The BIG Blog

4 Key Questions About Business Intelligence

Sometimes, in amongst all the hype and confusion of new technologies it pays to revisit the basic questions…..in this case we are looking at business intelligence [BI]….

What is BI?

• Why do I need BI?
• What BI tools do I need for what purpose?
• How do I select a BI solution?
• What is the best way to implement BI?

I will answer each of these questions in following blogs

What is BI?

Business intelligence is a capability, supported by a software suite that provides insight into your business and its operating environment to support more productive and more profitable decisions. It helps to filter out personal biases and irrelevant past experiences to isolate the most meaningful data that relates directly to the decisions you need to make for today and the future of your business. BI differs from standard reporting in that reporting adopts an historical perspective to show what has happened in the past. It does not tell you why it happened, or whether it may happen in the same way again in the future.

Why do I need BI?

A business is designed to move forward, not backward. Using backward facing information to drive a forward facing business doesn’t make sense and can lead to massive mistakes through incorrect assumptions, and decisions made for political rather than logical reasons.

BI removes human frailty from decision making as much as possible, allowing for evidence-based decisions to drive your business. This alone helps to cleanse your business of personal ego patching, destructive hierarchical power-plays and overzealous enthusiasm driving you into activities that do not support your productivity and profitability goals.

BI significantly reduces decision risk and helps you streamline both your operational and marketing activities to those that produce the most value for the least resources expended.

Virtualized Data and Automated Discovery

In an IT world that is rapidly becoming virtualized at the hardware and software levels it is not too much of a stretch to envision virtualization at the data level – easy to dream about, not so difficult to create, or is it?

As businesses continue to struggle to capture, clean and transform their data into a format best suited to BI tools, the adoption of BI in critical decision making is stalled.

BI visualization tools are being increasingly integrated directly to applications, relational databases and cubes, using web services and SOA, with innovations such as columnar databases are promising to overcome the format and power constraints that are holding BI adoption at sub par levels.

Virtualized data would abstract the data from its source silo structure, and instead present as a consumable entity regardless of ETTL processes it may have to pass through to become usable to the end BI tool. This abstraction supports the concept of automated discovery, where data from any source, in any format is consumable by BI applications.

With over 80 percent of information relevant to daily business decisions now unstructured, such advances in data management innovation are critical to overcoming current constraints. Omniture, Web analytics vendor are about to release a product to monitor API traffic on the Web, and a lot of keyword tracking to measure application traffic and consumption patterns. This would, for example, allow online retailers determine the best page layouts to sell more products. This comparative intelligence can be fed into BI analytic or visualization tools to add to customer profiling data.

SAP’s Business Objects Explorer also tracks end user activity across related topics at one location and aggregates it with related data feeds. Explorer is data feed agnostic – leaning towards the type of abstraction that defines virtualization. Information may be drawn from text, voice, video, transaction data or anything else as a mashup of structured and unstructured content with mapping providing contextual relevance.

No amount of ‘intuitive interface’ design will match human capability, but a lot can happen behind the scenes that surpasses the ability of humans to correlate relationships between massive volumes of data in very short time intervals. This contextual mapping has advanced far beyond the traditional integration of data warehousing and is heralding another major leap in BI infrastructure capability.

Overcoming Common BI Program Mistakes

The business environment is a complex interplay of internal and external forces that must be supported by agile, efficient and compliant technology. Business intelligence technology is the most affected capability by under-performing IT infrastructure and stagnant, poor quality information.

In an attempt to provide a quick fix to an organizations business intelligence needs, common errors come into play that not only prevent the speedy solution, but can plague a more robust BI program implementation.

The most common BI Program mistakes largely involve incorrect assumptions: Read the rest…

BI Cited ‘Top Technology’ for 2009

The latest Gartner 2009 CIO Agenda survey of 1500 CIO’s has revealed some surprising and not so surprising results.

Firstly, the not so surprising is that BI has been voted as the top technology for 2009, after all BI has held this spot since 2006.  What is surprising is that the focus is not on analytics – the survey indicated that the top CIO business expectation was in improving business processes. This surprised me, as many companies have supposedly already been through this era – or maybe is just wasn’t done well enough. The other inference I have made is that BI is now focusing on the operational value it contributes – what we refer to as OBI.

The rankings of exectations and technologies are:

Expectations

1. Reducing enterprise costs
2. Improving enterprise workforce effectiveness
3. Attracting and retaining new customers [#2 in 2008]
4. Creating new products or services [#3 in 2008], however innovation is forecast to move up the ladder to top spot by 2012.

 IT Strategies

1. Tighter link between business and IT strategies
2. Reducing the cost of IT [#10 in 2008]
3. Delivering projects that enable growth
4. Attracting, developing and retaining IT personnel

 Technologies

1. Business intelligence [BI] [ since 2006]
2. Enterprise applications such as CRM or ERP
3. Servers and storage technologies.

 The survey results overall are not surprising. As the current market is hardly conducive to growth strategies for most businesses, it is an ideal time to refocus on core business and get better at the basics. BI is known for its ability to improve productivity whilst reducing costs. We can not overlook the past carnage of poorly implemented BI projects and tools that were too difficult for most business users to integrate into their daily operations. However, in the past two years this scenario has changed signficiantly, with tools much more business oriented and the knowledge base of implementation best practice taking learnings from the past and crafting far better BI program practices of today. The other missing link I will personally add is the level of education the business receives, not in using BI but in why they should be using it, and exactly how it improves a business from single user self performance management all the way up to the boardroom strategy.

Virtualisation, cloud computing and software-as-a-service [SaaS] are also acknowledged as cost reducing strategies but many IT managers are still cautious around availability, security, and a full functional fit. Such technologies are gaining favor with mid to small enterprises that may not have the full IT capabilities of larger corporates.

Overall,  although BI is voted the top technology for 2009, the ‘killer app’ is ‘Leadership’. Companies don’t want consultants giving them a set of options – they want strong leadership paths to drive their businesses through the current downturn and still come out having advanced in some way. It may not be with customer growth and revenue growth, but I expect we will see leaner and meaner businesses forging ahead with renewed vigor and tighter focus.

Survey base: N=1500 CIOs worldwide, Duration= 3 months to Dec 15, 2008. Average company size = 400, average IT budget = $90 million.

Businesses Must Face Reality or Lose Prosperity

I thought the following extract from a speech given by USA president elect Barak Obama was interesting in its parallel to the adoption of new ways of thinking and making decisions in business:

“It’s time, once again, we put science at the top of our agenda” …. “The truth is that promoting science isn’t just about providing resources it’s about protecting free and open inquiry and it’s about ensuring that facts and evidence are never twisted or obscured by politics or ideology. It’s about listening to what our scientists have to say even when it’s inconvenient. Especially when it’s inconvenient. Because the highest purpose of science is the search for knowledge, truth and a better understanding of the world around us. That will be my goal as President of the United States.”

It is these very principles – seeking knowledge to gain a better understanding of our customers and their worlds, as well as new ways of doing business and new product technology that drives my passion for business intelligence. BI is about breaking down the barriers of protective egos, outdated or incorrect assumptions and releasing the reality of past performance and future presight so that we may avoid the comfort of our own delusions.

This environment is very uncomfortable for many, as is change in general. But inspite of the inconvenience of change, and the discomfort of the truth, this is the new way forward for businesses. It is one of the most power releasing business capabilities that has been introduced since the adoption of the Internet. Can you imagine doing business today without email, without access to the vast knowledge of the web, without broadband….and all the other everyday business conveniences we now take for granted. Yet there are still many senior business people lacking in www search skills, who cannot type at a reasonable speed, who resist using software of any kind – because learning how to master these tools is both inconvenient and uncomfortable. Accepting that some of these skills are not required as much at C-level, there is little room in business today for such individuals who resist business evolution. Such mentality is largely responsible for wiping 486/500 businesses from the Fortune 500 over the past 35 years.

BI Drives Improved Sales Integrity

There are those who believe that business intelligence driven selling and marketing is leading towards a more depersonalised style of selling – yet in reality, the opposite is true.

The old mode of selling was very much a tactical pipeline of script speak designed to lead a prospect into firstly feeling discomfort with the status quo, framing up a mental solution, aligning that solution to a product the sales person wishes to sell, overcoming objections and closing the sale. The script was very much crafted around raising the needs that directly aligned with the solution proffered, rather than the real needs of the client.

Business intelligence provides evidence of actual needs of the client, often before the client actually recognises that need themselves. It then provides a basis of configuring customised solutions for individuals, rather than whole market sectors. In this way, BI technology provides a more interactive and collaborative style of selling focused on the customer, rather than the product.

This is more in line with the current market values of participation and collaboration, rather than the more confrontational modes of selling used in the past. BI provides revolutionary insight into the lifestyles and buying habits of individual customers. It helps businesses integrate into the customers’ mode, rather than expecting the customer to align with the business mode.

The outcome of this change of focus from the solution to the customer provides far more value to the customer than ever before. And that increases personalisation rather than depersonalises the sales process.

Real Learnings From Real BI Implementations

There is a lot written on best in class practices for deploying BI in operational business intelligence projects. For some real world examples with more specifics on ‘How To’, this post on CIO.com India offers insights from several companies.

Two key requirements in most projects focus on moving data closer to the business and monitoring all data though a single system. However, in reality most projects have found that processes don’t fit neatly into single systems.

Data is still consolidated into a single data warehouse where formats can be transformed and analytic rules applied. For example, time-critical information such as production data is gathered more frequently and often supplemented with other types of operational data, however rather than using the data warehouse as the platform for real-time data analysis discrete software tools are used to analyze transactional data.

Attempting real time analyses typically requires a big infrastructure upgrade that may not be economically justified in many companies. Not all processes — or even most — need to be monitored in real-time. Latency schedules should not be driven from the data availability end, but rather from the information consumption perspective. Most businesses struggle to conume information on more than a daily basis. Unless the data relates to mission critical transactions, real time is not required.

Selecting the right kind of data for real-time analysis, is based around what information provides insight into completion rate baselines. Data providing insight into how customers are using products or how to optimize business processes is not always required in real time.

The Great BI Debate

I just finished commenting on a rollicking debate about BI – The Great Debate: Business Intelligence but suggest you click over to read all the comments, as they covered off many of the reasons that I wrote The Logical Organization.

I congratulate all on a great debate. All contributors made valid points, albeit from different perspectives. As a corporate performance consultant for 20 years I have developed an in-depth understand of technology and am often charged with vendor selection.

I acknowledge Nigel’s statement that we all agree that “when it is implemented well, business intelligence technology can and does stimulate better management and innovation”. I also agree that more focus needs to be on “how technology solves business issues” rather than how well the IO can manage queries. Nigel caps the major challenge that most BI vendors and business managers don’t recognise – “not enough businesspeople understand what the technology can do”. It’s very much a matter of they don’t know what they don’t know!

BI impacts processes and decision making in often revolutionary ways for many businesses. This aspect is rarely highlighted in BI vendor marketing presentations. They talk about better decision making – but do not state why or how. Having better data is not the answer. Using better data and embedding that use in every day processes is how decisions will become data driven.

I agree with Nigel that BI has been IT-led. This has largely been by necessity. Executives today that sign off on technology investments don’t have the time or desire to understand how technology works. But in failing to do so, they fail to recognise the significant value BI can have in the organization.

BI and performance management matter in ANY size company and decision making must be supported by facts, not individual recollections of what happened last time we tried that.

I don’t read that Nigel suggests that BI is not suited to SME, rather he rightly emphases the real truth that all business owners and managers [not just SME] “must make the effort to learn how they can adapt the available BI tools to their business needs”

Tony adds to this dilemma by pointing out one possible reason for this – that many BI vendors fall short in communicating the value of BI tools to the business – they tend to concentrate on regaling the many benefits of the BI features in terms of how they easily fit into the IT infrastructure and the performance power of the engines – Business people don’t give a hoot about any of this. They want to know only three things – how it makes me more money, how it saves me money, and how it will keep me out of jail!

As Paul says “Managers across all organisations of ALL sizes have the identical issues” But in saying this, business managers need to take more responsibility about IT as a critical business capability and get more savvy and knowledgeable about business technology in general. If they don’t understand how BI technology works – how can one expect them to trust and rely upon it to support their most pressing business decisions. They won’t do this if BI is seen as part of BI. I advocate BI as a separate function that provides capability across the business – just as IT or finance support aspects of all functions. In this way it provides a strategic and operational bridge between IT and the business. The more BI gets ‘operationized’ the more its value is released.

As Bob states one of the prime reasons that so many businesses “go to the wall each year is due to the lack of financial information”. But I would add that its not just financial information that is needed – but market information and operational performance information. Too much emphasis is given to financial reporting – when it is purely an outcome of good decisions around product development, marketing, supply chain, manufacturing etc etc. The closer to the source of the driver of performance the information can be monitored – the more likely any damaging flow on effect can be contained.

I got so frustrated by all these issues that I decided to do something to help resolve these problems so have recently published a comprehensive guide [“The Logical Organization”] covering all these important points – what BI does and what business managers need to know about the technology, but written in a way they understand. BI is about executing business strategy, business ownership of data as a valued asset, data quality governance, business process automation, evidence based decision making, personal performance management, effective planning and governance – and a whole raft of business competencies. Collectively, we all need to include more about these items in our communications about BI and move away from the tech speak that scares most managers away, and sends the rest to sleep.

It’s not about technology – it’s about accepting that the operational framework businesses need today is vastly different from 10-15 years ago and that BI needs to be integrated [using BI technology] at every critical point of performance. And that applies to any function, in any business [small – medium and large], and in any industry.

The Logic Evangelist