Companies succeeding with business intelligence (BI) are improving their bottom lines by adding millions of dollars in incremental revenues and saving millions of dollars in expenses. The best overall metric for BI that I have found is total actual incremental revenues and cost savings attributed to BI projects. The best practice example of this is Lowe's Home Improvement Warehouse. Lowe's tracks the business value of their BI initiatives and courageously announces the results publicly: more than $100 million in incremental revenues and cost savings attributed to BI to date.
Companies investing in BI and not producing results similar to Lowe's are not getting strategic business advantage from their BI investments. The equation for success is simple: BI Strategy + BI Architecture + BI Delivery = BI Results.
Assuring success requires looking at all four components of this equation. I use a BI health check to determine the actions required to redirect BI investments to produce bottom-line payoffs. Evaluating these components provides insight into the direction, structure, technical approaches and impact of the company's BI initiative. This insight becomes the basis to build further success and bottom-line impact with BI.
BI Health Check
The spectrum of BI applications is large and diverse. Operations-focused BI helps business operations process the daily flow of work more effectively and is a valuable component of a complete BI solution. Strategic BI focuses on helping the business enhance revenues, find new opportunities, contain costs, prevent losses and improve customer service. There are also specific BI applications such as deep pattern analysis and data mining. A BI health check provides a complete evaluation, using a scorecard, of all factors and applications associated with BI in the enterprise. Let's consider the four components of BI success.
BI Strategy. The direction set by business executives is an important part of the BI strategy assessment. The business intent and direction for BI within the company is determined by interviewing business executives and evaluating the examples they provide. Typical questions include:
What is the role of BI in the company's business strategy?
- What business metrics are targeted for improvement? Are priorities focused and clear?
- What analytics are required to provide the insight useful to business people? Are they defined and used in managing the business?
- What business managers are charged with improving results? Are they involved and accountable for improving results?
- What is the strategy for incorporating BI into new areas of the business?
These questions and others address the strategic and management focus for using BI to drive business results. It is this focus that achieves bottom-line payback from BI.
BI Architecture. The technical environment in which BI operates governs the flexibility and scalability of BI in the enterprise. The BI architecture component assesses the data infrastructure that supports the business use of BI and is accomplished by evaluating the technical platforms of data sources, the data warehouse and BI technology. Typical questions include:
- Which BI architecture best practices are being employed effectively? Which aren't?
- How are data quality issues addressed and data integrity ensured?
- Are effective (scalable, productive for quick response to changing business needs, suitable for users, compatible with IT technology platforms and standards and so forth) BI technologies being employed?
- Is data presentation tailored to the needs of each individual using BI?
The technology infrastructure is critical for successfully adapting to the changing requirements of business managers for analytics and information that can help drive bottom-line results. These questions and others address how well the technology infrastructure supports information flexibility, adaptability and the BI strategy.
BI Delivery. The approach used to deliver BI governs the flexibility, scalability, maintainability and usability of BI in the enterprise. The processes that support the delivery and enhancement of BI are assessed by evaluating the technologies, development, maintenance and enhancement processes used for BI. Typical questions include:
- Which BI delivery best practices are being used? Which aren't?
- Is the BI environment managed through meta data? Is meta data managed as an enterprise-wide critical information resource?
- What methodology is used for BI? How are business users included in BI development and delivery? Is it based on iterative development or traditional development approaches?
- How are ETL, analytic and BI applications managed to ensure consistent, correct and timely delivery of data and analytics?
BI delivery is about getting the right information and analysis to the right businessperson at the right time. These questions and others assess how well delivery practices and procedures perform this critical activity.
BI Results. This is where the rubber hits the road: how well is information turned into effective action? The uses of BI by the business users is assessed and evaluated against the strategy for BI set by management. Typical questions include:
What business results are produced with BI? How are these business results being tracked?
- Are financial impacts validated by the CFO?
- How well is information turned into action? What is the sense of urgency in doing so?
It is action, not information and analytics, that creates bottom-line business results. BI technology applied to real business problems by business people working with BI specialists is a proven approach to improving the bottom line.
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