By Sergio Garza Govela, VP of Sales

Not to jump on the “let’s analyze why LucidEra went out of business” bandwagon again (well, yes actually). There have already been countless blog posts and articles by respected analysts and bloggers such as Trident Capital, their VC firm, David Raab, and Merv Adrian, to name a few, that have discussed the reasons.

Of course other Saas vendors, our competitors, have done the same.

But it brings up a question on the value that BI providers bring, and Saas BI providers in particular. Where’s the business value?

In a Tweet to us a few weeks ago, James Taylor who blogs on decision management at The BeyeNetwork, told us that in order for Saas BI vendors to avoid failure:

…just doing reporting is not enough. (they) Must help run the biz.

It’s amazing how profound you can be in less than 140 characters.

How can Saas BI vendors really provide business value to businesses and avoid being the next LucidEra?

How Intelligent Is Your BI Solution?

The stated goal of Business Intelligence applications is to empower executives or company personnel to make business decisions based on data presented in an easy to consume format.

The classic BI functions have been:

• Predefined Reports
• Customizable Reports
• Analytics

Predefined Reports. These are basic reports that come with pre-defined parameters, such as expenses and revenues. Many ERP systems pre-package these types of reports, as do by BI providers.

Customizable Reports. These allow end-users to to select fields they can add remove from reports, and to change the structure of the reports.

Analytics. Using analytics the end-user has the ability to generate any type information they need, create ad-hoc queries, generate new reports based on existing reports or from scratch, or even use analytic features such as slice and dice, trending, what-if analysis, graphs, etc.

The three functions mentioned above provide information, so you can see what’s going on in your enterprise.

But they don’t provide intelligence.

The system depends on the intelligence of the user to isolate the relevant data and subsequently to make the correct decisions.

BI Tools Helping Make Proactive Business Decisions

Proactive Intelligent Information. Now this is a BI tool becoming really smart.

This method enables the system to automatically detect if an organization is under-performing on revenue, or if a particular sales rep is in trouble, or any number of metrics. It follows the same principles as analytics, but with one important exception: instead of manually defining conditions for determining if your company is meeting or under-performing on it’s key performance indicators (KPIs), additional algorithms automatically determine this.

Without getting too technical, these algorithms on a very basic level could provide a moving comparison versus the previous period, or it could be more sophisticated such as moving averages to highlight sales reps that are below average revenue for the last 4 months, or predictive to highlight potential problems.

Proactive Intelligent Decisions. This is a Business Intelligence tool providing ultimate business value. It enables you to take intelligent actions.

At this level, the system not only analyzes the information for you, but suggests the best decisions to make.

The suggestion could come from algorithms that identify other metrics that could have an effect on the current metrics. It could also come from calculating all correlated metrics that are not performing well, or from segmentation algorithms that identify the dimension that is the root of the problem.

Finally, the system could have a built-in knowledge base containing suggestions on how to correct certain problems. The knowledge base would be built based on past decisions and the results of these decisions. This would enable users to learn from and share past experiences.

The Business Value Of Proactive Decisioning

What does this all mean for business owners? Real business results that can help correc a company’s performance mid-stream before it veers way off course, thus avoiding an iceberg and becoming the next Titanic.

In my next blog post I’m going to give the example of a 100 store retail client of ours that used some of our proactive intelligence and decisioning features to save the day on many occasions when retail sales were falling below expectations during the day, and what store managers were able to do based on this information to change course and increase retail sales during the same day.

A quick preview: they didn’t have a magic wand to magically make more shoppers appear at their doors.

What do you think is the importance and value of intelligence in a Business Intelligence tool? Please comment below, and Tweet us or Stumble us or Digg us or Delicious us. Don’t forget to Sugar us!

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