Issue 43, November 2006
Client Reporting and Business Intelligence Tools
Client reporting and business intelligence (BI) tools continue to evolve to meet the rapidly growing demands for increased information access and high-end reporting. Before we address this rapid evolution, however, some definitions are in order.
As the term implies, client reporting tools focus on the production of high quality, pixel-perfect reports, combining data with commentary and graphics. Most solutions accomplish this task well. These tools typically have limited capabilities for gathering, vetting, and storing required data. Instead, they rely on data warehouses or similar repositories. They also tend to be limited in ad-hoc capabilities and in the management of report production. Client reporting tools used by investment managers typically have been created for providing hard copy reports on a periodic basis. Sample client reporting tools are PAGES and FundWorks.
BI tools, on the other hand, have a larger focus - the overall management, analysis, and presentation of data. They have strong capabilities in areas where client reporting tool are weak, including data gathering and real-time delivery of data. Unlike client reporting tools, BI tools can reach out and extract the data they require. Most BI tools are sold across a wide range of industries, not just investment management. Examples of BI tools are Cognos and Business Objects.
The following chart provides a comparison of the typical functionality of these tools:
As a general rule, consider a client reporting system if your sole requirement is producing client reports. If, instead, you have a broad focus of data management and presentation in a variety of formats, then consider a BI tool. Please note, however, that BI tools tend to be more expensive than client reporting tools, and BI tools typically take a longer time to install. Regardless of the type of tool you acquire, the purchase should turn out to be a good investment - firms that have acquired client reporting tools or BI tools have consistently seen large gains in control, reduced time to report production, and much lower costs.
As noted above, these tools are evolving rapidly. Client reporting tools are becoming more tightly integrated with report generation tools such as Business Objects and Actuate. They are also concentrating more on workflow and data management, attempting to catch up with the BI tools in these areas. These systems, however, remain undifferentiated, with little or no separation of functionality among user roles and with no tiering of processes - all levels of the applications require substantial knowledge of the data and an understanding of client requirements.
BI tools are now offering new capabilities to support browser-based, pre-formatted, high-volume reporting for self-service visual dashboards and for analysis. They also provide easy to use, web-based report writers, allowing end users to create their own reports and taking the burden of report customization from IT staff. BI vendors are adding newer methods of accessing and storing data, including time series databases, OLAP cubes, XML feeds, and access through SOA.
However, BI tools are experiencing pressure from several fronts. Database providers (such as Oracle and Microsoft) and application vendors (such as SAP) are moving into the market for BI tools by including reporting tools (often from vendors they have acquired) in their products. New and more agile BI tool vendors (such as Qliktech) provide innovative technologies and lower prices. In addition, open source solutions for databases and reporting are becoming more attractive.
We recommend that any investment management firm unhappy with its current client reporting capabilities consider acquiring a client reporting system, or, if the need is more broad, a BI tool. There are many good choices on the market today.
Note: This issue of the Cutter AdvantEdge provides a few highlights from our extensive research into client reporting and business intelligence tools. In this research, we interviewed more than 40 large investment management firms and performed detailed reviews of 20 client reporting and BI vendors. These reviews included an RFI, detailed demonstrations, and due diligence interviews of current users of each product. We will provide our full findings at the next meetings of The Technology Council - November 15 in London and November 29 in New York.