Business Intelligence as a Service

“There is a service waiting to be born.”

Peter Drucker, The Daily Drucker

How does Web 2.0 fit into the growing world of Business Intelligence? This post attempts to answer this question by making two points:

1. Business Intelligence as a Service - For most companies Business Intelligence needs to be provided as a service, with the technical aspects outsourced to experts.
2. Web 2.0 - The best way to provide Business Intelligence as services is through secured internet pages using Web 2.0 technology.

The combination of these two factors makes Business Intelligence (or BI) a perfect opportunity for a small group of very skilled people that are able to provide what most businesses cannot provide on their own.

1. Business Intelligence as a Service

Business is an information intensive activity with a powerful competitive advantage going to those companies can best determine their customer’s needs and the means of satisfying those needs. Business Intelligence is the application of data analysis to finding the business factors that provide this competitive advantage. Business Intelligence offers insightful and timely information to a company’s strategic decision-makers. Patterns and correlations between customers, products, markets, and other information can be provided to executives that will help them allocate the company’s resources to where they can be most productive for both the company and the economy within which it functions.

BI, however, requires specialized knowledge that does not exist within most companies, even including those companies that can afford their own sizeable IT staffs. How to structure a data warehouse, create data mining models, or using statistical techniques to classify customers or predict sales are skills that are rare in the typical IT staff and require a large amount of specialized training to grow within the company. To date, most BI ventures have either failed completely or have proven to be disappointing in the amount of information produced and the expenses incurred.

In addition to the inherent difficulty in producing a BI staff, there is the problem of scale that limits the development of BI to only those companies that are large enough to allocate an enormous budget to produce an automated extension to their enterprise decision makers. While the international conglomerate can afford to throw millions of dollars at a BI effort, the vast majority of businesses will find an in-house BI effort prohibitive.

According to Adam Smith, the “wealth of nations” was primarily a resultt of a division of labor that allowed the baker to bake, the painter to paint, and the pin-maker to produce pins. The production of Business Intelligence, while requiring a commitment from the business man, requires an expertise that is affordable only to the man of leisure, the corporate executive with an infinite budget, or the business person who is resourceful enough to allocate the effort to an expert service. As smaller firms began to see the gains made by their bigger competitors, they will need to turn to a firm that can provide BI as a service.

2. Business Intelligence and Web 2.0

A service company needs to deliver a service, and in the case of Business Intelligence, the service to be delivered is information. The consumer needs to receive information in a manner that it will provide him insights to his business. In addition, the consumer needs to deliver raw data, representing the activities of the company, to the service-provider to be stored in such a manner that it can easily be turned into intelligence. If Business Intelligence is to be provided as a service, the service needs to be able to communicate data to and from the service consumer and it must be able to present the data in a manner that is user-friendly, efficient, and intuitive.

The communications requirement immediately suggests the internet. By way of the internet, data can be both uploaded to or downloaded from a service-provider’s database. There is no need for a dedicated network; the user only needs to access the database through an internet address and whatever security is needed to protect the data’s privacy. The URL is the application-download location, and the browser is the application platform. With the internet, the complete process of storing and reading data in an outsourced database is easily resolved. Users and developers have embraced the web because it offers centralized management and delivery, no local installation, instant updates to both functionality and content, and elements such as shareable bookmarks.

The problem with the internet is the classic render-call-render pattern that dominates most web applications. The traditional way of providing an interactive web site is to enter data in a page and wait for the page’s host to return a new updated page. This lacks the smooth interaction that a user has with an application that is running on his local machine. On his local machine he is able to enter data and have the program respond without rewriting the screen; the application is working in an interactive manner directly with the user and there is no delay time while a page and its bulky graphics are retransmitted across the internet. Conventional web applications solve the problem of data communications but leave the problem of a clumsy interface that interrupts the users thought and confronts him with interactive ambiguity.

This brings us to Web 2.0 and its ability to turn an internet browser into a virtual desktop. Web 2.0 teams the experience of interactivity with the underlying connectivity that comes from the internet. According to Tim O’Reilly, “Web 2.0 is the business revolution in the computer industry caused by the move to the internet as a platform, and an attempt to understand the rules for success on that new platform.”

At the center of the Web 2.0 phenomena are the interactive technologies AJAX, Adobe Flash, Flex, and Java. AJAX, for example, has prompted the development of websites that mimic desktop applications. Within a page based upon AJAX, there is embedded JavaScript code that can actually operate as a full-blown application, giving the user the same experience that he gets from word processing and spreadsheet applications that sit on his own machine.

With the combination of expert Business Intelligence designers combined with the technology of Web 2.0, there is a service out there waiting to be born.