Executive sponsorship lacking in BI strategy decisions

The lack of executive sponsorship at board level is jeopardising the successful planning and implementation of business intelligence (BI) programmes that enterprises need to grow sustainably, says Gerhard Moolman, strategic management consultant at Red Man Technologies.

"Many of our financial institutions are at risk of non-compliance with local regulations because they do not have in place appropriate systems to facilitate relevant and co-ordinated customer communication. A series of Acts have a far-reaching impact on the way we manage customer information and how we communicate to clients. A single view of the client plays a central role here.

"The basic building block of the single view of a customer, crucial in most BI solutions, is an adequate data warehouse. In most cases, data warehouses in South African enterprises are inadequately populated. A solidly built and populated data warehouse is the biggest challenge and takes about 60% of the effort in getting a BI initiative working."

Moolman believes that at this stage, few SA enterprises are spending wisely on BI initiatives. "They are not spending enough on getting the rudimentary systems in place. Some try to be too ambitious without establishing the basic capabilities. Realisation of these mistakes often comes too late and leads to projects changing direction.

"This churn of systems development - the re-invention of ideas that never reach maturity - perpetuates the problem. My experience is that less damage is done by seeing a project through to completion than changing it in mid-stream. At least the completed system gives a structured base from which to make considered changes."

But underlying the problems of BI is the lack of understanding at an executive level of what it can achieve for the business.

"BI is a collection of people, processes and technologies used to better understand a business and the markets in which it operates. Information is taken through specific life stages so that it can be presented to decision-makers in the best possible format so they can respond appropriately."

The problem may have started, Moolman says, because BI has been sold as a technical, rather than business, issue.

BI becomes a way of life, not a once-off solution. The solutions planned for are a moving target as markets and business needs change, but it`s possible to positively exploit BI if the fundamentals are in place.

"Misconceptions about BI predominate, so expectations of what it will deliver are grossly misplaced. It is often seen as tools to report reactively on past business. It is not seen as a critical source of proactive executive and operational decision-making.

"BI must be sold to solve business issues. This is why it is crucial to have executive level management understanding what information they need to make strategic decisions. The energy to drive BI must come from the enterprises` top, responsible executives, and that`s not happening."

Moolman adds that it is necessary to quantify business benefits to justify the investment in BI. "It is often difficult to build a business case for BI solutions, but it is essential. There needs to be an interrogation of the cost to the business of making misinformed decisions, or the benefits of making the right one.

"In the current economic climate, BI projects need a positive business case to secure the necessary funding for planning and development. A business case based, for example, on an operational solution such as marketing automation, is easier to prove than one that is pure reporting. In other words, the more advanced the BI solution, the easier to prove the business case."

Banks - both local and offshore - have benefited from advanced marketing intelligence, or marketing automation, projects. Two banks - Yapi Kred Bank and Fortis Bank - increased sales dramatically through use of BI-based applications.

Moolman`s advice to executive management embarking on a BI initiative is to ask five basic questions; the answers serve as the touchstone for developing appropriate projects. These are:

* What can we achieve with BI?
* What do we want to achieve?
* What do we currently have to achieve this?
* What technologies should we put in place?
* Who should we ask to put it all in place?

Also important is business imagination where creative solutions need to be engineered.

Any BI initiative will take a significant chunk out of the IT budget because there is a shortage of appropriately skilled people in South Africa and the time needed to build the systems, Moolman adds.

The more urgent the project the higher the resource costs, because there are few people with the appropriate skills to do the work quickly and effectively. There is a serious shortage of BI expertise that can build effective solutions suited for any specific business.

Add strict and effective project management to good BI resources and the odds are that the project will be successful - as long as the expectations are properly managed and the objectives and milestones were defined.

The toolbox needs to be chosen with the outcomes in mind. Hardware and software technologies must support the collection, integration, analysis, interpretation and presentation of information in a format appropriate to the organisation. One size does not fit all enterprises. Tools may be added when needed for decision-making dexterity, active decision-making and responsiveness.