SAP Scoops Up Business Objects

SAP (Walldorf, Germany) has announced that it intends to purchase Business Objects (Paris) for $6.78 billion. The deal is meant to enhance SAP's existing business software, including a full suite of banking solutions, with Business Objects' business intelligence capabilities.Bernard Liautaud, founder and chairman of Business Objects, echoes the goal in the release announcing the acquisition. "The combination of Business Objects and SAP means that we can truly amplify the reach of business intelligence - from the C-suite to Main Street," he said.

This new move highlights the ever-increasing importance of business intelligence in a company's IT toolbox. Most of the major software providers, including Microsoft, Hewlett Packard, IBM and Oracle, have already gobbled up or partnered with existing business intelligence providers.

Take a look at this quote from Gartner analyst Andreas Bitterer on CNNMoney.com. "The business-intelligence space is undergoing massive changes. Oracle's acquisition of Hyperion was the first domino to fall. SAP's deal with Business Objects is the second one. Now the question is, which will be the next domino to fall?"

And I wrote the following statement in my August 2006 article on business intelligence:

All the arrows point to the increasing priority placed on BI by financial services firms. As companies seek to enhance their decision-making capabilities for everything from underwriting to cross-selling to risk management, investment in BI-related technology is on the rise in banking -- according to TowerGroup (Needham, Mass.), spending on BI will reach $16 billion to $17 billion in 2006.

I recently became better acquainted with the need for - and the challenges of - business intelligence at financial institutions. At Bank System & Technology's recent Executive Summit in Phoenix, I moderated a roundtable discussion on "The Next Generation of Business Intelligence." Eight banking executives, from banks with more than a trillion in assets, down to those with about $10 billion discussed the key issues, opportunities and challenges presented by business intelligence. It was a great opportunity to see competitors offering advice to each other and commiserating on common obstacles.

According to the participants, the key challenge for banks in implementing business intelligence is developing a business case that demonstrates real value in order to get buy in from the lines of business and top executives. Also, the availability of information, integration of data, ever-changing regulations and competing projects all stand to obstruct business intelligence implementation.

"Most things fail unless they are top-down supported," said one participant.

Another problem comes from the vendors. "Vendors sell what they can do, not what you need," said on participant.

Despite the challenges, the bank representatives agreed that business intelligence is something that cannot be ignored.

"You can't be afraid to fail," said one participant. And a lot of banks have failed, said another. "The data warehouse nightmare stories are out there," he said.

However scary it may be, business intelligence is something that will become necessary for banks to remain competitive in the future. "What kind of organization will we all be in five years without this?" one participant asked the group. "How will we survive without this?"SAP (Walldorf, Germany) has announced that it intends to purchase Business Objects (Paris) for $6.78 billion. The deal is meant to enhance SAP's existing business software, including a full suite of banking solutions, with Business Objects' business intelligence capabilities.