I wish that I could tell you that every organization that attempts business intelligence (BI) sees a demonstrable business benefit from it, is happy with the results, and found it an easy undertaking, but, alas, I cannot. Many – in fact, probably most – organizations find BI difficult, more complicated and more costly than they anticipated, cannot quantify the business value realized from it, and generally are only partially satisfied with it. One of the recurring types of consulting engagements we tackle is a “mid-course correction:” the client has been investing in / working on BI for some period of time, but isn’t happy with the results.
As business intelligence consultants working with clients of varying sizes in multiple industries on such mid-course correction projects, we see a number of recurring problems that contribute to lack of success. These common BI problems are depicted in this graphic (click to enlarge):
In this two-part series, we’ll examine each of the five columns in the graphic in turn. In the first part of the series we’ll look at BI strategy and BI readiness.
Common BI Problem #1: Lack of BI Strategy
When undertaking a BI initiative, the question that must have a rock-solid, compelling answer is, “Why are we doing this?” In other words, how having this BI will drive specific business benefits and drive business value must be clearly articulated. When BI lacks a compelling and well-communicated value proposition as, sadly, it does for many organizations, we often see these symptoms:
- Requirements are stated as lists of data elements to be brought into the data warehouse, rather than as the business analyses (articulated as business questions) that BI will enable the business to perform
- The executives who must approve investments in BI are reluctant to do so, because they don’t understand what benefits they, and the business, will derive from them
- The proponents of BI have a “build it and they will use it” mindset rather than specific plans for embedding BI in fundamental business processes and decisions
- The value propositions promised by BI are vague and generic (example: “enable us to understand our customers better”); the BI justification is silent regarding what specific information will be provided, who will use it in which business processes, how that information will enable more informed/better decisions, and which business KPIs/results will be favorably affected
Such symptoms denote a lack of BI strategy. Business intelligence is just like any other business improvement technique: there must be a strategy/plan/roadmap that describes exactly what it will do, how the organization must change to leverage it, and specifically how having it will drive positive business results.
Common BI Problem #2: Lack of BI Readiness
What is BI readiness? Essentially, it means that the necessary pre-conditions for BI success are in place. If these preconditions aren’t in place, it does little good to embark on a BI initiative without first addressing them; if not, time, effort, and money likely will be wasted and no good outcome achieved.
As business intelligence consultants, we use several diagnostic methods – interviews, checklists, questionnaires, surveys, documentation review, and more – to assess a client organization’s BI readiness. If you’re undertaking a new BI initiative, or looking to revamp a stalled BI program you can use some of the following questions – similar to the ones we use in our methodology – to assess your own BI readiness:
- Does your organization have and consistently use a framework for prioritizing and managing investments in BI? Investments in BI are conceptually no different than any other type of business investment, and should be managed with the same rigor.
- To what degree does your organization have an objective, fact-based understanding of the quality of its data? The quality of information that can be provided by BI is limited by the quality of the data available.
- Does your organization have people with the necessary BI skills and use appropriate BI-specific technical methods?
- Does your organization understand the change management challenges of BI, and appropriately address them? BI entails consuming information for the purpose of making more informed/better decisions. In other words, it fundamentally is a thinking process; any time we’re asking someone to change the way they think about a problem or business situation, change management is a critical element. BI often requires the use of new/different software tools, which can be another change management challenge, especially for less computer-savvy users.
- Does your organization know how to identify and manage the risks associated with a BI initiative? All business improvement initiatives, especially those – like BI – enabled by information technology, entail risks that must be predicted, discerned, and mitigated when they occur.
If the answer to the above questions generally is “no,” that indicates a lack of BI readiness that must be addressed before proceeding with BI. Attempting BI without the fundamental preconditions for success in place is likely to be frustrating, painful, costly, and destined to fail.
In part two of this series, we’ll examine three more common BI problems: lack of direction, lack of execution, and lack of BI impact. We’ll also briefly touch on the positive impact to profitability that a successful BI program can have.