Archive for June, 2011

Business Analytics For the Masses By Albert Pang

Monday, June 27th, 2011

There has been a lot of talk about the merits of business analytics, which is a cut above what business intelligence can do, but we will get to that in a minute. What matters is that we are at the tipping point of a new way of gathering intelligent data, aggregating and cleansing loads of them, and finally making sense of the obvious and not-so-obvious insights for planning and forecasting purposes through role-based reporting.

For more than a decade, much of the growth of the business Intelligence software market has been about helping large organizations manage massive amounts of data, querying them with data-mining tools and generating sophisticated dashboards that show visually stunning results ranging from complex key performance indicators to simple-to-understand metrics.

The Big Data phenomenon is just that. After years of collecting petabytes of data, many large enterprises now have access to anything they want to know about their customers. Apple is said to be beefing up its storage capacity to the tune of 12 petabytes in order to manage the video download of its customers.

Simultaneously these multinationals are unleashing a torrent of data that none of their customers can decipher intelligently. Recently a CIO spoke of the feed for its business data subscribers now reaching 700,000 updates per second, an output that is beyond human capacity to absorb, let alone doing anything with it.

SMBs Embrace Business Intelligence
Meanwhile, small and midsized companies have become the next battleground for business intelligence software vendors vying to bring enterprise-class analytics and reporting tools to the masses, an outcome that could have multiplying effects to the applications market.

As shown in the following graphic, SAP, which has already held nearly a quarter of the $7-billion BI market worldwide, is making that force multiplier more evident.

Worldwide Market Shares of Top 5 BI Vendors, 2009-2010

Earlier this month SAP introduced SAP Crystal Server 2011 and the 4.0 release of SAP BusinessObjects Edge Business Intelligence. The products, which can be purchased as a bundle or separately, offer improved data search, drill-down and dashboard viewing capabilities. Additionally SAP BusinessObjects Edge 4.0 extends support to mobile users, while its Event Insight function allows SMEs to monitor business scenarios in real time and respond to market changes accordingly. Its text data analysis feature even allows customers to analyze what’s being said about their products and services on social media sites such as Facebook and Twitter.

Such enhancements are instrumental in helping small and midsized companies make smarter decisions in response to shifting market conditions including whether and when they should adjust their inventory levels, channel promotions or marketing expenses based on real-time data. By leveraging SAP’s on-demand delivery model, these users can either implement these BI solutions without the help of their IT departments or proceed with these projects in a compressed timeframe by taking advantage of SAP rapid deployment options.

In addition to selling the products directly, SAP has been working with a growing army of OEM and reseller partners to make BI as ubiquitous as possible. For example, Syspro, which has secured a base of 14,500 mid-market customers in such verticals as consumer and packaged goods, life sciences and manufacturing, is incorporating many of the latest dashboard capabilities from SAP Crystal Server to boost the usability of its ERP applications by making it easier for business users from CFOs to purchasing managers generate tailored reports for their day-to-day responsibilities.

For Syspro, the combined ERP and BI software for functions like inventory management, executive dashboard and what-if scenario visualization has galvanized support for its products, while delivering tangible value for users that now have easy access to real-time information. For example, Honest Tea, a beverage maker, cited its ability to halve its inventory levels because of the availability of such useful information by running the Syspro system.

Pentaho, Tableau, Qliktech Join The Fray
SAP is not the only BI vendor eying the SME market with great interest. Pentaho, which has made its name in the open-source BI marketplace, introduced Pentaho BI 4 Enterprise Edition in June. One of the key targets is non-technical business users who can use the new product to create highly formatted, interactive reports with zero training or involvement from the IT department.

While Pentaho has been used by big organizations like Sheetz and Swissport, it has also attracted hundreds of small and mid-sized commercial customers, not to mention the viral effects on those who have been using its BI products for free at a rate of one download every 30 seconds.

Tableau is another fast-growing BI vendor that has made its name by lowering the barriers of entry with Tableau Public, a free service that anyone can use to create and publish interactive data visualizations to the Web. Since its launch in February 2010, more than 10 million Web pages with Tableau Public data visualizations have been served.

Elsewhere, Qliktech has seen its customer count soaring to more than 18,000 from 13,000 in 2009, after making small and midsized companies a major plank of its BI strategy. Quadax, one of Qliktech’s customers that sells its own software into life sciences vertical, was able to implement the mobile BI product from Qliktech in six weeks and now 110 Quadax users use their iPad to access analysis for managing payer reimbursement metrics and trends from clinical laboratories, vastly improving the quality of data they receive for better support of their clients.

Qliktech also OEMs its BI products to vendors such as Deltek, which specializes in business applications for small and midsized customers including 1.8 million users representing more than 14,500 firms in architecture, engineering and construction as well as government contracting space.

Business Analytics Becomes The Holy Grail
When one tabulates the potential of these vendors and the new and recurring revenues they generate from customers and reseller and OEM partners, the market for business intelligence software is expected to grow from $7.3 billion last year to $10.4 billion by 2015.

But the Holy Grail may well be the business analytics market, which includes not just Business Intelligence, but also features such as enterprise information management for data aggregation and cleansing and enterprise performance management for planning and forecasting.

Moreover SME customers are turning to business analytics to complete tasks like applying analytics to Web front-end in order to deliver role-based reporting. In order for that to happen, more intelligent data will need to be layering on top of the analytics one gets from monitoring eCommerce sites or other customer-facing channels like retail stores. The analytics could become more useful if one can ascertain the impact on inventory, service and staffing levels, all of which will require bringing in additional software features like supply chain, customer relationship, and HR management, boosting the total addressable market for business analytics to new heights.

Instead of a $10-billion market opportunity, the worldwide business analytics software opportunity could reach $30 billion by 2015, according to our latest estimates. Based on the direction that these vendors are headed and the keen interest among small and midsized companies, a user community that has barely begun leveraging business analytics as a competitive edge, the payoff for vendors and other key stakeholders is real and unmistakable.

The question is whether any one has the right formula of delivering smart and high-impact business analytics solutions and tying them together in a neat and attractive package for any business to realize and achieve the predictable and desirable outcome.

Don’t forget to check back for our continuous coverage of the business analytics market. Write to us at info@appsruntheworld.com for any questions about our market sizing reports.

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Posted in SAP

Deltek Profits From Project-Focused Markets By Albert Pang

Thursday, June 2nd, 2011

With a knack of automating professional services organizations and government contractors, Deltek has what it takes to steer these customers and ultimately reshape the way they manage the lifeblood of their operations – complex and long-term projects.

In fact, Deltek, which has been selling into project-focused organizations for nearly 30 years, is experiencing an upturn in its core market, enlarging its global presence, and realizing the benefits of its recent acquisitions.

After a long recession that has dealt a blow to its customers in professional services and government contractor verticals, Deltek is seeing shoots of green in areas that could hold the key to its future.

With its unrelenting focus on project-focused customers, Deltek’s perseverance has begun to pay off as it parlays its domain expertise into new market opportunities and expanded product offerings.

Kickstarting Insight
At Deltek Insight, its annual customer conference held recently in Nashville, Deltek announced its plans to take aim at fast-growing markets from on-demand applications delivery to real-time analytics, while shoring up the project management and market-research capabilities of its long-time government contractor customers.

The key announcements included Deltek First, the vendor’s on-demand applications for small and mid-sized government contractors. Leveraging its industry-specific knowledge and the framework from its GCS accounting solution, Deltek First offers robust project accounting and reporting, time and expense collection, and fixed assets capabilities, along with viagra development and market intelligence add-ons.

Under a partnership with BI vendor QlikTech, Deltek has introduced Deltek Costpoint Analytics, a dashboard and analytics solution for professional services organizations to better track project performance, manage budgets and optimize profitability with the use of advanced business intelligence.

The vendor also introduced Deltek PM Compass, which allows program managers and project leaders in the government contractor space to have an aggregated view into complex programs. It augments their capabilities with automated workflows, alerts and notifications, as well as built-in data-mining and other tools to help them manage programs from one central location.

These announcements kickstarted a new growth period for Deltek following its recent acquisitions, product enhancements, and more importantly the expansion of its industry content and international operations.

Compelling Synergy
In March 2011 Deltek acquired Washington Management Group including its FedSources, complementing its INPUT business, which enables companies to identify and develop new business opportunities with public sector organizations. Combining its GovWin software with market intelligence and business development tools from FedSources and INPUT allows Deltek customers to have a better shot at winning government contracts.

Last year Deltek also acquired Maconomy, which has established a major foothold in Europe and other regions with its full suite of applications designed for automating financial and project management functions at professional services organizations especially those involved in marketing communications, public relations, as well as accounting, consulting, and legal services.

In the first quarter of 2011, half of its biggest deals came from international sales as a result of the Maconomy acquisition. Hill and Knowlton, Leo Burnett and Ogilvy Public Relations are among Maconomy’s long-time clients.

Deltek’s flagship product Vision, which offers localized versions in Dutch, French, and Spanish, has enjoyed global acceptance with recent wins including Valstar Simonis, a Dutch engineering company with 85 employees. Tauw, a large engineering firm in the Benelux region, has standardized on a full suite of Deltek’s CRM, ERP and project management applications.

With an installed base of more than 14,500 customers and 1.8 million users, Deltek caters to architecture, engineering and construction firms as well as a slew of government contractors and professional services organizations that rely on the vendor to manage their back-office and increasingly customer-facing operations.

Moving upmarket
Though many of its customers are considered small and midsized companies, Deltek has also succeeded in selling into big firms including SAIC, one of its major accounts that has 40,000 users running its applications.

In fact the acquisition of Maconomy, which already offers multicurrency and local statutory support, has enabled Deltek to pursue bigger deals. Two of its major deals in the first quarter of 2011 came from organizations with more than 5,000 employees.

Regardless of their size, what these companies have in common is that because of the nature of their projects, whose duration can stretch from weeks to years, their business processes for costing, compliance and project management have grown in complexity.

Budget cuts from government agencies, coupled with increased competition, are also forcing Deltek users to look for better business development, customer relationship management and analytical tools to help them identify, pursue and capture new market opportunities.

As a result, the new products and services ranging from on-demand applications delivery to off-the-shelf analytics and Maconomy’s offerings for big professional services organizations underscore the integrated approach by Deltek.

By addressing the needs of professional services organizations holistically, Deltek is taking the high road similar to the transformation under way among its customers, which have had their share of mergers and acquisitions in order to achieve the economy of scale needed to replicate successful projects across sectors and geographies.

Deltek is replicating such best practices as well. For example, integration between Deltek Vision and Maconomy People Planner for resource management is under way. The same applies to consolidating the databases between content repositories from INPUT and FedSources.

Sustaining Momentum
Deltek’s recovery is still a work in progress and any sustainable organic growth will depend on the health of its mainstay – millions of small and midsized professional services organizations that subsist on a mix of government and commercial projects.

With an eye toward integrating its acquisitions as well as delivering new and expanded offerings for everything from project management to business intelligence, Deltek is on the path of showing solid growth with increased revenues and expanded installations.

After peaking at $289 million in company revenues in 2008, Deltek’s sales slumped because of the recession. Now incremental contributions from its recent acquisitions will push Deltek’s business to new heights topping $360 million in 2011. The move toward on-demand delivery and global expansion will entail Deltek’s reaffirming its commitment toward project-focused organizations, while ensuring that it has the right solutions to exploit untapped opportunities in new regions.

Feel free to email me at apang@appsruntheworld.com and tell me what you think of the future of enterprise applications in the professional services vertical.

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Posted in ERP