Business Intelligence software gives managers the tools to draw from many data sources and take a snapshot view of their company's performance. Why are business intelligence vendors defying the industry trend and continuing their stellar growth?
Virgin Mobile has built a loyal following within Australia by offering no-nonsense prepaid and contractual mobile phone plans designed to win and keep customers through sheer value alone.
But that value wasn't always self-evident. Finding out what customers want takes market research, a willingness to sacrifice margins to offer a better deal, continual monitoring of channel and business performance, and an effective way of collecting and analysing all manner of business data.
For Virgin Mobile, the solution came in the form of a business intelligence (BI) system that was implemented in late 2000 and quickly became critical to the company's operations.
Because it was administering its business using Oracle databases and financial applications, Virgin mobile decided the easiest way to implement its BI system was by using Oracle's own Business Intelligence add-on, with Cognos client-side software providing an easy-to-use interface for users.
A careful design and data integration strategy helped the company deploy the solution in just three months, delivering on Virgin Mobile's vision of managing each customer by their SIM card number--using a single identification number across various data sets simplifies the process of cross-referencing customer usage between a variety of products.
"We pull usage records from different platforms to try and understand customer usage and how we can better target products to them," says Nick Gatland, IT manager with Virgin Mobile, who helped expand usage of the 400GB database from the marketing organisation across the entire organisation.
"We analyse customer usage, average revenues, calling patterns, the types of products people buy, which [dealers] are performing well, and so on. It started out as a marketing database, and we now use the system for straight reporting of business key performance indicators [KPIs]. It's a multi-layered set of information."
BI has become central to Virgin Mobile's forward planning, but the company is hardly alone. Over the past few years--particularly as the rise of customer relationship management (CRM) forced companies to find new ways of monitoring and responding to customer desires--BI has become widely implemented and forms a critical part of most large businesses' long-term strategies.
This importance is reflected in analyst predictions, which give BI a rosy outlook despite a temporary slowdown in 2000 and 2001 due to delayed software purchases and a trend toward smaller contract sizes. According to research firm IDC, the worldwide BI market is expected to grow at 27 percent annually, from US$3.6 billion in 2000 to be worth US$11.9 billion globally by 2005.
Those healthy figures have been reflected in some quite healthy financial results from BI companies despite the market's overall lacklustre performance. Crystal Decisions' revenues have grown a reported 30 percent quarter on quarter for the past seven quarters, and SAS Institute reports Q1 revenues this year were 50 percent higher than for the same quarter in 2001. Clearly, customers are still willing to pay for the right BI solution even as tough economic times force them to trim back overall spending.
