Businesses and IT departments are hearing, or reading, again and again that business intelligence (BI) solutions have measurable return on investment, and as such should be high on spending priority lists.
SAS Institute Inc. co-founder, president and chairman James Goodnight spoke recently with ComputerWorld Canada’s Victoria Berry about the twists and changes in the BI software industry. Goodnight, who holds a doctorate in Statistics from North Carolina State University, said some definitions need to be set out.
CWC: SAS tends to define business intelligence a little differently than other vendors in the industry. Are your definitions becoming more mainstream, or are others coming around to your view?
Goodnight: I think we see companies like Business Objects, Cognos and Hyperion have used the term business intelligence to mean creating SQL queries and printing out the results for people. There are not any databases out there that can give you the probability that a person is going to quit using the services at your company or quit buying from you. You’ve got to be able to have the analytical models to really help a company. You can’t figure out who’s likely to leave you with a drill down report or multi-dimensional database. You can’t do it. You can’t come up with predictive models.
We are actually focusing and putting a lot of effort on developing what everybody else is calling BI tools. In other words a great front end that allows users that are maybe not as sophisticated as some of our other users to create a report themselves, using SQL queries and things of that nature. The idea that you can build a little screen and type a little something in and get a great report out we’re going to do that too and go after that low-end of the market that some of the other BI vendors have been working on.
CWC: What are the main business intelligence issues going to be as the world shifts from client/server to more Web-based deployments?
Goodnight: Web-based is pretty much where we were 25 years ago or 20 years ago when we were all using dumb terminals on the mainframe. Relying on a central machine to do all the work and just send the results to a screen in front of us. We’ve just really come full circle.
CWC: Were you expecting that?
Goodnight: Five years ago we sort of hedged our bets. We weren’t sure if we were going to go down the Windows route where Microsoft dominated the desktop or whether we were going to go browser, so to protect ourselves we started development on both platforms as the ultimate desktop view of the enterprise. We’re in good shape we have excellent tools that are Microsoft Windows-based, but also of late we’ve put more and more effort into browser technology because that clearly is going to win. It’s got so much appeal – as we get into broadband and you can connect to the Internet anywhere in the world, there’s no doubt browser has won.
CWC: Is BI becoming a buying priority for the enterprise?
Goodnight: Absolutely. Nobody in this environment is going to go into a five-year $30 million ERP expansion. But ERP does not do much more than replace systems that are already there in the first place. You end up instead of having a legacy system, you have a “new” legacy system. It really doesn’t give you any intelligence. That’s the layer business intelligence brings to the table. And that allows companies to analyze and see where customers needs are and what customers are doing, to be able to understand inventory requirements, to be able to forecast sale of goods, to use marketing automation to select the right subset of people to send your next offer out to.
These next few years will be strong for BI. We are the software that will give good ROI very quickly.
CWC: Beyond BI, SAS (which is privately owned) has an extremely high employee retention rate. In this economy, how are you avoiding layoffs?
Goodnight: In 2001 staff increased by six per cent and in 2002 it increased by 8.5 per cent. It did that because we were willing to take a reduction in profits so we could build for the future. We hired a number of additional R&D people. Man, there was talent out there on the street looking for jobs, and we wanted them. We brought ’em in. So while the economy was slow we really did the opposite of other companies. We added people. Has it paid off? First quarter worldwide revenues are up 18 per cent. We’ve seen tremendous growth in Canada and the U.S., especially in new sales. If we were a public company we would not have been able to do that. I could not tell Wall Street analysts, “Guess what? We’re going to cut profits by 20 per cent this year so we can expand.” You do that and your stock tanks.
CWC: You’ve said in a couple recent interviews that SAS really wants to focus on the financial industry, how do you plan to do that?
Goodnight: We decided to begin to put teams together to focus exclusively on that industry about a year ago. The Patriot Act was passed in the U.S. and that required anybody who handles money to have anti-money laundering software in place. We decided that SAS is extremely well-suited for this. Our data staff is completely capable of exercising all the different scenarios that are involved in trying to find money laundering situations.
What we’re trying to do now is not only provide all the tools we had, but specifically focus a group on the particular needs of the financial industry – credit card fraud, fraud in general, anti-money laundering, all of these things. We’re doing the same thing for pharmaceuticals. There we’re developing the SAS drug development system that allows pharmaceutical companies to store all data, all analysis in a single portal framework, so that it’s viewable all over the company.
CWC: What is worrying you this week?
Goodnight: My golf game. Yesterday, I shot a 96. It’s been such a cold winter, I have to get out and practice more.