In last month's Industry Insight, my colleague, Cor Winckler, discussed how the technical correctness of business intelligence (BI) can be measured by applying BI to the technical BI data.
In this month's Industry Insight, I would like to elaborate on this, by illustrating how the degree of alignment of BI to the organisation's strategic objectives can be measured by applying BI to the BI.
A BI capability is one of the most critical IT resources that an organisation possesses. If the BI competency is not implemented correctly and not well managed, it can turn into an exorbitant operational expense, producing very little value to the business. However, on the flip side of the coin, a well-managed BI capability implies that it should also be measured.
To do this, however, three components become necessary: alignment, understanding and mapping the two together.
Align BI with company goals, objectives
The only way to obtain usable and sustainable information from a BI solution is if the solution supports the business strategy. Information is only useful if it increases revenue, reduces cost or improves business performance - all helping to run the business effectively. The first step to achieving this valuable information is to align every BI initiative with the company's strategic goals and objectives.
The most practical way of doing this is to create a cross-reference list between the organisation's strategic objectives and the current BI initiatives. For each intersection of a strategic objective with a BI initiative, indicate the percentage that the BI initiative supports the given business objective's informational requirement on operational, tactical and strategic levels. Adding the percentages per strategic business objective together gives a good indication of the extent to which that objective's informational requirements are covered. If particular business objectives (or sets of objectives) have low coverage percentages, it indicates where the BI initiatives are badly aligned or where some serious shortcomings fall within the BI programme.
The real measures of value of the respective BI initiatives will come from the actual usage statistics. The number of users, their relative positions in the organisation and their actual usage (number of accesses, amount of data extracted and reported) will give the real value of the information.
Understand current, potential employment of BI
Information is only useful if it increases revenue, reduces cost or improves business performance - all helping to run the business effectively.
Martin Rennhackkamp is COO of PBT.
The second key is to understand how the company currently employs BI technologies. It is essential for companies to determine how they can employ BI technologies to align BI initiatives with their specific corporate strategic goals and how the current tools, technologies, applications and information architecture should be adapted to support this alignment. It's all about getting the right information to the right people - when they need it.
A practical way to start this exercise consists of taking the following questions to the executives heading up the major initiatives in the organisation related to the organisation's strategic corporate goals:
* What percentage of the informational requirements for each initiative is obtained from the BI competency centre?
* To what extent does this information satisfy the reporting and management requirements to drive this initiative?
* What other information is required to manage and monitor this initiative, which is currently either not obtained or alternatively, obtained through cumbersome manual processes?
Examine BI in critical business processes
The third process is to examine critical business processes to determine whether those processes improve the alignment of BI with the organisation's strategic objectives. It is crucial that the company's processes provide the correct data and make intelligent use of the provided information. At the end of the day, if you drop into data warehousing detail for a second, each fact table in the data warehouse should represent a single business process, from where it can be reported on in the finest level of detail and analysed from all the applicable business angles.
Badly covered key business processes and gaps in the information requirements obviously indicate BI initiatives that are not properly aligned with the business. The converse of this step should also be applied. Every key business process should be analysed to determine how BI can be used to assist the personnel responsible for that process, regardless of their level in the organisation. This could be implemented by embedding BI information into the operational applications, for example through a service-oriented architecture.
If it is a key strategic business process, measurements about that process would be useful. Where BI information is lacking, the provision of such data to the data warehouse, or the penetration of that information into the organisation, should be investigated as key projects to closer align BI to the strategic goals of the organisation.
A crucial point to acknowledge here is that there are measurement methods that should be included in any BI solution to monitor the success of the solution and it's penetration into the business. In other words, organisations should be using BI on the BI processes themselves to measure the success of those BI initiatives, just like they should be using BI to measure the success of other business initiatives.
* Martin Rennhackkamp is COO of PBT.
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