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Clouding the BI Value Proposition

By Steve Williams

The concept of business intelligence (BI) has always been vague.  Amongst the senior business and IT executives with whom we work, BI can mean anything from more responsive reporting, to packaged BI tools, to OLAP analysis, to advanced and predictive analytics. In a recent survey of executives, the majority of respondents each had multiple definitions for describing the analysis of business information to support better decision making and improve business results.  This variety of meanings has led to a diversity of perceived value propositions for BI within the business community, and to a fair amount of confusion about the best way forward as companies seek to leverage BI to improve performance.

Many Flavors of BI/Analytics

To further complicate the issue, we now have BI SaaS (software as a service), Agile BI, and various flavors of analytics – such as self-service analytics, pervasive analytics, social analytics, scalable analytics, and real-time analytics.  Also, there is a lot of attention to bringing unstructured data into the enterprise data warehousing environment, thus blurring the line between business intelligence and content management. While many of these trends warrant a deeper drill-down into their benefits and limitations, the overall impact of buzzword proliferation is a lack of focus by executives on the business benefits of BI.

During a recent conversation with the CIO of a multi-billion financial service firm, it came to light that the firm was looking at a variety of advanced (but largely unproven) technologies in part so that a planned enterprise data warehouse could bring in information from social media.  This might be fine for a company that has harnessed its fundamental transaction and reference information to deliver the facts about its business, but it seems overly risky
(not to mention it diverts resources from high value-add BI programs) for companies at an early stage of BI maturity, and the value proposition seems vague at best.

First, Get the BI Basics Right

From a business perspective, our experience with major companies in a wide range of industries suggests that most companies need to walk before they try to run when it comes to BI.  Many are still at the stage of upgrading their operational reporting capabilities, and others are just starting the journey to advanced BI, analytics, and performance management systems.  The foundation for these capabilities is largely about integrated business facts and common business perspectives for analyzing and using those facts.  Essentially, BI, analytics, and performance management systems use historical facts to understand what has happened at a very granular level, and then they use those same facts to predict and simulate future business results. 

The historical perspective is necessary because we don’t have crystal balls – we need to use knowledge about what has happened to make good assumptions about what might happen.  Many companies don’t have this foundation of business facts in place.

 Good BI isn’t about Building a Better Mousetrap

On the other hand, IT vendors in the data warehousing, information management, business intelligence, cloud computing, and content management spaces are all about “building better mousetraps” – and in some cases marketing technological approaches in search of a generalized problem to solve.  Further, IT innovation has historically outpaced the ability of many businesses to absorb IT-driven advances into core business processes.  Witness the fact that BI has typically ranked at or near the top of CIO agendas for the past few years, yet year after year and business survey after business survey the business community complains about not having the information and analytics it needs to drive business performance.  Our experience has been that business executives have been reluctant to fully fund BI because its value proposition is vague and confusing.  Interjecting silver-bullet technology “solutions” and supposedly better methods only clouds the issue further and thus slows down BI advancement.  This is unfortunate because BI done right has the proven ability to drive profits, performance, and competitive advantage.

One Response

  1. [...] – both key impediments to BI success.  In a previous post, I examined some of the issues that cloud the value proposition. In this post, let’s look at defining the value proposition (actually propositions, as the value [...]

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