I was at the Sun Open Source BI Summit and it was interesting to see a presentation by Mark Madsen that Open Source is taking hold due to the commoditization of software in the market. Using BI as one example that has hit the mainstream and peaked, his observation is that Open Source is spawning more rapidly as the commercial on-premise software is generally the same across BI vendors. Let me take the contrarian position. Maybe a lot of core functionality is similar, but a lot of capabilities are still very different.

BI might have reached its peak from commercial license revenue growth for many of the larger BI vendors, but for others it is still growing. The newer suppliers are increasing the number of customers, their revenue or both. As long as the majority of business users still use spreadsheets and email to analyze and collaborate for making decisions, their will be potential for market growth The technology designed for personal productivity lacks the BI sophistication needed to meet a shared and collaborative environment, let alone operate from a common platform. In practice, though IT has purchased a lot of BI technology, much of it has not reached the business users as needed.

The commodity premise is interesting, but without the software being used by more than 50% of available users, it is not a commodity by usage or by number of licenses purchase. I believe, and our research supports, the complexities of BI is what is driving new markets like open source. These complexities include: pricing affordability,; configuration after installation; lack of IT skills for successful deployment,; difficult usability of the tools; and lack of context have all hampered BI from becoming a commodity and helped accelerate the open source dimension of BI.

The reality is that BI suppliers have their own challenges to make their products work in enterprise infrastructure, while trying to ensure they get deployments to meet the masses. This is no easy feat and should not hamper these vendors from advancing their efforts, but in reality it has complicated and stalled many deployments. Many of the BI products are still too complex to get working in an efficient manner for business let alone use by business analysts.

These complexities have driven open source as one channel to get access to software to try it and at the same time contribute to the advancement of software in a new community based approach. Leveraging a large number of developers in a community enables software vendors and corporations around the world to advance the software in a more open and collaborative fashion. This enables IT organizations, consultants and software providers to take what they need to advance BI for their purposes in a modular and flexible manner.

The focus to improve the experience and interactions with customers is becoming a key investment and priority. Organizations now realize that customer relationship management (CRM) has not met the expectations once set to manage customer relationships effectively. CRM does not help you manage customer relationships but automates internal functions in marketing and sales, customer and field service. Now, the goal to improve the performance or outcomes of customer relationships grows in importance and customer performance management will become just as important as other performance management efforts in finance, HR and operations.

Professionally, I now see many organizations are building customer management teams that can span across the line of business to assess interactions with customers and examine the current experience and satisfaction. Organizational structure and customer related processes are important but unfortunately are not enough to be successful. You will also need information and technology to manage customer performance and measure experience, interactions and satisfaction.

All of this activity points back to good management of customer information and the use of it into new technologies that can facilitate improvements to the customer experience. This is not a simple endeavor, as the integration of data into a clean and consistent set of customer information has to be established to efficiently deliver value to those who need the information including your customers. Evolving is a class of technology providers like Cincom, Ciboodle, ResponseTek and TeaLeaf entering a new segment to advance the art of customer experience management (CEM) with methods to automate and measure customer interactions to a successful outcome.

I hope that those of you who are focused on improving customer relationships take heed to new innovations in information management and applications that can help advance your efforts. Just investing into CRM and the 90’s approaches could inhibit your future. New approaches like customer experience management and customer performance management are now beginning to bring applications and capabilities that positively impact your efforts. If you are not, you could be spoiling your business faster than you are improving it.

Let me know your thoughts.

While the need for business intelligence (BI) is evident, most business organizations still don’t have the information or insights needed to garner improvement to their decision making efforts. The debate rages on: has IT been delivering BI effectively or does the responsibility lie within business? My recent blog ( Why Business Should Be Mad as Hell at IT ) injected the frustration by business on this topic, and generated some hearty discussion on who is responsible and why both IT and business don’t work more closely together.

Unfortunately, the pressure on reducing costs and resources in IT has impacted many organizations’ ability to dedicate further attention to BI. The reality is that each organization will have to determine how IT should prioritize budgets and resources for BI and how to respond to this growing need. Business knows the problems quite well, and limitations of existing BI efforts has proliferated further spreadsheet use. And as we all know, the copy and paste function of spreadsheets leads to inaccuracy and hampers quality decision-making.

We are seeing organizations that were previously handcuffed by IT non-prioritization and lack focus on BI now turning to software as a service as a new method to gain access to the software and their data. The combination of BI and software as a service (SaaS) introduces the concept of “BI as a Service” that can compliment or be an alternative way of accelerating BI in an organization.

Instead of purchasing the software and implementing, users can rent the software as a monthly cost per user or usage basis, and can scale up or down as needed. This approach provides allows business to find value quickly once the data is fed to the supplier in a routine manner. Then you can see your data and metrics when you want them and gain the capability to improve further intelligence in your business.

Once thought not possible, BI as a Service is now being used by hundreds of companies like yours. Some vendors that I have begun research coverage are BlinkLogic, myDIALS and PivotLink. Many more are new players in BI market but I waiting for company and customer validation to ensure they are ready for primetime.

Let me know your thoughts.