Data-Driven Decision-Making >> Who's on Your BI Shortlist?

• By Joseph C. Panettieri
• 12/29/05

The vendors are coming! Business intelligence (BI) software will improve your operational and financial performance, but the market is set for a shakeout. Choose your partners wisely.

Tom Mauriello knows how to build profitable relationships. As vice president of Development at New York Institute of Technology (NYIT), Mauriello and his team have driven annual giving to the college 80 percent higher since the 2003-2004 academic year. Moreover, NYIT’s contributor base has increased 21 percent since that time.

What’s the secret to NYIT’s success? The three-part answer includes effective data-driven decision-making, progressive collaborative tools, and a heavy emphasis on personal relationships. “The best technology in the world will certainly help your cause,” says Mauriello. “But you also need extensive relationships with people who care about the development of your institution and its students.”

Even so, it takes a solid technology infrastructure to mine and maintain those relationships. In recent years, NYIT has shed Digital VAX legacy systems and increased its reliance on enterprise and BI software from Datatel Inc., Microsoft Corp., and Oracle Corp. to drive operations forward.

The Bandwagon to Consolidation

NYIT isn’t alone. Across the country, universities are leveraging BI software to improve data-driven decision-making, which can enhance operational and financial performance. The lengthy list of BI software providers includes Business Objects SA, Cognos Inc., Hyperion Solutions Corp., Microsoft, Oracle, SAS Institute Inc., and numerous second-tier players. Even open source companies such as Greenplum are leaping into the BI sector (see “Seeing Green?” p. 45).

Demand for such software remains strong: Global BI sales are growing 10 percent annually and now top about $4.5 billion per year, according to International Data Corp., a Framingham, MA-based research firm.

Still, industry pundits say the BI sector, much like the enterprise software market, is ripe for a shakeout. “When it comes to business intelligence software, you’re talking about a very fragmented market with lots of profitable players,” says Ed Golod, president of Revenue Accelerators Inc., an executive consulting firm in New York. “That’s a recipe for consolidation.”

Oracle agrees. Since 2003, the $12.35 billion database giant’s board of directors has maintained a shortlist of potential buyout targets, according to Oracle’s SEC filings. The list includes such database and BI specialists as Sybase Inc. and Business Objects.

Although Oracle declined to discuss its acquisition list, BI vendors themselves are snatching up tiny companies to round out their software portfolios. For instance, in October, Business Objects purchased privately held Infommersion Inc., a leading provider of information visualization and presentation software. Similarly, Hyperion earlier this year purchased Razza Solutions Inc.of Austin, TX. Razza’s software allows customers to share data across financial and analytical applications.

Educated Guesses

For CIO’s and senior university administrators, BI industry consolidation arrives at a critical time. Choose the wrong BI platform for a specific university environment, and you could wind up with a dead-end solution.

When mulling a BI solution, ensure that the vendor is solidly profitable and well established in the higher education market (see “Healthy Competition,” p. 42). Second, the platform should include integrated reporting tools; query and analysis features, online analytical processing capabilities, visualization tools, and Microsoft Office integration (see “Five Critical Components,” above). Third, the BI offering should integrate with existing platforms, such as Datatel’s enterprise management software for universities.

Eager to meet such needs, in October, SAS announced a far-reaching partnership with Datatel. The deal will provide Datatel customers with statistical, analytical, and predictive capabilities from SAS software. “By joining forces, SAS and Datatel will be able to provide higher education institutions with state-of-the-art planning and decision-making software to keep them competitive, strong, and student-focused,” says Mark Milliron, VP, SAS Education Practice.

Milliron’s optimism is easily explained: Once connected to SAS’s software, universities will be able to leverage data held within the Datatel Colleague enterprise resource planning solution to view campuswide business operations, and also manage them for the future.

Healthy Competition A LOOK AT THE MAJOR BI PROVIDERS AND THEIR RECENT MOVES.
Company	Business Objects SA
Solution	Business Objects XI
Sample Customers	Brown University (RI), Columbia University (NY), University of Michigan, University of Notre Dame (IN), University of Pennsylvania, Stanford University (CA), Vanderbilt University (TN)
Worth Noting	Revenue hit $261.4 million for 3Q 2005, up 19% from 3Q 2004.
Company	Cognos Inc.
Solution	Cognos 8
Sample Customers	Idaho State University, Penn State University, University of Kent (UK), University of Toronto (Canada)
Worth Noting	Canada’s largest software company; annual revenue is approaching (US) $1 billion.
Company	Hyperion Solutions Corp.
Solution	Hyperion System 9
Sample Customers	Arizona State University, Cornell University (NY), University of Akron (OH), Yale University (CT)
Noteworthy moves	Launched Hyperion System 9 in September.
Company	Microsoft Corp.
Solution	SQL Server Accelerator for BI
Sample Customers	Medical University of South Carolina, University of Pittsburgh Medical Center, University of Wisconsin-Madison
Noteworthy Moves	Acquired ActiveViews Inc., a privately held reporting software specialist, in mid 2004; Business Scorecard Manager shipped Nov. 1; Microsoft Office 12 with BI capabilities slated for delivery next year.
Company	Microstrategy Inc.
Solution	MicroStrategy 8
Sample Customers	University of Bolonga (Italy), University of Miami, Technical University of Munich (Germany)
Worth Noting	Third quarter 2005 revenue was $65.8 million, versus $60.6 million in the third quarter of 2004, a 9% increase.
Company	Oracle Corp.
Solution	Oracle Business Intelligence 10g
Sample Customer	Vanderbilt University (TN)
Worth Noting	The company’s latest software initiative, Oracle Fusion Middleware, aims to integrate data from disparate systems.
Company	SAS Institute Inc.
Solution	SAS Enterprise BI Server
Sample Customers	University of Alabama, Sheffield University (UK)
Worth Noting	World’s largest privately held software company; recently inked higher education software partnership with Datatel Corp.

Common BI Setbacks

Unless managed at the CIO level, BI projects can easily overwhelm a university. The biggest risk is multiple departments deploying multiple BI platforms without any central oversight. This scenario is eerily familiar to CIOs who wrestled with network software installations in the late 1980s and early 1990s.

When PC networks were in their infancy, universities installed a mix of Banyan Systems Inc. VINES, Digital Pathworks, IBM LAN Server, Microsoft Corp. LAN Manager, and Novell Inc. NetWare. “In many universities, each department proceeded on its own and the result was a hodgepodge of incompatible network software,” recalls Jill Cherveney-Keogh, director of Academic Computing at NYIT.

It took roughly a decade for universities to sort out the incompatibilities, increasingly standardizing on a mix of Windows, Linux, and Unix. Now, that same scenario seems to be repeating itself in the BI marketplace. In the mid-1990s, university departments deployed a range of BI systems—some of which didn’t work with one another. Now, universities are taking corrective actions. “We’re seeing a shift to standardized, enterprise-wide BI solutions,” confirms Scott Lawrence, director of Product Marketing at Cognos. “This typically lowers BI’s total cost of ownership, reduces training costs, and paves the way for best practices across an organization.”

Start Small

Most successful BI projects start with a specific pain point in a single university department. At NYIT, the pain point was alumni giving. Founded in 1955, NYIT maintained alumni records on paper until around the 1990s. Director of Alumni Relations Jeff Morosoff has spent the past few years ensuring records for all graduates are input into a central NYIT database. As the database gained more and more graduate names, NYIT had a richer and richer list of names to call on for annual giving programs.

Mauriello, NYIT’s vice president of Development, joined the college in 2002 and immediately harnessed Morosoff’s database work. The system was quickly linked with NYIT’s Web site and e-mail systems, allowing alumni to donate online, and empowering NYIT to reach out to alumni electronically with a few points and clicks of a mouse.

Even if a BI project is limited to a departmental deployment, it’s critical to keep the university CIO in the loop. Without CIO recognition and involvement, other university departments may embark on BI projects of their own—without leveraging the knowledge and skill set gained from the initial BI project.

Competence Counts

In order to share BI expertise across an academic institution, many universities are opening so-called BI Competency Centers—a term coined by Gartner Inc., the Stamford, CT-based technology research firm.

“A [BI Competency Center] enables an organization to coordinate and complement existing [BI] efforts, while reducing redundancy and increasing effectiveness,” asserts Patricia Whitaker, strategic programs director for Customer Solutions and Alliances at SAS. “The centralization of these efforts ensures that information and best practices are communicated and shared through the entire organization so that everyone can benefit from successes and best practices.”

Generally speaking, a BI Competency Center is a permanent, formal organizational structure comprising of members from a university’s offices of finance, development, enrollment, HR, and information systems, just to name a few. According to SAS, implementing a BI Competency Center provides multiple benefits, including: heightened credibility and confidence in university information; increased use of BI throughout the organization; accelerated and effective decision-making optimization of resources and decreased cost; and innovation of business processes through technology.

Ultimately, BI Competency Centers allow universities to leverage best practices for BI deployments across multiple schools or departments, notes Lawrence from Cognos.

Money Matters

Although BI software can empower multiple university departments, one of its best starting points appears to be the Office of Development.

Just ask Yale University (CT), where progressive fundraising provides 30 percent of the university’s annual operating budget. Yale’s Office of Development gathers and stores donor information in an Oracle database, but the office—until recently—had no effective way of leveraging the information.

Eager to correct this shortcoming, Yale recently deployed Hyperion Software’s Brio Performance Suite to plan effective one-to-one marketing campaigns based on donor interests. From Web browsers, more than 160 fundraising staff and their managers can now view information about more than 100,000 donors in real time, enabling them to identify new fundraising opportunities and relate to donors on a more personal level.

“As the core of our business intelligence initiative, Brio enables us to be more sophisticated in our marketing efforts based on the individual interests of our donors,” says Marcia Schels, project manager for Yale’s Office of Development. “Brio enables fundraisers to access, view, and analyze donor affiliations, contribution history, and specific academic and personal interests to develop campaigns around each donor segment.”

For example, if fundraising administrators know that a prospect is interested in the university’s building renovations or funding for academic scholarships, Yale can act quickly on that information, whether that means e-mailing relevant information or calling the prospect as part of a targeted phone campaign.

Translation: Yale’s fundraisers now spend far less time waiting on reports and doing paperwork, and more time talking to donors. In fact, since Brio’s deployment, annual giving to Yale has risen 10 percent and the Office of Development’s productivity has jumped by 25 percent.

Even as the BI industry gets set to consolidate around fewer software providers, it’s easy to see why Yale development officers retain their peace of mind. A lesson for your institution, perhaps?