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Understanding business intelligence

Business intelligence is evolving - in every country and in every industry throughout the world.

This article originally appeared on the BeyeNETWORK.

Over the past thirty years, I have been studying the practice and technology of business intelligence (BI) in its various forms. It recently occurred to me that business intelligence is a key enabler of globalisation as we see it evolving in every country and every industry throughout the world.  

Discussions with my colleagues at the Business Intelligence Network revealed that their customer base has rapidly grown in 2006. Most of that increase, which is approaching 50%, comes from participants outside the United State.

Does this indicate that the rest of the world is “catching on” to business intelligence? Or, does it indicate a shift in the nature of business intelligence?

Shifts in the Nature of Business Intelligence
I believe that it is the latter. Other regions of the world are driving fundamental changes in business intelligence through the localization of business intelligence to their businesses.

This dynamic is illustrated in Figure 1. In the first stage of the evolution of business intelligence, corporations and software vendors in North America (N.A.) have dominated business intelligence since the early 1990s, exporting their technology to other parts of the world. (Note that the term N.A. is used broadly to include Western Europe and other parts of the high-tech world. For instance, Business Objects was formed in Paris, and many BIcomponents emerged from Britain and Australia.) As others have adopted N.A. technology, it has reinforced the evolution of BI technology, but from an N.A. perspective. We refer to this technology as “classic BI.”

Figure 1: The Evolution of Business Intelligence

As shown in Figure 2, we have entered into a second stage driven by globalisation forces. The dynamic of this stage is the localization of BI technology by millions of skilled and motivated individuals in diverse countries across the globe. As these individuals compete in the global economy, they are driven to create innovative solutions to their unique problems. Thus, the loose collection of technologies that compose classic BI is rearranged and enhanced in new ways. This fresh wave of BI innovation is often shared with other parts of the world facing similar problems. We refer to this newer technology as “globalised BI.”

 

Figure 2: The Globalisation of Business Intelligence

As the rest of the world hurtles ahead, the classic BI community is in danger of being left in the dust. It is unfortunate that many established multinational corporations are largely ignorant of these global shifts in other parts of the world.

Implications
The implication to BI professionals is that we must globalise our thinking about business intelligence and be aware of its varied impacts. We must think of business intelligence as an enabler that allows us to slice through the complexity of globalisation, seeing the core trends and critical needs, as they are changing daily.

We must think of business intelligence as a magnet that coalesces many diverse technologies to support complex globalised supply chains. And, we must be sensitive to the ways that business intelligence is being specialised to solve specific problems of specific regions across the world.

Business intelligence has the potential to evolve into the collaborative fabric for a “healthy” form of globalisation, where the world can benefit from open and fair competition based on efficient production of goods and services. However, we must not be naïve, recognizing that globalised BI is creating serious ethical and political issues involving globalisation.

The Series
In future articles of this series, we will probe the writings of Thomas Friedman and others, and examine specific examples of globalised BI.

Friedman’s recent book, The World is Flat, emphasizes the flattening, not of the physical world, but also of the economic and political world. He refers to ten flattening forces that are impacting global supply chains driven by value-added services, competitive commoditization and untapped labor pools. Friedman states, “Anything that can be digitized can be outsourced to either the smartest or cheapest producer or both. Everyone has to focus on what exactly is their value add.” He readily admits that globalisation is not universally good for society. Although globalisation brings the benefits of diverse low-cost goods and services, it also brings major disruptions to local economies. 

Friedman is controversial, being both loved and hated, but his perspectives cannot be ignored. As preparation for the next articles, I would recommend reading this book (and even his previous book, The Lexus and the Olive Tree). You should focus on the role that globalised BI is having on the current affairs of the world.

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