royal Caribbean. "Our process helped us better align with the business," Shapiro says, "and tools like CA Clarity help when we can wrap the governance process around the data." But he warns that "aligning with the business can't be a one-time thing; it has to be a continuous process." Only when process management is ongoing from an enterprise perspective can it lead to steady business and IT process improvement.

Alan Radding is a freelance writer who specializes in business and technology.