What is Business Intelligence?
Business Intelligence is about getting the right information to the right people at the right time to enable greater efficiency and improved decision making, ultimately translating into competitive advantage.
Coined in the 1950s by an IBM researcher, Business Intelligence has become an umbrella term encompassing applications, infrastructure, tools and best practice.
BI or BS?
Many seasoned business leaders will say this is what they have successfully done for decades. The terminology may differ but the reality is the same: management accounting; performance measurement; balanced score-card; dash-board metrics.
The difference in today’s information driven world is essentially one of volume. The vast accumulation of data can be a huge asset – but it can also hide the really important trends and information contained within it.
So the need to translate data into meaningful information is hard to dispute but the hyperbole of some of the software solutions providers can be tiresome. Their dream is a fully integrated enterprise system with centralised data warehouse and powerful analytical and reporting tools capable of distributing real time reports to the mobile devices of roaming executives. Watch out! That sounds like a 5 year project by which time you may be monitoring the wrong data and your technology solution may be obsolete.
BI becomes a core module of many ERP systems from providers such as IBM, SAP, Microsoft and Oracle.
Keeping Business Intelligence Simple
By all means make Business Intelligence part of your enterprise architecture but be pragmatic about the applications you invest in. Make sure that data is never collected without a reason. Focus on your business objectives.
Keeping BI simple does not necessarily mean keeping it small. Some of the most impressive applications around relate to transactional oriented organisations which can gather well defined quantitative data from every customer interaction. Businesses such as Tesco not only have precise re-stocking data, they understand how customers will respond to price changes and other promotions by both themselves and competition.
Business Intelligence is not just for large scale enterprises. Many small businesses also have access to growing amounts of data and their success depends on using it more intelligently than their rivals. Imaginative use of pivot tables and other spread sheet tools may be all that is required to harness the data.
Avoiding the BI Pitfalls
Senior Management Commitment
As with most major projects this is a key issue. User resistance can be a huge barrier to success where there is lack of clarity as to why data is being gathered and where there is no conviction that it will ultimately be used in a positive manner.
The old adage “garbage in, garbage out” rules for Business Intelligence. Too often companies start to fill their shiny new Data Warehouse with inconsistent and poorly structured data. Attempts to derive valuable forecasts and guidance will be undermined.
Try to be Agile
Data Warehouses, “Big Data” and Enterprise Systems are by their nature rather less than truly agile. However, successful users of BI don’t freeze their system. Let it grow incrementally. Be prepared to modify and improve reports as circumstances change. Be willing to ditch data which does not add value. Don’t let technology win out over functionality.
Many initiatives founder because they are over ambitious. In spite of the advances in computing power it is still very difficult to effectively store, process and analyse unstructured or semi-structured data which might be in the form of emails, chats, image files etc. And it is always tempting to include a little bit more data; but the returns diminish and ultimately it will become a case of paralysis through analysis.
Much of the data handled is sensitive. It may include personal information. It may be highly valuable to competitors. As soon as such data is in a format where it can be easily interrogated then it becomes more vulnerable to abuse unless careful safeguards are applied.
Making the Most of Your BI Investment
You have invested in BI capability – maybe as part of a broader systems upgrade or ERP roll-out. You need to ensure that both your technical team and your users understand how to make the most of the tools available.
A variety of Business Intelligence training courses are available. They are aligned with the most popular software solutions provided by Microsoft, Oracle, IBM and SAP.