Historically, business intelligence (BI) was a tool whose use was concentrated in a small set of highly computer literate, analytically skilled power users. Typically, such users were staff analysts at the corporate headquarters, and their use of BI was by self-selection: they chose to learn it and use it because it helped them do their jobs.
BI’s Potential for Process Improvement and More
As business intelligence has become more mainstream, its potential application beyond a small headquarters analyst community has become apparent. Potential applications of BI include scorecards and dashboards for executives, BI embedded into operational systems for front-line workers (whether that front-line worker is on the manufacturing line, a call center agent, or the manager of a retail location), and analysis for/by trading partners both upstream and downstream. The mainstreaming of BI is allowing companies information to improve areas such as process improvement, performance management, operations management, sales analysis, and demand management — just to name a few.
For the proponents of BI, this recognition of BI’s widespread potential is both a blessing and a challenge. The blessing is that our evangelism and education efforts are succeeding in causing the enterprise to recognize that business intelligence can be a key enabler of process improvement and better business results. The challenge is that the increased demand for BI – more applications, more users, wider adoption, and so on – exceeds the capacity.
BI Strategy Program Management and Architecture Skill
This capacity shortfall exists in both the IT department and the functional departments that comprise the users and potential users of BI. It exists in the IT department because the supply of skilled BI project managers, architects, designers, and developers is limited relative to the demand for people with these skills. Yes, contractors can be used for some of the tool-specific work, such as developing reports using Business Objects, and some of the work potentially can be sent off-shore. But finding people to do the high-skill strategy, business alignment, and architecture work can be quite challenging. To use a construction analogy, there are plenty of people who can drive nails and hang drywall, but few architects and engineers.
The capacity shortfall faced by the potential consumers of BI – “the business” – is more subtle. At a basic level, it might mean needing to train users on how to use BI software to run reports and analyze data. But the capacity required to effectively utilize BI is more than that: it is the analytical capability to understand the information provided by BI and leverage it to make better decisions and achieve better business results. The value of a BI application remains latent unless the business has the talent to leverage the information it provides. It is this analytical talent that is in short supply and lacking in many organizations that aspire to use BI.
BI capacity has a strategic dimension as well. The fundamental requirement is that executive management is committed to “management by fact,” whether the facts are what they desire them to be or not. If top management isn’t willing to look at the cold hard facts without blinking, there’s no ROI to a BI application that calculates those facts, surrounds them with useful context, and presents them in a visually appealing and easy-to-understand way.
These components necessary for BI success –BI strategy, program management, and architecture skill in the IT department, analytical talent in the business functions that will use BI, and executive commitment to management by fact – collectively are called “BI readiness.” Without sufficient BI readiness, no business intelligence initiative will be truly successful. While external assistance from consultants can help advance some elements of BI readiness, ultimately it must become resident within the enterprise and be embodied in company employees.
BI Solutions for Business Results
Food manufacturers and retailers have numerous high-potential opportunities for business intelligence to significantly improve business results: better category management, fewer out-of-stocks on the retail shelf, better inventory management, a streamlined supply chain, more effective promotion management, optimized pricing, and many more. But these opportunities require BI readiness to be realized. So before buying software or embarking on projects, food companies would be well served to assess their BI readiness and address any shortcomings.