The premise that business intelligence (BI) alone can deliver better business decisions is a flawed one, and has done a lot of damage to the sector, says BI expert Bill Hoggarth.
Hoggarth, CEO of new BI firm Dataways, says investment in BI cannot be justified by saying it will enable better business decisions, because this is not the case.
"Too many vendors and marketing departments have given the impression that BI can enable business decisions, and that business decisions are the only endpoint of a BI investment. This has done massive damage to the BI industry," he says.
Hoggarth says BI is, quite simply, information. "Better information is not the single biggest driver of business decisions," he says. "In the real world, strategic business decisions are made based on a wide range of factors - including organisational culture, remuneration, the political environment and what competitors are doing. Information is far down on the list of factors impacting on strategic business decision-making; and information coming from BI is far down on the list of these information sources.
"In fact, many strategic business decisions are taken directly contrary to what the available information says they should do," Hoggarth says.
Hoggarth says BI needs to be seen as a valuable information resource, but not one purely for strategic business decisions. It has great value in powering operational decisions, however.
"There are many different types of business decisions," Hoggarth points out. "Some are best automated according to business rules - like in the case of a bank accepting a credit card transaction. BI can inform these operational decisions, but as you move up to more tactical decisions, such as how to price a new product or which unhappy customer to deal with first, BI plays less of a role. And finally, you have strategic decisions. The role of BI gets less important the higher you move up the chain. This is one reason why the business case for BI flounders when it comes to CEOs authorising a BI investment.
"The BI sector has long wondered why hundreds of millions is spent on ERP, and only tens of millions is spent on BI," Hoggarth says.
Hoggarth feels that, as a new age of BI dawns, some of the objections to investment in BI are starting to disappear.
"New BI tools are user-driven, faster, more agile and manage big data. They are becoming more usable and available to mobile devices. This makes them increasingly useful as sources of information. But they still deliver information - not decisions," he says.
"BI vendors and professionals ought to start recognising that there is immense value in being informed, and stop expecting BI to deliver what it cannot," he says.
Bill Hoggarth will speak at the ITWeb BI Summit, from 26 to 28 February 2013, at The Forum in Bryanston. For more information about this event, click here.
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