To BI or not to BI?

One of the most frequently asked questions in management minds in the last four years has probably been: "What does business intelligence (BI) mean for my organisation?"

Usually when the market generates a buzzword, the word spreads rapidly, as the term BI has, and is usually clearly understood without a definition cast in stone anywhere. This has not been the case with BI.

Strangely, the term `business intelligence` is still rather fuzzy. But the reason for this is simple - the definition differs depending on whose view of the world you`re sharing. Simply put, if you speak to a technology supplier, then BI is essentially an information application, if you speak a strategist then BI would be strategy personified. Speaking to a business manager will show BI as a blue-sky information solution, a marketing team will focus on market intelligence, a sales manager would want competitive intelligence and executive management is after real-time decision support.

If you speak to NetMax, BI is the appropriate integration of all of the above components.

There are many who say BI has in fact been around for three decades already but has now had a lick of paint, a new flashy name and is all the craze again. Well there is some truth in that, the need for information has certainly been felt for many years and naturally there have been people supplying it for just as long. But BI is more than that; the principles behind BI should push an organisation to develop its information requirements to become more sophisticated, to continuously answer all the unasked questions, such as: "What does this information mean for us?" It`s at this point that information becomes intelligence. A prominent BI technology supplier phrases it well in its current advertisements: "Your business users don`t need more information. What they need is insight."

The various components of BI integrated into one cohesive solution would allow your organisation to be pulled together, sliced, diced, measured and consequently directed.

Traditionally managers have only ever really been able to manage their strategy reactively based on lag indicators. Past events and results gave a manager an indication as how well the organisation was aligned to the strategy - which was invariably a mission and vision statement prominently advertised somewhere - and thereafter take action to attempt to correct any deviation. The beauty of a BI solution is that it provides management with the opportunity to translate the organisational strategy into meaningful activities and measurements that will provide staff with tangible goals and direction.

Not only does it take care of the `how` and the `where to` but it also openly and directly links the two. The solution identifies the desired activities (behaviour) required for the organisation to achieve its goals and also illustrates the link between those activities and the goals. Illustrating this link openly is very important as this reduces the possibility of delinquent links, which may then lead to the wrong behaviour and in turn the wrong results.

Furthermore, BI represents a collaboration of valuable information from across the entire organisation. In the ever-increasing competitive markets, managers can no longer afford to view their businesses as separate functional areas with individual hubs of business-critical information. Integrated, cross-functional, real-time information has become a necessity within businesses seeking out that competitive advantage.

Corporate performance management (CPM) adds to the confusion associated with the labels, in that it is entwined with BI - sometimes so closely that it can all blur into one. DM Review Magazine defines CPM as the ability "to effectively communicate, comprehend and control (C3) the performance of an organisation". The article referred to here went on to explain that CPM builds on any BI initiative in an organisation to "comprehend the meaning of performance trends over time" and to "take action to control the organisation in its efforts to achiev(e) performance objectives".

So it would be more accurate to say that CPM is what we do with the BI that we are able to produce within the organisation.

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To further clarify BI, it may be useful to highlight the specific focus areas that corporate intelligence encompasses versus BI. Corporate intelligence focuses more specifically on those issues that are top of mind for corporates, such as investing in foreign ventures; seeking out new sources of capital and contemplating mergers or acquisitions often with the objective of enhancing the security and protecting market share/brand.

Information management -> knowledge management -> business intelligence

Information management is really the collecting, coordinating and storing of relevant information for an organisation. Knowledge management then takes that process one step further and provides an infrastructure through which to collaborate various areas of information and provide resources with access (functionality) to that accumulated knowledge in the manner in which it is required. BI is yet another step in the information sophistication chain, incorporating interpreted information, external and internal information, pre-defined metrics and reports which is based on the organisation`s strategy and analytical reporting functionality.

The benefits that BI can bring about in your organisation include:

* Strategic direction in day-to-day tasks.
* Specific measurable progress towards achieving strategic goals which can then be rolled up into an summarized perspective of the organisation`s progress.
* Quicker, more informed decision-making. Efficiencies realised through the exception reporting.
* Proactive management of the trends, patterns and deviations.
* A standardised and formalised BI process throughout the organization.
* The communication of interpreted results (with comments, actions or initiatives).
* Improved understanding of cause and effect relationships.
* The identification of opportunities to improve efficiencies and effectiveness across the organisation.

Where within the organisation the BI programme should reside raises another interesting point. This choice depends very much on the organisation at hand, the structure of the company and the different leadership roles that exist.

The easy, generic answer would with the CIO but that is not always the case. One likes to believe that any CIO worth their salt strictly aligns their portfolio with the organisation`s strategy and embraces the support nature of their function. This being the case, it would be a sensible home for the programme.

However, the ideal home would be the business development area of the organisation, the same area of the business whose focus it is to provide the company with a competitive advantage. The results from the annual ITWeb Business Intelligence 2004 Survey reflect a very positive move in the industry through an increasing number of BI programmes now, at least, have a specific home and that the majority of that ownership lies within the business and less and less within IT.

Due to the strategic and sometime sensitive nature of the intelligence provided, the BI tools are most often made available to executives, the decision-makers within the organisation. However, a BI solution could call for varying levels or areas of intelligence to be made available to those resources that require it.

This profiling capability offered by various BI applications not only allows for security on sensitive information but also allows a resource to reduce a sea of available information down to a pertinent stream.

Your BI solution is an integral part of your organisation`s strategic planning cycle. Once the strategic focus of your company has been revisited and this has been infiltrated down through the layers of your organisation, then the budgeting, measuring and aligning needs to occur. Measurement and alignment of performance to strategy is where the BI solution comes to the fore and therefore any adjustments to the strategic focus of the organisation, however slight, needs to have an impact on your BI solution.

However, this is certainly the only point at which your BI solution needs to be rejuvenated. An average lifespan of 12 months is recommended before the solution should be re-evaluated and updated, allowing your BI solution to always have one leg in the past and one in the future. In a period of 12 months so many changes occur, the markets grow and move, the culture and concerns of your organisation shift and your financial priorities and opportunities will vary considerably.

NetMax can offer significant value to your organisation through consultations targeting specific problem areas or an end-to-end BI implementation.

NetMax offers expertise on all aspects BI, from translating your strategy into key measures, evolving information into intelligence, facilitating the collaboration of information, identifying the cause and effect links, process improvement and alignment all the way through to the programme and change management focus required in any organisational implementation.