From Trending the Known to Predicting the New
Why can a sales VP quickly and easily find the location and availability of a specific hotel on a street in Uzbekistan with Google maps and a travel site, but cannot easily target the right customers with the right offers based on their demographics in his companys business intelligence (BI) system? While B2C is succeeding with mash-ups and visualization experiences that support users at lightning speed, the B2B world is falling behind - and business users arent willing to wait.
Companies are aware of the problem. In many recent surveys and reports, CIOs have claimed BI is their #1 priority, and recent spending on BI technology has proved it. IDC claims the BI market grew 11.5 percent in 2006 to reach $6.25 billion in worldwide software revenue. Microsoft and Oracle have jumped on the bandwagon with recent BI investments and industry conferences. With all this interest in BI, why have these solutions seen little adoption among the business users at the front lines?
Todays BI systems rely heavily on IT involvement. With their one-size-fits-all approach, these systems cannot adequately serve the needs of the business user among whom BI has been deployed. Front-line employees cannot wait for preconfigured reports or IT queries, and as a result, take action based on experience and intuition, rather than hard facts. Traditional BI has failed to meet their needs. The danger is that a multitude of small bad decisions on the front lines have the potential to impact the company as significantly as one major bad big bet. Companies trust their employees experience and domain knowledge to make solid decisions, and theyve invested heavily in data and BI to help in facilitating those decisions. However, employees dont need another static report - they need a flexible, fast data analysis environment built around their decision-making process.
I recently spoke at a financial conference and asked the question: How many of your companies have BI systems? Most members of the audience raised their hands. When I asked, How many of you use Excel? everyone raised their hands. This is indicative of a major trend. Today, analyst research firms estimate there are $8 billion worth of internally developed analytics applications that use Excel as the front end. In fact, BI companies treat output to Excel as a powerful product feature. I dont view that as a feature. I view it as a mass failing. It proves that despite all efforts, BI fails to deliver a daily business decision-making tool for the end-user - the person on the front lines making critical decisions every day.
Users turn to Excel because they cannot ask and answer their own questions quickly in the BI system. As soon as the data is dumped into a spreadsheet, the user is out of the BI system with no way back in (not to mention the risk of spreading corporate data outside of secure, managed systems). Any insight that the business user gains while interpreting spreadsheets almost always stays with the user - all opportunity for organizational learning or process improvement is lost. Best practices developed by one user cant easily be adopted by teams, and insights, or the thought process behind them, are hard to share.
The tools turned out in recent years by big BI platform players that were built to trend the known dont cut it anymore. While businesses have pushed decision-making down to the field commanders, they havent given them the weapons they need to succeed. The BI architecture simply cannot support the operating needs of business users who want to ask and answer their own questions in response to new occurrences and events in the marketplace. Those decision-makers are stuck in a static world that ends with a dashboard or another query to IT. Todays business professionals cant wait for IT to generate reports. Instead, theyve taken matters into their own hands, pushing Excel to its limits in an attempt to better understand data. Its time to disrupt the status quo.
Fast and Flexible
BI reporting has grown and changed in dramatic ways. The tools that typify next-generation BI allow knowledge workers on the front lines of business to interact with data through an interface that gives them the power to ask and answer questions of their data in real time. This supports the way in which business insights occur. These next-generation solutions embrace the Web 2.0 paradigm. They enable mash-ups, sharing and collaboration on unprecedented levels - and theyre actually fun to use.
In traditional BI settings, data is staged in an online analytical processing (OLAP) cube to support drilldown along pre-defined paths, such as national sales to regional sales to territorial sales to rep sales. Turning that analysis on its head, say, to look at territory sales by brand or pack size at any point during the drilldown, would be impossible with traditional systems. In analytics available with next generation BI, the front-line knowledge workers have to be able to get directly to the source data in the database and look at it any way they wish. The key facts needed to make an operating decision are often not in the cube because they havent been anticipated by the IT department. This is not a question of the forest obscuring the trees - you have to be able to see both. The business users cannot be disconnected from the critical data needed to make a key business decision.
When a sales manager is looking at regional sales figures, he or she may find a trend that sparks an idea. With next generation BI, s/he can immediately cut and recut the data, casting it in different light, asking new questions and seeing the answer instantly. He can incorporate a different set of data - marketing campaigns - on the fly and see the impact. The user gains insight and business decision-making advantage at every turn. The analysis process that uncovered these new information insights are captured for future use, and results and processes can be shared with others inside and outside the organization. And all this happens within the system at lightning speed.
The difference between the static world of traditional BI charting the known versus the ask and answer intuitive approach of Next generation BI exploiting the new is enormous.
Though the idea may seem simple, most traditional BI tools share a basic and fatal flaw. They are excellent at trending the known - telling you more about what you already know - but they fall short when it comes to breaking down barriers and helping to uncover new courses to chart. By combining the strengths of traditional BI, dashboards, visualization tools, OLAP, business processes and good-old spreadsheets, Next generation BI takes things a crucial step further.
As Michael Douglas character in the movie Wall Street (Gordon Gekko) said, Stop sending me information and start getting me some. This sums up the difference between trending the known and exploiting the new. The power of front-line knowledge workers is unleashed with Next generation BI solutions. Instead of looking at information artifacts, they can ask and answer questions of fresh data, gaining insight and drawing conclusions. This leads to significantly faster and better decision-making and an information advantage that can make all the difference in todays economy.
Working Together Gaining Advantages
The collaborative nature of Next generation BI solutions is rapidly changing business models by rewarding teamwork and fast interaction and creating analytics-savvy businesses.
What are the characteristics of an analytics-savvy organization? First of all, more front-line workers need a piece of the action. Youre hiring smart people, and you want them to make breakthrough contributions, so why force them to use cumbersome, time-consuming workarounds? Analytics is enabling more proactive, high-frequency interaction with the data where more people are able to refine and utilize information.
Secondly, the analytic-savvy organization is more agile - able to adapt and respond - whether thats to a competitor that releases a new product, a change to the pricing structure in the marketplace or the success of its own marketing campaign. This allows much greater agility and the ability to more readily shift resources to higher performing areas - with the goal of being first-to-market and quickest to respond to changes.
Remember, you dont get true analytics when you buy BI - at least not the type of analytics that knowledge workers can use to drive their decision-making process. Analytics solves a different set of problems from traditional BI and has its own set of end-user requirements. By arming your operating managers with the analytics capabilities of Next generation BI, however, you can supercharge your existing BI investment and achieve unprecedented corporate performance.
- Brian McDonough, Dan Vesset. "Worldwide Business Intelligence Tools 2006 Vendor Shares." IDC: June 2007.
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