ABCs of Business Intelligence
Thursday, January 11th, 2007
Here are several excerpts from an excellent overview on Business Intelligence by Ryan Mulcahy, ABCs of Business Intelligence:
What is business intelligence?
Business intelligence, or BI, is an umbrella term that refers to a variety of software applications used to analyze an organization’s raw data. BI as a discipline is made up of several related activities, including data mining, online analytical processing, querying and reporting.
Companies use BI to improve decision making, cut costs and identify new business opportunities. BI is more than just corporate reporting and more than a set of tools to coax data out of enterprise systems. CIOs use BI to identify inefficient business processes that are ripe for re-engineering.
With today’s BI tools, business folks can jump in and start analyzing data themselves, rather than wait for IT to run complex reports. This democratization of information access helps users back up—with hard numbers—business decisions that would otherwise be based only on gut feelings and anecdotes.
Although BI holds great promise, implementations can be dogged by technical and cultural challenges. Executives have to ensure that the data feeding BI applications is clean and consistent so that users trust it.
Who should lead the way?
Sharing is vital to the success of BI projects, because everyone involved in the process must have full access to information to be able to change the ways that they work. BI projects should start with top executives, but the next group of users should be salespeople. Because their job is to increase sales and because they’re often compensated on their ability to do so, they’ll be more likely to embrace any tool that will help them do just that—provided, of course, the tool is easy to use and they trust the information.
With the help of BI systems, employees modify their individual and team work practices, which leads to improved performance among the sales teams. When sales executives see a big difference in performance from one team to another, they work to bring the laggard teams up to the level of the leaders.
Once you get salespeople on board, you can use them to help get the rest of your organization on the BI bandwagon. They’ll serve as evangelists, gushing about the power of the tools and how BI is improving their lives.
How should I implement a BI system?
When charting a course for BI, companies should first analyze the way they make decisions and consider the information that executives need to facilitate more confident and more rapid decision-making, as well as how they'd like that information presented to them (for example, as a report, a chart, online, hard copy). Discussions of decision making will drive what information companies need to collect, analyze and publish in their BI systems.
Like so many technology projects, BI won’t yield returns if users feel threatened by, or are skeptical of, the technology and refuse to use it as a result. And when it comes to something like BI, which, when implemented strategically, ought to fundamentally change how companies operate and how people make decisions, CIOs need to be extra attentive to users' feelings.
Seven steps to rolling out BI systems:
1. Make sure your data is clean.
2. Train users effectively.
3. Deploy quickly, then adjust as you go. Don't spend a huge amount of time up front developing the "perfect" reports because needs will evolve as the business evolves. Deliver reports that provide the most value quickly, and then tweak them.
4. Take an integrated approach to building your data warehouse from the beginning. Make sure you're not locking yourself into an unworkable data strategy further down the road.
5. Define ROI clearly before you start. Outline the specific benefits you expect to achieve, then do a reality check every quarter or six months.
6. Focus on business objectives.
7. Don't buy business intelligence software because you think you need it. Deploy BI with the idea that there are numbers out there that you need to find, and know roughly where they might be.
More tips for getting BI right
- Analyze how executives make decisions.
- Consider what information executives need in order to facilitate quick, accurate decisions.
- Pay attention to data quality.
- Devise performance metrics that are most relevant to the business.
- Provide the context that influences performance metrics.
And remember, BI is about more than decision support. Due to improvements in the technology and the way CIOs are implementing it, BI now has the potential to transform organizations. CIOs who successfully use BI to improve business processes contribute to their organizations in more far-reaching ways than by implementing basic reporting tools.
For much more on this subject, be sure to check out this comprehensive article on Business Intelligence.
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