Consider the following case study. A company rolls out a new customer intimacy strategy, and functional solutions to customer relationship problems commence. The sales division launches an automation program to coordinate and streamline sales activity. Customer service cleans up their install base data so that managers have information about products a customer owns when they call for service. Marketing develops campaign tools to enable targeted promotions aimed at the specific interests and buying behaviors of their customers.
While the company experiences some worthwhile advancement, problems ensue. The pricing structure on marketing's most recent promotion is inconsistent with deals being worked by sales. A sales representative walks into an account with multiple open service requests, and the customer wonders why they're being pressured to buy new products when their current products aren't working. Meanwhile, customer service calls to renew maintenance on a product that sales is currently negotiating to trade in.
Despite this company's best intentions, the supplier does not intimately know these customers, and they feel it. This company has a low business intelligence quotient, or BI-Q. They are putting BI to use, but incompletely. Such efforts typically create more problems than they solve and are eventually abandoned in frustration.
The intent of BI is the integrated and coordinated application of business information in order to comprehensively improve products, service, profits and the long-term health and growth of a company. In this case study, a mature BI application would create a progressive customer relationship where:
- Information about customers grows and transforms with each customer interaction.
- The information is communicated and understood fully by all divisions of the company.
A progressive customer relationship is enabled by mature BI capabilities and becomes the foundation of a successful customer intimacy strategy.
This is just one example of how a high BI-Q enables firms to leverage information and alter the competitive landscape. Across industries, BI is having an impact at the enterprise and functional levels and across diverse business processes, including strategy and plan execution, corporate performance management and business processes management. Fully realized BI capabilities enable CEOs to take an information-based approach to strategy management and drive alignment around strategy.
Therein lies the lure of BI to CEOs: BI provides increasing control over business. At the same time, BI provides greater empowerment to management and individual contributors. That is the promise and the power of information. But this promise is only realized when BI is applied intelligently.
How do firms develop mature BI capabilities to reach their goals? To achieve breakthrough results with BI requires proficiency in multiple disciplines:
- Strategy management,
- Plan management,
- Financial management,
- Process management,
- People management, and
- Information management.
The BI-Q is a measure of the effectiveness of a firm's current BI organizational capabilities in each of these disciplines. The measure can be calculated by looking at specific capabilities in each discipline to determine where the firm lies on a maturity scale.
The following factors contribute to higher ratings on the maturity scale.
- Robust informed linkages of plans, processes and people to business strategy.
- Clear key performance indicators used across the business to monitor performance.
- A strong feedback loop enabling a continual learning process.
- Informed connections across business functions and business processes.
- Advanced use of analytics supported by known, shared data.
As an example, a company that scores low maturity for strategy management will use little to no data in developing their strategy. The strategy may have a single focus of how to increase revenue with little consideration for product or customer factors. Strategy planning sessions, if held, will display little or no cross-functional exchanges.
On the other hand, a high maturity company is greatly dependent upon their BI infrastructure for strategy planning sessions that involve an inclusive, cross-functional senior executive team. Functional and business unit leaders come to the strategy planning sessions well prepared with data and a keen understanding of the linkages between business functions and business processes. Each session follows a typical flow:
- Strategy alignment and confirmation,
- Analysis of what happened versus expectations,
- Determination of the consequences and current conditions,
- Open discussion regarding available options, and
- Decision on action plans.
In this example, critical cross-discipline capabilities are front and center. This includes information management to enable a data-driven strategy discussion, plan management to drive strategy linkages across multiple business functions and processes, and people management to create the open, team-based approach to business execution.
Once known, a company's BI-Q can also be used to identify logical paths and programs to increase BI organizational capabilities that lead to informed business performance. By understanding the current state, a prescription for what to do next and a long-term roadmap to a high BI-Q can be created.
For example, consider a firm that successfully develops an inclusive plan, understands what to measure and analyze, and creates a strong feedback loop based on performance to plan, but does so on the heroic manual efforts of its business analysts. This company has the capability to make great use of information and is aligned on what actions to take, but due to the manual nature of their information management, the available information lacks timeliness and is incomplete. This company needs to focus on developing maturity in its information management processes. On the other hand, a firm that makes most decisions on gut feel and operates in functional silos may want to focus on using information to create an integrated and informed high-impact business strategy.
The key to understanding a firm's BI-Q rating and developing a smart investment strategy is to conduct a cross-functional multilevel assessment of BI maturity. Acting on that assessment then requires a strong endorsement from senior management.
Leveraging the growing amount of information assets to improve business performance is a challenging endeavor. Companies with a high BI-Q have a strong partnership between the CIO and CEO, and an executive sponsored, multiyear BI program mapped to their corporate strategy. These companies are enjoying the profound impact that information can have on business performance.
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