I just returned from BetterManagement LIVE 2005 with more questions than answers.  That’s a good sign.  Really.  The Las Vegas-based conference featured an all-star lineup of technology vendors, including SAS, Intel, Microsoft, IBM, Unisys, and HP.  Executives from Forbes, Amdocs, KSA, Accenture, Deloitte, and various governmental organizations were among the 1,000 or so attendees.  

Highlights of the two-day event were keynote presentations by former President Bush; Bill Emmott, the editor-in-chief of The Economist; Prof.  Thomas Davenport, the respected knowledge management guru; and Ed Ruggero, the West Pointer who co-authored “The Leader’s Compass.” 

The net takeaway was this: Business Intelligence (BI) will transform organizational leadership and fundamentally alter our lives as consumers.  That being said, BI faces a slew of marketing pitfalls in the near future.  The overarching concepts of BI remain elusive.  You could argue that the true meaning of a revolution doesn’t become apparent until the events have become contextualized in history.  But that won’t help you convince the CFO to spring for a BI platform today. 

The phenomenon formerly called BI 

So, what exactly is BI?  BI is the capability to understand the interaction of multiple business activities, in order to more accurately communicate to the present and predict trends and outcome.  It began as a sparkle in a merchant’s eye thousands of years ago. Now it requires big computers with heavy-duty analytic software to crunch through enormous computational problems.   

BI marches across every possible business process, whether it’s marketing, human resources, customer service, pricing optimization, or anti-money laundering.  BI is not a trend or a fad.  It’s more than a tool.   It’s a powerful lens that enables leaders to see deeper into the true nature of the problems they face.  If BI is so powerful, then why isn’t it a household word?  According to Intelligent Enterprise magazine, BI adoption rates are less than stellar. And when Jim Goodnight, CEO and co-founder of SAS says, “the biggest problem with BI today is the definition,” he’s sending us all a wake-up call.  

Marketers have been banging their heads for years trying the figure out the best way to communicate the value of BI.   Flanking terms such as “real-time” and “analytics” make sense to insiders.  But the rest of us are still looking for the big, simple explanation, the idea we can grasp intuitively.  

Grasshopper, if you want the answer you must first know the question 

Another reason BI is not widely adopted is that it is just not a human-scale process.  It’s hard to get your head around.  For example, a retailer who plans to have a Thanksgiving Day sale might ask a simple question: How much should we reduce prices so that we will sell everything on our shelves and simultaneously maximize our profit?  Getting the right answer is a huge computational process. Nobody I know can do that problem in their head.    

Driving a segment of one 

BI is a driver in the march towards one-to-one marketing.   “In the UK we are seeing an explosion of people communicating through stuff that can be downloaded from the web and played back with MP3,” says Steve Messenger, Director of IPSOS.   Meanwhile above-the-line advertising is shrinking in response to the budgets going more towards one-to-one communications.   “In the UK Heinz stopped doing television advertising for a mix of direct marketing and marketing through stores,” notes Messenger. 

BI helps business understand and respond meaningfully to the needs and desires of individuals. As BI drives results-based, one-to one strategies, mass media will become increasingly irrelevant.  As addressable media usurp the traditional roles of television and newspapers, the business case for BI gains strength. “Direct access to information has hugely increased and this is a producing a situation of disintermediation of the traditional processes of information as people use Google and blogs to circumvent them,” says Bill Emmott, editor of The Economist.  

The consumer-centric universe 

In a consumer centric universe, people navigate the world as they please, picking and choosing the information, programming, and products.  Now companies have to understand people if they want to orbit around their wants, needs, and values.   I choose the information, entertainment, and products I like.  I avoid advertisements I don’t like with things like TiVo, MP3, and blogs.  

I like kayaking, philosophy, and the music of Frank Black.  The company that bares this in mind can stop wasting their time and money trying to sell me stuff I’ll never buy.  If you really want to win my heart then give me a heads up when Black is touring New York.   The difference that is going to make a difference is the quality of information.  Emmott says, “A commoditized market will push business intelligence up-market in terms of deeper analysis and accurate information.”    

 Tom Davenport predicts that companies will ultimately compete on analytics. “Marketing is clearly becoming more analytical, more data based.  Analytics determine if a marketing approach works or not.  This is the primary reason web-based marketing is taking off – because it is addressable,” says Davenport.  Bill Gates, the chairman of Microsoft, foresees an era of “live software” with the launch of the new advertising-supported Windows Live and Office Live.  This is in direct response to Google who sells more adds than any television network.

Brand intelligence

In five years BI will help turn brand strategy into a real-time process, guided by forward-facing intelligence.   Today branding is about cohesion and consistency across the flat world of marketing communications.  Changes in brand positioning are sputtering reactions to market shifts.  The branding process is mainly reactive, based on what the competition is doing, and a minute later, did. 

But the reality is the market of today is not the market of next week.  Something will change.  In the future brand positioning will be laser guided by BI and change proactively.  Brand personality will be a dynamic and interpersonal experience.  Imagine a brand personality driven by intelligence, one that would learn about your interests and be responsive to you.  In this capacity a company can be a solutions provider and deepen the customer relationship over time.   What does this mean to the imaginative spirit?  It means BI will focus the creative arc.  A new dimension of opportunity is opening up to challenge the brightest stars of marketing. The curtain is rising on a new era.

It’s all about convergence

If some of this sounds too Orwellian, it’s time to smell the coffee.  Big Brother has been lying on the couch with the remote for some time.  If science fiction is the today’s cultural nightmare, then nostalgia for a simpler life is the cultural daydream.  The conversation on BI can take the high road.  It encourages the virtues of truth and accuracy across business processes. Business practices that rely on crossing your fingers and trusting your gut will simply disappear.    

The analytic marketer, a hybrid go-to super-user, will help steward the evolution of the marketing process toward a deeper understanding of the customer and market relations.  As Messenger says, “the art of marketing will be in the way marketers understand and satisfy customers better than the competition.”  

One-to-one marketing demands meaningful encounters with individuals.  These encounters can gain force by aligning with local realities, such as the natural surroundings, religious communities, history, cultural assets, and recreational opportunities.  Emmott points out, “the paradox of the global market is that you actually need to gain local knowledge about your customers, the regional nuances, the local supply chain, and things that shape the demographics.”  Actionable business intelligence begins with local truths.  If this topic seems to be a stratospheric swirl of technology, information, culture, philosophy, commerce, it should.  As Jeanette Slepian, the president of BetterManagement says, “the future is all about convergence.” And so the conversation continues…