Recently, conversations with friends, clients and professional associates have raised the same questions: Why do companies have such difficulty using business intelligence (BI) strategically? What are the obstacles to success and what can be done to overcome them? We identified four major obstacles that prevent companies from achieving success with BI. Each obstacle also has a solution. The obstacles are:
Business Structure. Companies are organized in divisions such as lines of business (common in the financial services industry), functional departments (common in insurance, healthcare, energy and most other industries) or geography (common in sales and services companies). Business structure provides a way to manage business operations, and this is the source of the obstacle. Managers focus on their single lines of business, department or geography. This causes decisions about the use of BI, the contents of a data mart or data warehouse, the business priorities for and funding of BI initiatives and the interdepartmental sharing (or non-sharing) of data to be made based on a narrow organizational context, not an enterprise-wide or cross-departmental one.
IT Department Structure. Similarly, the structure of the IT department can be an obstacle to successful BI. In many IT departments, the responsibility for the data warehouse and its ETL is in a technical group separate from the group responsible for the analytics. This division makes it difficult to respond to a new business problem with a cohesive BI response. Too often the group responsible for the analytics feels constrained because the data warehouse group cannot respond quickly enough to provide new data and the data warehouse group feels that the business or analytics people can't settle on a set of business requirements so that the data warehouse can be stable. The desire for stability and predictability in a data warehouse is contrary to the dynamic nature of strategic BI.
Management Culture. How executives and management make decisions can be the biggest obstacle to the success of BI. If management decisions are made by discussion of anecdotes or events, by instinct or by reaction to a business situation, then the management culture most likely will not value the careful consideration of data. If managers do not use and rely on data, they will not appreciate the value of BI and how it can help them achieve strategic business goals.
BI Architecture. Strategic BI provides data analytics and delivers information to management. This makes the BI architecture quite different from a traditional information architecture which identifies the logical and physical schemas for data used in business applications. The BI architecture identifies the data that management needs to run the business, solve business problems and achieve strategic goals, and organizes it for effective use rather than for transaction processing. Included in the BI architecture are the variety of requirements for delivering BI, such as e-mail, intranet portal, PDF document, wireless or other means that will facilitate the use of information by individual managers and executives.
The most important aspect of a BI architecture is managing the relationships between the multiple BI applications and tools within a business today. Success in BI with today's BI tools requires the mastery of multiple BI technologies, and the number of technologies needs to be kept to a manageable level if real mastery is to be achieved. Also, BI analytics are now offered with ERP, CRM, SCM and other large business applications. What is the role for these? Which, if any, serve as the enterprise data warehouse? What analytics and information come from each? The proliferation of BI applications makes the BI architecture essential it is the difference between BI success and BI chaos.
Solutions that Overcome BI Obstacles
The solutions for these obstacles are clear-cut, although implementing them is not. They are:
- Enterprise-Wide BI: It is essential to remember that data is a corporate asset, not a departmental one after all, company reorganizations don't affect application systems and their data. BI must be viewed as an enterprise-wide vehicle to manage corporate management information and be managed that way.
- Executive Leadership: Successfully resolving interdepartmental issues regarding BI business rules for deriving important facts (such as product profitability, departmental performance, and so forth), access to and use of departmental data, and use of BI analytics requires executive support. It is critical that executive leadership require and use BI results, key performance indicators and analytics to create a culture that values and uses information to help manage the business and make decisions.
- BI Competency Center: Success with BI requires understanding the data, business rules or meta data, the uses for BI and the tools of the BI environment. Relying on business people with departmental and operational duties to become proficient with every aspect of the BI environment is not realistic. A BI competency center that owns the data from source system extract to the analytic results delivered to business users is another element required for long-term success.
- BI Architecture: The BI environment needs to cohesively deliver information to company managers and executives. This requires a BI technology strategy based on business needs and relatively few BI technologies. The BI architecture is as important as the IT network, application and business systems architectures.
Companies succeeding with strategic BI have overcome these major obstacles by working on these solutions. I'm sure that your company can benefit from them as well.
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
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access