The `search` industry is one of the fastest growing sectors in technology today. When Google went public last year it raised $1.67 billion and then reported revenues in excess of $3 billion for its 2004 financial year. How come? What is everyone searching for?
Many organisations are looking for business intelligence (BI) that can yield competitive advantages.
"Earlier this year, Gartner stated that the greatest barrier to BI deployment is a lack of user skills and knowledge of best practices; but then went on to forecast that by 2008 large enterprises would need three times as many business intelligence personnel as they did in 2004," commented Steven Bernard, Managing Director of MCI Consultants. "Gartner also indicated that the second largest barrier to BI is the high total cost of ownership.
"The following is a novel approach that should help business leaders forge a relationship with a BI supplier in order to maximise the potential advantage and focus their strategic planning efforts."
Create a joint venture (JV) between your business and your BI partner as follows:
* Agree to explore BI projects on a risk vs reward basis.
* Identify projects that produce a cost saving or benefit (payback).
* Do a valuation of the project (value).
* Agree on the JV risk and reward split (cost vs benefit).
* Assume joint responsibility for project management and control.
As an example, the JV may have to handle the following situation:
* Your company needs a daily group cash flow analysis.
* The JV identifies an area that can time-shift funds to create free cash.
* This `free` cash generates interest.
* The software development costs, hardware and staff costs associated with the above, would form part of the costs to produce this income.
* Profit/loss over a three-year period is the interest earned minus the direct costs associated with its production.
* If the answer results in a profit, proceed; otherwise re-think the project.
* Split the profits in the agreed ratio but ensure the cash flows are considered appropriately.
This arrangement addresses the following issues in advance of any commitment:
* Does the technology work (prototyping)?
* Is there a business benefit (quantify a value before commencement)?
* Balance the risk.
* The use of the BI tools by staff.
* A mindset change. Once one project works, there is a precedent for all future BI projects and a suitable balance of the needs and wants within the organisation can be made.
* Focus on an outcome with all associated parties responsible to make the project succeed.
"The result is a good balance between the needs (wants) of the company and the related benefits that are shared by the supplier and users," continued Bernard. "It is outcomes-based and focuses on the sharing of a benefit derived from a system implementation and not the sale of software and services to your organisation."
"Historically, we have had requests to share in the risk and reward process, and also, one of our larger clients now wants us to explore this route with them," concluded Bernard. "Make your BI supplier part of your revenue stream not part of your cost stream and in the process obtain the information you need in your organisation to `drive and stay alive`."
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