Continue in 2 seconds

Business Intelligence Benefits: Don't Forget the Revenue!

  • Shari Rogalski, Spyro Karakizis
  • January 01 2004, 1:00am EST

Shari wishes to thank Spyro Karakizis for his contributions to this month's column.

The business intelligence landscape is littered with examples of companies that have been unable to reap the full benefits of business intelligence activities or have outright failed because of lack of commitment.

When beginning to develop a business intelligence solution, most companies start by thinking about how to improve their operational efficiencies and therefore need a better understanding of their business areas' performance. As a result, they tend to focus on corporate "scorecard" or "dashboard" solutions, where key performance metrics are tracked and communicated to middle/upper-level management. Once the company has figured out what is moving through their sales pipeline, how regions are performing against their targets or what the level of customer turnover ("churn") is in a particular division, they start to think more about the external forces that impact their organization. In other words, once companies have established "what" is happening to their cost structure, they focus on "who" it is that can improve their revenue pipeline.

Regardless of how impressive a business intelligence solution is, its true value is in enabling an organization to improve its revenue stream, not just cost containment. Given the large investment required by most business intelligence solutions, the best way to justify the incurred costs is to leverage the technology to improve the business processes related to revenue generation, product development, customer acquisition/retention, cross-selling, inventory management and new markets. The true benefits of a business intelligence solution can be recognized when the decision-making capabilities are enabled throughout the organization. This means the management team can gauge how the company is performing. Additionally, other employees can use enterprise data to improve the services they deliver to the customer and, by extension, the company's revenues. For instance, product development teams can use feedback data to facilitate product enhancement choices; call center representatives can soothe irate customers by offering appropriate solutions based on that customer's value to the company; salespeople can develop customized offerings for the customers based on their existing product mix, experience or life stage; suppliers can keep shelves stocked on a timely basis with an efficient amount of goods; and marketing efforts can target audiences to improve campaign effectiveness.

Commitment Affects Process

In order to realize the benefits of a business intelligence solution, an organization must commit itself to certain objectives. The objectives should include:

  1. Tie the technical solution to specific business capabilities. Re-platforming databases is not an end unto itself, unless the operational savings (hardware/software costs, maintenance fees, training and staffing costs) are realized without reduction to business benefits.
  2. Develop a data governance model to establish consistent definitions for key attributes that will be contained in the business intelligence environment. Data that will be stored in the "enterprise" data warehouse should be considered an enterprise asset, not a departmental or application asset, and should be used as such. Do not forget to define ownership. Someone needs to maintain the data, but that person/ organization may not be the same as the decision-maker who "owns" the data and determines its definition.
  3. Define an appropriate level of conformity. Although every application, department and division has its own specific requirements and specialized data needs, agreement on common data dimensions that the organization uses (or plans to use) in its decision making is essential.
  4. Secure data, especially customer data, and not just for legal reasons. Organizations that seek to secure their customer data because "it is the law" have already missed this point. Customer data must be safeguarded because it represents the huge amount of trust that the customer has placed in the organization. If that trust is violated, the customer will not be willing to provide this data in the future.
  5. Develop consistent business processes across the enterprise. For example, if the sales division of a banking group is divided into three geographic regions and reports its numbers on a calendar month basis while the sales division of the mortgage group is divided into five geographic regions and reports its numbers on a fiscal (accounting) month basis, the organization will have a difficult time understanding what is actually happening at the enterprise level in any given month.

Most of the objectives listed here cannot be accomplished without a real commitment from the business side of the organization. These objectives often call for fundamental changes to (or agreement on) the company's business processes and practices. Unless the company agrees to align business process and practice in order to allow technology to support them, business intelligence projects will likely be only marginally successful.
Selecting the right implementation team, developing an appropriate release plan and selecting the right architecture are as important in a business intelligence project as they are in any information technology (IT) project. However, the degree of business commitment and involvement required cannot be over emphasized. The successful implementation of the technology alone will not allow the business intelligence program to be as successful as it could be unless the business is willing to establish a vision, communicate it throughout the organization, ensure its processes are aligned with the vision and then maintain the executive support. However, those organizations that can successfully implement a business intelligence capability stand to gain a significant advantage over their competitors that will generate revenue in addition to the cost-cutting everyone else is doing.

The examples noted in this column illustrate great 360-degree insight opportunities –­ sharing data across the organization. The next step is truly becoming a cohesive enterprise where data and information are integrated across vertical and horizontal boundaries. That is what it means to be a high-performance business.

Register or login for access to this item and much more

All Information Management content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access