Resellers looking for a high value, high margin technology to improve their customers' businesses would be advised to look at business intelligence (BI).
The field is booming, customers are hungry for advice and products, and there are opportunities for fruitful innovation.
Just take a look at the rapid growth of four-year-old consultancy C3 Business Solutions, run by Conrad Bates and Cameron Wall.
Bates and Wall have worked together since they started out at PriceWaterhouseCoopers in the late 90s. Their division was bought out by IBM in 2004 and they were made associate partners in IBM Global Business Services.
Their focus was business intelligence, with Bates running strategy and Wall in charge of the delivery practice.
They left to start their own company two years later. "We decided that we could deliver the same or better service for a much lower price," says Bates.
C3 was born in 2006 and started trading the following year. The pair carved out a niche in the areas in which they were employed by IBM; business intelligence, data warehousing and information management.
The C3 model was similar to their IBM roles but slightly different, says Bates. C3 carries four service lines; strategy, program and project management, design and architecture, and business change management.
Some consultants install business intelligence without addressing the efficient and effective use of the new system, sometimes because it is not easy to use. The systems built by C3 are optional, in that decision makers choose to use the system to improve their decision making rather than being forced to use the system to do things like raise an invoice.
Change management is a missing piece to many business intelligence projects whose ultimate objective is to build a decision support system, says Bates. "The challenge with BI solutions is that people can choose not to interact with them to make a decision. There's a real challenge in the industry with BI specifically in that area."
In just over three years of operation the reseller has grown rapidly to the point where it has service line leaders and practices in all four lines. Over 40 staff work in the Melbourne, Canberra and Sydney offices.
Employees have been added at roughly one a month for the first 36 months. "We have focused on quality organic growth," says Bates. The company was named in the latest BRW Fast Starters business list.
The bulk of the organisation is focused on delivery, which covers the latter three services. However, strategy is an important element because it involves more senior staff and carries the most influence with customers.
"We do a lot of public sector and private sector work. I had the deputy secretary of one of the largest federal departments ring me up and ask me to come and do a review. We do quite senior advisory work in this area," says Bates.
Its biggest customers include the federal Department of Health, utility Truenergy, and other blue chip corporations in financial services, utilities and energy, as well as state and federal government.
The rise of mid-market BI
C3 is riding a change in the market as business intelligence vendors lower their sights from enterprise to midmarket. A lot of top products have recently introduced SMB offerings, including SAP's Business Objects and IBM's Cognos, says Bates. Prices that were once in the hundreds of thousands of dollars have dropped to tens of thousands - a response to saturation in the enterprise market and a scramble for market share in the midmarket.
Another trend is cloud computing. A number of small cloud-based BI vendors have sprung up to attack the SMB market from the other side. C3 is investing heavily in this direction, too.
The consultancy turned software vendor after it decided to launch a data collection platform called C3 Integrity which allows businesses to collect information remotely through the web.
The platform lets a company collect data from outside organisations by setting up rules that enforce the quality of data at the moment of submission. This cuts back the usual process of collecting data from several sources, reviewing it for errors and contacting the original sources for the correct data.
"We saw this gap in the market a couple of years ago and we went to Innovation Australia and said we need to do some R&D in this area," says Wall. They got the go-ahead and a year and a half ago launched a product for testing with clients.
"One of the biggest challenges in BI is data quality," says Bates. Integrity lets an analyst set up rules for submitting data and the program then screens all incoming information to check that it conforms with the rules. The result is that the user is unable to enter incorrect data."
C3 is selling its data collection platform to customers who were previously achieving similar results manually. The public sector has been very interested in how they can distribute data collection mechanisms to collect data from sources external to their environments so they can make policy decisions on it, says Bates.
Bates gives the example of a project with the Department of Health and Ageing which has a duty to monitor management of 2500 aged care homes around the country. The department wanted to collect service activity information such as the number of Meals on Wheels delivered.
Under the manual process, the aged-care homes had to email in their data or burn it to a CD and drop it into a post office box. The department would cross-match the spreadsheet against the organisation which contributed it and identify business rule violations. A month later the department would post back the data for corrections and then after a protracted email exchange it would end up with a "half-decent" data set that could produce reports from which to make a decision.
The whole process could take up to three months.
"We've cut that cycle time dramatically. There really is nothing on the market that is doing this at the moment," says Bates. "It's not only a faster process but it puts the onus back on the person who is contributing the data to upload and make sure it's good quality data."
From reseller to vendor
Although C3 Integrity includes a machine-to-machine interface Bates says it is complementary to rather than competitive with IBM's InfoSphere DataStage and cloud vendor Informatica.
In fact, IBM recently carried out a co-marketing campaign with the consultancy which has opened up a broader range of customers. "We are slowly getting some recognition in the market. The last client actually came to us," says Bates.
Wall and Bates are dubious about the uptake of cloud services by their government and corporate customers. People are still sceptical about security and privacy when it comes to cloud, says Wall.
Even the on-premise version of Integrity can be a battle to install, adds Bates. Some government departments have been very reluctant to open a port on their website to allow external organisations to send data to the Integrity platform. Despite reassurances of security techniques such as reverse proxy, detailed security solutions and audit trails, government executives feel they are "opening their kimono", says Bates.
"So I don't think that a large corporate or public sector client is going to the cloud any time soon when they have trouble even installing this software on their own server and provisioning it out to their own clients," says Bates.
C3 has a packaged version of Integrity that is built for carbon emissions compliance reporting. The software targets the top 100 companies in Australia which were legislated in 2007 to fill out annual statements on their emissions.
"That emissions data is some guy recording a smokestack for BHP in mining sites all around the country," says Bates. "There's an example where there are lots of spreadsheets of data around emissions by facility, by asset, by organisational structure, that has to be recorded and collated and audited and aggregated within a company and presented back to the Department of Climate Change."
The obvious market for carbon emissions measurement software is in Europe where companies have operated with a version of the Australian government's stalled Carbon Pollution Reduction Scheme for over five years.
Bates says he recently briefed a Gartner analyst from the UK on the carbon analytics package. The analyst told him that 60-70 percent of the UK market was still running its emissions data collection and reporting on Microsoft Excel. "They spend a lot of money on auditors auditing all those Excel docs for reporting," says Wall.
"The first question he said to me was, when are you bringing it to the UK?" says Bates. The consultancy is working on channel partnerships at the moment and says it is close to signing its first three resellers, all in different geographies. Wall and Bates are setting up the infrastructure that will support resellers; support, provisioning, downloadable trial software and an e-commerce transactional engine.
"We're getting a lot of work. We just need to make sure we balance the workload with the quality of resourcing that we have a reputation for delivering to our clients. That's always the challenge with these things," says Bates.
Photo: From left to right Conrad Bates and Cameron Wall
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