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BI seen as tool for maximizing ERP

New research reinforces a prevailing thought on business intelligence: It's a hot market, and companies think BI can help them get more out of ERP.

Companies are looking to apply a new level of business intelligence (BI) to get the most out of their existing...

ERP systems, Ventana Research reported in a study released today.

Business intelligence software from vendors like SAS Institute Inc., Information Builders, Cognos Inc. and Business Objects SA is intended to help companies analyze and access data to make better decisions.

Ventana, a Belmont, Calif.-based research and advisory firm, found companies are actively courting BI tools in an effort to improve overall business management.

"Although research pointed towards [using BI for] improving efficiency, there is still a big focus on managing costs internally," said Ventana CEO Mark Smith. "The challenge out there has been a pent-up demand for more information out of current ERP applications."

Sponsored by several leading vendors in the business intelligence industry, the report is the result of more than 1,200 interviews with executives from companies in several vertical markets that are running ERP, BI and business process management technology.

The data shows that businesses should continue investing in business intelligence software to improve performance management, Smith said.

"Data created from ERP is now beginning to be used for managing operational performance, and that's where the focus is," he said.

Ventana reports that 93% of respondents found it important to apply BI on ERP. About 63% rated measuring and monitoring business processes very important.

"There are key findings in regards to priorities around supply chains," Smith said. "People want to be getting more information out to business users, and there's a drive towards information on a much more frequent basis."

Thirty percent of respondents to the Ventana survey are actually looking to improve efficiency of managing business processes through BI, and 29% are looking to manage or reduce costs in business processes.

Ventana also made several recommendations for users based on the current uncertainty over market consolidation. The firm suggests that businesses explore pure-play BI vendors with a focus on performance management and prebuilt integration, as opposed to relying on offerings in this area from Oracle Corp., PeopleSoft Inc. and J.D. Edwards & Co., the three companies involved in an acquisitions dogfight.

Organizations are also buying BI in increased volumes to address their needs, according to the report. International Data Corp., in Framingham, Mass., estimates the BI market at $11.3 billion in 2003, compared with $10.6 billion in 2002.

A report released in December by Cambridge Mass.-based Forrester Research had strikingly similar results. Forrester reported that spending on BI tools outpaces most software categories.

In the Forrester study, more than 280 IT executives at North American companies with at least $1 billion in sales said business intelligence will be their second-largest investment, after Web portals. Forrester concluded that, to maximize BI's potential, companies must aim higher and implement BI in the context of managing business performance.

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