Although many businesses fully understand the ERP, financial and HR space, they seldom understand the importance and value that business intelligence (BI) brings to an organisation. Today, however, BI is invaluable.
So says Wayne Brider, head of the BI Division of EOH KPMG Consulting, who points out that BI and its adoption has little to do with actual technology.
"Too often projects are formed around implementation of technology, not around business problem-solving or people," he says. "The focus should be on the business environment. Success is determined by the integration of the output of the BI environment into everyday practice."
The BI environment no longer a 'nice to have'. It must become integral to actual business practice. A major benefit is its ability to remove routine processes, replicate them with analytics, and turn workers into those who manage by exception - as opposed to merely collecting, gathering or inputting data.
"The correct use of BI can lead to 30% reduction in overhead," says Brider.
How should BI be implemented? Close attention needs to be paid to intangibles including vision, culture, organisation and human resources, according to Brider.
"The start should be a clear understanding of the organisation's vision, and how best it operates," he says. "Two businesses in same industry can have very different models.
Culture is also vital, and comprises the values, behaviours and attitudes required to enable the vision. The company also needs to understand that one of its most valuable assets is data, and the culture around data and its management should also extend into performance.
However, Brider continues, in many cases, the acquisition of a BI platform seldom extends into the proper infrastructure that needs to be deployed.
Organisation is also vital as implementation requires changes. It creates new employee positions, such as CIOs as well as people who must maintain, report on and manage information. It may result in headcount changes, new divisions and new turf wars about who owns the data.
"Many BI projects fail because the above issues are not adequately addressed," says Brider. "It is rarely the technology that is the root of the problem, although this is quick to be blamed."
If limited to a business unit, the impact of BI implementation is easy to manage. As soon as it is on the more desirable enterprise level however, it is more difficult.
"Performance bonuses and figures will change and there will always be political battles about data ownership," says Brider.
For BI to work, people in the organisation must embrace and utilise it. If they do, the value is immense. If not, the implementation will be deemed to be a failure.
"When implementing BI at the enterprise level, organisations tend to start with the data warehouse, but the biggest problem with this is that while building the warehouse, benefits are not delivered to the rest of the organisation so business units tend to go off and build their own systems.
"When starting with enterprise solutions one needs a logical roll-out plan. Customer profitability - including activity-based costing (ABC) - financial reporting, risk analysis and reporting, and statutory regulations are often the logical starting points, often because of shareholder or regulator demands," he concludes.
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