Over the past 13 years, my colleagues and I at DecisionPath have had the privilege of helping major companies in many industries formulate their business intelligence (BI) strategies. While each company and industry is different, there are common components of an effective BI strategy. Some are specific to BI and others are applicable for any business process improvement initiative. And make no mistake – BI initiatives must be business process improvement initiatives if they are to create business value. For more on using BI to create business value, see our book The Profit Impact of Business Intelligence. In this blog, we introduce five key components of business intelligence strategy. Over the next few months, we will continue on the BI strategy theme by providing concise excerpts from our forthcoming book, provisionally titled Business Intelligence Strategy: Lessons from Industry Leaders.
Five Key Components of BI Strategy:
- Business Intelligence Uses. A BI strategy must clearly articulate how advanced analytics, scorecards, dashboards, alerts, predictive analytics, big data, and multi-dimensional analysis (OLAP) will be used within specific business processes to create a quantifiable return-on-investment.
- Business Intelligence Execution. A BI strategy must clearly identify any gaps in the company’s ability to execute a multi-year business intelligence initiative, including gaps in BI and data warehousing technical abilities, gaps in business units’ ability to change their business processes to leverage BI, and gaps in the company’s ability to align and govern a multi-year BI program.
- Business Intelligence Roadmap. A BI strategy must include a pragmatic roadmap that effectively sequences BI technical projects, IT infrastructure projects (if needed), data governance/quality projects, and business process improvement projects. The business intelligence roadmap should also include a performance measurement component that: (a) measures cost, technical, and schedule performance; and (b) measures improvements to business performance after each BI application is implemented by the business.
- Business Process Improvement. A BI strategy must address needed improvements to company business process analysis and improvement skills. Many industry-leading companies are good at executing their current business processes and business models. Fewer such companies are actually good at changing and improving their business processes, and they need training in core business process analysis, design, and improvement skills and methods.
- Business Intelligence and Organizational Change. A BI strategy must address organizational and cultural change challenges in order to anticipate and overcome the barriers to becoming a “data driven” company. Make no mistake, this is a serious challenge because many senior professionals are used to operating without good information and sophisticated analyses, and thus decision-making is more of an intuitive, personality-driven process in many successful companies. Teaching these accomplished people to incorporate business intelligence into their decision processes is essential.
Including these five key components in your business intelligence strategy establishes a solid foundation for BI success. In the coming months, we’ll talk about BI strategy for various industries and business functions.