Business intelligence has been quite the buzz word over the last few years, but what does the most recent Gartner CIO Agenda tell us about the future of this category of software?

Before we investigate this question, however, consider this: the noble game of chess has been around in some form or another in Asia and Europe for centuries. According to the World Chess Federation: "In its over 2000-years’ history from its origins in India and outlying countries in Asia, the game has undergone a series of changes and metamorphosed into its present day form by the 15th century."

Just as chess theory has evolved and the names of some moves and combinations have changed since the modern game’s inception in the 1400s, so has business intelligence. And those are not the only parallels that can be drawn, as we shall see.

First, however, to the results of the Gartner CIO Agenda for 2010: over the past seven years, business intelligence has been in the top of or topped the Gartner CIO Agenda. This year it slipped from number one to number five in one fell swoop.

So, is business intelligence dead?

Not exactly, but it is changing. Gartner defines business intelligence broadly as something which encompasses people, process and technology. Business intelligence is about how people use information to make a better decision, to renovate their products and to understand what’s happening in the market place. "Quite often technology is only just one component of that," says Ian Bertram, Managing Vice President for Gartner’s Business Intelligence Research team.

To illustrate this, business intelligence can be split into the ‘four Ps of BI’: performance, people, process and platform.

Performance – how to establish an enterprise-wide performance metric framework and put a balanced scorecard in place in an organisation;

People – how to get all constituents within an organisation together in common competencies and common capabilities across the organisation. This includes the people who use the information, people who produce the information, and the IT that enables all that information to come together;

Process – how to embed analysis into and around the processes within an organisation that make it successful; and

Platform – probably the most common one, which is really about how to build the technology capabilities within an organisation.

The technology has been a priority for CIOs for a long time but, as we see from the information above, the technology and the information it uses are only part of the business intelligence story. The technology is the rules of chess, but there is game theory, opinion, personal preference and gut feeling gained through experience to be taken into account as well.

Bertram explains: "The information and data all correlates with your understanding of the market and your opinion. You’ve got to kind of piece all of this together and, particularly at lot of executives, go on a little bit of gut feel as well."

Information is only one piece of the puzzle when people actually start to make decisions. Obviously we need the information we base decisions on to be accurate, high-quality and trusted – just as we needed the rules of chess to be standardised before we could begin to explore its permutations on a level playing field. However, as Bertram points out, there is more to decision-making than simple information, in whatever format the technology crunched the numbers and served them up. It’s also about the preconceptions, cultural mores and other such things which influence a decision.

" That’s why BI (in its broader aspect) is so important – it’s to uncover the nuances, and how people come up with decisions and why they come up with those decisions. It’s attacking those cultural aspects as well," he explains.

Why, then, if business intelligence is so crucial to a company’s success, has it slipped so far down the CIO Agenda?* Well, for starters it has only slipped four slots, unlike enterprise applications, which slipped to number 11 from number two this year! But it’s not that business application software is not a priority; just that CIOs are now looking at how they optimise the investment they have previously made, says Bertram. And that’s what he believes of business intelligence. What could be perceived as a fall from grace is actually more like a "sign of maturity" and something Gartner has been predicting for some years now. Business intelligence is now "a given – a ticket to ride", says Bertram. Our chess players have learnt the basics and are evolving their game.

In fact, if we consider the CIO Agenda’s rankings of ‘business expectations’ as opposed to the CIO technology rankings above, ‘increasing the use of information/analysis’ comes in at number three, up from number five last year. We can conclude then, that businesses have done the ground work for business intelligence solutions – the infrastructure is in place and now it is time to get the most they can out of it by focusing on increasing the usefulness of the information and analyses that exist within an organisation.

The recessionary times put a far greater emphasis on increasing productivity, something that business intelligence is perfect for, so it is still foremost in the minds of CIOs – just in another guise. This new guise comes in the form of a new buzz word in the business intelligence space: business analytics. Essentially businesses have the basic information, or the rules, and now they want to analyse them and employ game theory to make a convincing victory. And this correlates perfectly with the Gartner business expectations for IT, which has the increased use of information and analytics – the operative word – sitting at number three.

From a technology perspective then, business intelligence is moving into a high maturity area. And while that’s not to say there isn’t innovation there – there is – it does mean that organisations will start to focus on the other Ps: the performance, people and process, rather than the platform, or IT, area. There is likely to be consolidation too, as companies try to standardise their myriad business intelligence systems to gain some sort of level playing field and standardisation of information.

Gartner analyst Mark McDonald, who manages the CIO Agenda survey, recently wrote that organisations have laid the technology and now need to create; they have moved from technology to capability, and in doing so have surmounted the peak of their capital expenditure. Business intelligence is no longer a budgetary priority but, as companies move from buying solutions to applying them, it remains a business priority.

At a recent Business Analytics Briefing hosted by IDC there was an emphasis on analytics software not only being used to analyse the financial side of the business but also the operational side of the business. And the more it is used in operations, the more the data gathered can be used for predicting market trends and future requirements for the company.

As business intelligence becomes business analytics and business predictions, CIOs are being encouraged by CFOs to investigate newer, lighter-weight technologies, such as cloud and virtualisation. As such, business intelligence is likely to be the last technology to move through the ‘heavyweight’ technology model; a model that makes technology appear expensive. This does not, however, mean that business intelligence and analytics will be left out in the cold. Rather, on what McDonald calls a "radical note", he has observed "some early signs that companies are looking to use social media/web 2.0 technologies to address business issues that were previously assigned to BI. These lighter-weight technologies handle tacit information and semi-structured process support better than BI solutions that rely on structured and standardised information."

McDonald sees this as a great opportunity: "The availability of lightweight substitutes and the ability of social technologies to tackle some of the tougher problems will force ‘business intelligence the technology’ to give way to ‘business intelligence the capability’, reducing BI’s position as a top technology priority but raising its importance to enterprise performance."

So, is BI dead? "Yes," says McDonald, "It’s death to just thinking about the technology. Long live the capability!"

And, after all, capability is the endgame.