Taking BI to the next level

OVER THE LAST several years, Business Objects has emerged as a leader in the BI (business intelligence) software category. As the CEO of Business Objects, Bernard Liautaud plans to take the company to a higher level of intelligence by leveraging integration technology such as Web services. In an interview with InfoWorld Editor in Chief Michael Vizard, Liataud talks about the value of BI in an increasingly unforgiving business climate.

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InfoWorld: What areas having been driving demand for your tools and applications?

Liautaud: What we've done in the past few years is focus on business analytics and intelligence. One area is the enterprise space, which is a core business for us. That is about reporting analysis on top of a relational database or application. The second area of the business has been driven by extranets. That's been an extremely good business for us because it grew last year at about 90 percent and it represented about $80 million of revenue. We have about 750 customers doing that.

InfoWorld: What's behind all the extranet activity?

Liautaud: Companies realize they have to extend the relationship that they have with their customers. If they want to differentiate their offering, vis a vis other vendors, then they could differentiate that offering by providing value-added information. So, for instance, companies can provide corporate customers with a complete look and view of the way they use a service. People are realizing that beyond e-commerce, which [is] transacting over the Web, there is an even greater need, which is just sharing information. And there's so much that you can give your customers in terms of pushing data. You basically offer them self-service access to information.

InfoWorld: How has Business Objects evolved in the past couple of years?

Liautaud: What we've done up to now was build tools and platforms, and we [left it to] the customer to go figure it out. What we've done in the past year [to] year and a half is start offering analytical applications. We build these around a particular data model for a business process. We build basically an analytic platform or an application foundation that enables us to plug some modules on top and this is now integrated. We know that in the analytical applications there will be a certain chunk of the application that will be bought and another chunk that will be built. Our strategy is a dual one, where we say "We'll give you the analytical application platform on which we plug our own modules. But if you have something that is very specific to your business, you can use our application foundation and build your data model and it'll work right away."

InfoWorld: What do you think the relationship between BI and workflow applications is going to be?

Liautaud: Workflow is a parallel activity for now, but I think progressively it will converge because when transactions move from organization to organization, you want the information that flows with it. The next step that we are working on now is the concept of what we call business intelligence networks. Today we are not able to give customers the full view through a supply chain because the extranet is more of a point-to-point solution. So the next step is creating multipoint extranets by converging what we do with our BI capabilities and Web services. Today, we access a Web site and we do our analysis there. But we will be able to really grab the information and aggregate it. That's going to be a very, very interesting development.

InfoWorld: In this economy, what makes BI a compelling application?

Liautaud: The last thing people want is to be is surprised at the end of a quarter. But they are very often surprised because they can control maybe their direct sales force, but they don't control their channels. And not knowing where the products are going is a big issue. People are also realizing that if their revenue is going down because of the economy, the only way they can protect the bottom line is to reduce costs. And if you want to reduce costs, they have to have a very good understanding of where the inefficiencies are. They need to really understand the financial structure of the organization, but also how they use suppliers. They need to have a very good view of how these suppliers perform and how much they cost. The analytics on top of the data that we have in our applications is critical to reducing cost.

BI also has fast ROI based on small investments. That's exactly what people want. They want quick wins. They can't do a $5 million investment and have a 24-month return on investment.

InfoWorld: A lot of application vendors have built BI tools into their applications. Why is this not necessarily the right approach from your perspective?

Liautaud: BI is a horizontal application for several reasons. The real value of BI is that you can get answers to fairly complex questions. And most of the important questions where there is a lot of value cut across many applications. The real value of analytics is that they span across all these systems. Secondarily, customers want to have cockpits of information. They're going to take data from different places, aggregate them, and present them in a very meaningful way. And thirdly, there is a big need for standardization. If you [have] many different tools, you get big IT costs because of different user interfaces, different metadata, different security, and different centers of expertise. So I think we'll continue to do well in spite of the application vendors coming into this space.

InfoWorld: Does this mean you are becoming a supplier of corporate portal software?

Liautaud: We have a portal, but we do not pretend to be the universal company portal. We're not an enterprise information portal. We are a BI portal, and in a number of instances ... our portal is going to be plugged into another portal.

InfoWorld: What's the best approach to accomplishing that integration?

Liautaud: I think the standards would be at the Web services level for communicating between these different BI components. That's one thing that we're trying to promote by trying to define basically a standard around a BI Web service using fairly standard XML definitions. I think the next step in this is going to be defining really the circulation of information within an organization. That is going to go beyond just one particular type of document. The information policy of a company is going to be very important in order for a company to realize the power of BI.

InfoWorld: Much of what we use BI tools for is to tell us what already happened. So will we ever get to point where these tools will be able to alert us to events before they happen?

Liautaud: I think so. And there [are] several ways to get there. One is with fairly sophisticated techniques for prediction and data mining. But there's also one other route that is much less technology focused because it's about capturing best practice and trying to put that into the system. You don't need data mining for that. You just need good thresholds and good broadcasting alerts based on past experience. So you have to capture past experience and put that in the system. Implementing business rules, I think, is going to be a factor in doing more prediction. I think that's something that we will see more and more in BI.