Worldwide Business Intelligence (BI) software revenue could hit $2.5 billion this year, according to Gartner. But is now the time for manufacturers to buy into the BI hype? Recent news and success stories from leading manufacturers say there’s no time like the present.

What exactly does Business Intelligence (BI) mean? Can it honestly, truly provide “insight to action” and boost competitive advantage?

According to Wikipedia, BI means having the ability, and perhaps more importantly, visibility to know all of the vital factors that affect the business, and being able to make sound decisions based on those factors. Customers, competitors, business partners, economic environment and internal operations can and should be monitored in order to make effective BI decisions.

But is now really the time for manufacturers to buy into the BI hype? Recent news and research says yes.

Gartner says worldwide BI software license revenues should reach $2.5 billion this year — a six-percent increase from 2005. And by 2009, Gartner researchers say the worldwide BI software market is expected to reach $3 billion. The blossoming BI market is a byproduct of a bullish trade in enterprise applications and CRM software, too.

Said Gartner analyst Colleen Graham in a statement:

Companies around the world have purchased more than $40 billion worth of enterprise applications, including ERP, CRM and HR, during the past few years. This has generated significant volumes of data in support of the operational processes they automate.

CRM Daily is also reporting that BI software will be among the top growth IT performers as the big guns like Microsoft and Oracle roll out lower-cost, high-performance and easy-to-use systems that take BI businesswide and operational — not just strategic and finance-based. CRM Daily reports that both companies are on a course to make BI “as embedded and universal as their already dominant databases, onto which new BI functionality has been grafted.”

The one unfortunate aspect of BI functionality is that it has the reputation for not exactly being the most user-friendly tool in the world, perhaps the main reason why Microsoft and Oracle are scrambling to create friendlier software. This Information Week piece hits upon the same notion:

Many business-intelligence tools are complex and difficult to use, and that’s been a tough hurdle to overcome as companies try to deploy them more widely to managers and information workers. Generally, most business-intelligence software is used either by analysts with programming experience or IT programmers who develop pre-formatted reports for users. For several years, business-intelligence tools have been steadily making their products friendlier…

Auto parts maker Dana Corporation seems to have a friendly BI tool on its side . Based in Toledo, Ohio, Dana Corporation designs and manufacturers automotive parts for every major vehicle producer in the world. With 46,000 people in 28 countries — and reported revenues of $9.1 billion in 2004 — keeping track of critical company data is no small task for Dana’s management team and other employees. That’s why the automotive systems group at Dana uses BI to track engineering information by analyzing charts and graphs on how specific projects are progressing. In addition, Dana’s finance intelligence team tracks performance of the company’s manufacturing plants across the globe — including statistics on whether the plants’ employees are being used to their full potential. The company recently completed a project that’s tracking new business so that an officer can see new business that is coming five to 10 years down the road.

But perhaps the power of BI is best summed up by Mike Costa, senior director for information systems, Dow Chemical:
“…we gained the ability to proactively manage changes in business conditions allowing us to easily spot industry trends.”

Is your company using, or planning to use, BI tools to sense and respond to industry trends?