Business Intelligence Is Transforming Into Intelligent Businesses

NEWS ANALYSIS: Business Intelligence is being transformed by the ability to use massive cloud computing services, big data analytics and huge external data sources. 

Business intelligence is passé. Now it's the intelligent business, and this shift is more than a simple name flip.

The shift underscores the altering of business intelligence from making better use of the data inside your company to using those vast pools of data outside your firm (big data if you will) to capitalize on customer sentiment, buying patterns and economic indicators.

This flip from data-driven decisions beginning inside your company and pushed to the outside world to outside data happening in real time being the driver of your company's inside operations means big changes for the traditional business intelligence and business analysis vendors. And, of course, those changes present opportunity for the intelligence upstarts.

First, let's talk about the NFL draft. What does the pro football draft have to do with business intelligence? Recently The New York Times published an interactive guide to the draft that allowed users to explore the relationship between an early pick and star performance and found early picks were not a particularly good indicator.

In an explanation about the guide, the developers explained, "Our goal was to show an odd reality: Even though N.F.L. teams do tend to pick the 'best' players early in the draft, there's a tremendous amount of chance involved. The best 10 eventual N.F.L. performers will not be the first 10 players drafted—or even close." Picking the best players is often an internal analysis performed by NFL teams. Too bad that picking doesn't always pay off.

Discovering that "odd reality" is the goal of the intelligent business. The opportunity to use the outside world to find a new market, a new price level or a new product that was simply impossible to achieve via traditional inside-the-company product development or seat-of-the-pants wild guesses by company founders.

While Steve Jobs was not a fan of traditional market research to discern new products, he had developed that capability to discern the "odd reality" before big data discovery made the process available to us mere mortals.

This shift toward the intelligent business was much in evidence recently on a visit to San Francisco, where I attended both the Amazon Web Services Summit and the SAS Global Forum Executive Conference.

SAS Institute and its co-founder, James Goodnight, largely invented software-based business analytics starting in 1976. While the years of rapid growth seem to be behind it, the company grew from $2.75 billion to $2.87 billion in 2012.

The company poured 25 percent of its revenue back into research and development. The company is privately held, which mutes possible concerns regarding so much revenue going into R&D for relatively minor growth. The company has a commanding share in business analytics, a loyal customer base and a good track record of customer success stories.