Who’s Afraid of Complexity:

1. Bill Clough Vice President, Software Research IDC EMEA Who’s Afraid of Complexity: Intelligent Business Intelligence

2. The Problem with IT Today • I can’t reconcile my IT costs with the business value I’m delivering • I have systems with spare capacity and systems that need more resources, but I can’t shift the work from one to another • All the information I need is here somewhere, but it’s hidden, fragmented & inconsistent • What the business sees as a minor change always turns into a significant development project • Complex requirements take so long to implement that IT gets further out of step with the business • I can’t justify the resources for running occasional compute-intensive modelling & analysis work • I spend so much effort tackling IT issues I lose focus on the business • I’m meeting all my IT SLAs, but users still complain of poor performance

3. The Problem with IT Today • I can’t reconcile my IT costs with the business value I’m delivering • I have systems with spare capacity and systems that need more resources, but I can’t shift the work from one to another • All the information I need is here somewhere, but it’s hidden, fragmented & inconsistent • What the business sees as a minor change always turns into a significant development project • Complex requirements take so long to implement that IT gets further out of step with the business • I can’t justify the resources for running occasional compute-intensive modelling & analysis work • I spend so much effort tackling IT issues I lose focus on the business • I’m meeting all my IT SLAs, but users still complain of poor performance The more IT resources I accumulate, the less I can do with them

4. This is another fine mess you’ve gotten me into

5. Responsiveness to Market Business Strategy Automation & Execution End-to-End, Dynamic Management IT Operations Automation & Management Operational Efficiency Two Conflicting Personalities of IT Agility Vs. Stability Source: IDC, 2005

6. The Importance of Software 60% 50% 40% 30% 20% 10% 0% 6  1 % of n Q: How important is software technology to your company's business success? Please answer on a scale of 1 to 6 where 1 is “not at all important” and 6 is “very important”. n = 625 Source: IDC – European Software Group, March 2005

7. The Value of Software 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 6  1 % of n Q: Are you getting the expected value from your software solutions? Please answer on a scale of 1 to 6 where 1 is "no value" and 6 is "more value than expected“. n = 625 Source: IDC – European Software Group, March 2005

8. It’s All BI to Someone Business Intelligence (BI) Business Analytics Analytic Applications Business Performance Management (BPM) Corporate Performance Management (CPM) Enterprise Performance Management (EPM) Business Activity Monitoring (BAM) Production reporting Query & Reporting Enterprise Reporting Data Warehousing (DW) Ad-hoc analysis Portals Advanced analytics Data Mining Data quality Dashboards Statistics ETL Scorecards Data visualization

9. The Purpose Behind BI • Speed and Accuracy • Who are our best suppliers or most profitable customers? • Which new prospects should we target, • Where are our expenses growing faster than sales, • Which products are experiencing quality problems, • Insight and Relevancy • Should we extend credit to a particular customer? • What will be the impact of a price change? • How does recent customer activity trend predict future behavior or customer attrition rates? • How does a certain pattern in product quality data predict future servicing costs?

10. 2005 Investment Plans in BI / Analytics Benelux Nordics Italy European Avg France Germany Spain UK 0% 20% 40% 60% 80% 100% % of n Q: Does your company plan to invest in any of the following technologies in the next year? Please answer: Active Investments, Considering Investing, or No Plans to Invest. n = 625 (UK n = 137) Source: IDC – European Software Group, March 2005

11. 2005 Investment Plans in BI / Analytics SCM CRM BPM/BSC WFM Risk Mgmt BPRC 0% 10% 20% 30% 40% 50% 60% % of n Q: How important are the each of these areas for your business intelligence/analytics projects? Please answer on a scale of 1 to 6 where 1 is “not at all important” and 6 is “very important”. n =289 – those companies answering Yes to investing in BI Tools and ranking this question 5 or 6. Source: IDC – European Software Group, March 2005

12. How the is Market Changing • Competition, partnerships, M&As: DBMS, ERP, BI, Analytic Applications • Long term transition from tools to applications • Analytic Apps development platforms with common services: metadata mgmt, security, authentication, data quality • Integration: web services standards being adopted in all new software (building blocks) • BAM with everything – increasing the breadth of real-time information will lead to adoption of dynamic process modification

13. Scalability Scalability How the Architecture is Changing Exec. LOB Mgr. Data Analyst Bus. Analyst Empl. Govt. Public Supplier Partner Consumer Search Browse Query Portal Application Application Application Email Doc Mgmt Intra/Extranet Text Mining Browse Search GIS Data Mining OLAP Reporting Vertical focus Advanced analytics Data viz and GIS Composite applications DB DW Data federation and virtualization Web Services Content processing Data processing BAM Growing data volumes Connectors Connectors Unstructured Structured Email Office files Web sites Image A/V External ERP SCM CRM Custom Apps External Convergence of document and structured data

14. The Value Proposition with BI • Competitive advantage comes from the speed and accuracy with which the closed loop can be traversed. • Competitive advantage comes from assessing the relevance of information to a decision and from gaining insight in seeking and evaluating possible decision alternatives. • Since many types of decisions are recurring or repeatable (such as pricing, extending credit, or allocating resources), decision-making processes exist that are amenable to automation. • One benefit to decision process automation is that it enables greater consistency in the way decisions are made. This is important not only for competitive reasons, but also increasingly for compliance reasons.

15. “Must Know” Best Practices • Senior executive engaged as sponsor and champion (CFO, CIO, COO) with real-world governance. • Projects with a specific application focus generated the best results. • A staged plan is executed; successful initial project needed to justify future steps; willingness to adjust. • Business users worked with IT in assessing and prioritizing requirements. • The challenges in transitioning people to new roles and responsibilities were recognized.