Despite heavy investments in BI technologies over the past 15 years, many Fortune 500 companies cannot adequately utilize one of their most valuable corporate assets: enterprise data, according to a 2005 CFO Magazine survey.1
For a large, global company, the investment in information management, data warehousing and BI activities can easily run into the hundreds of millions of dollars. However, those BI capabilities are often fragmented across divisions, business functions or departments. And, there is often no clear enterprise strategy in place to help guide their deployment and utilization or to confirm that they live up to their potential of helping companies become more flexible, agile and responsive.
To address the problem of BI fragmentation and to help answer critical questions about the business, a comprehensive enterprise BI strategic plan is critical. However, in my experience, most companies are reluctant to invest in developing an enterprise BI strategic plan because they feel that they can't justify the cost. Further, the C-suite often counters that they have already invested tens of millions in BI, with little to show for it. Before investing in a comprehensive enterprise BI strategic plan, the C-suite wants a firm business case that stresses benefits and ROI.
The business case for an enterprise BI strategic plan begins with addressing the issue of BI fragmentation. A key component in an enterprise BI strategic plan is an assessment of current enterprise BI capabilities. The assessment should review the people, processes and technology that are deployed for BI purposes. It also should include an evaluation of BI resources that are most effective, resources that may be redundant are unproductive and/or unprofitable.
Companies can use the results of the evaluation to begin the process of standardizing BI tools and solutions enterprise-wide. This often results in substantial, visible cost savings from product and architecture consolidation - mainly through economies of scale in purchasing power in the short term and long-term reductions in upgrade and maintenance costs.
A BI strategic plan can also help facilitate the alignment of BI investments with the corporate strategic plan and remove BI silos. Once companies have an understanding of their current BI capabilities - and what those capabilities should be in the future - they can better determine which of their BI investments are helping them to meet their strategic goals. They can also increase the likelihood of aligning future investments with current - and future - corporate strategic objectives and create a plan to exploit those investments to help them meet their goals.
In addition, developing and implementing an enterprise BI strategic plan can help provide a more accurate measurement of the total cost of information (TCI). When companies have a current inventory of all BI resources that are dispersed throughout the company, they can calculate how much those resources originally cost as well as how much it is costing to maintain them.
Further, and perhaps even more important, companies can begin the process of determining which of their BI investments are providing the highest ROI and which are providing little ROI or - worse - costing them money. Once the true TCI of BI capabilities is known, it is a straightforward process to devote resources to those BI initiatives that provide the highest return while limiting or eliminating those initiatives that are not beneficial.
Finally, implementing an enterprise BI strategic plan can allow companies to improve their business performance management (BPM) and regulatory compliance processes. When BI capabilities are standardized enterprise-wide, whomever asks the same question - regardless of division, function or department - gets the same answer.
This consistency results in a single version of the truth about corporate information. Monitoring and managing business performance becomes easier. Decisions can be made more quickly. Management can be proactive, instead of reactive, and can produce more realistic, accurate forecasts of future performance. The financial reporting process is improved because the information needed is more readily available and consistent. And, the C-suite has more confidence in the numbers being produced. Also, over the long term, compliance costs can be reduced because of efficiencies gained in standardizing BI capabilities.
The business case for an enterprise BI strategic plan is clear. Many companies have spent millions of dollars on BI tools, technologies, applications and supporting architectures, often with little to show for it. However, with a BI strategic plan as a guide, those BI investments can provide significant benefits: BI standardization, alignment of BI objectives with corporate strategy, improved cost management, and improved BPM and regulatory compliance management. These benefits are very tangible, and they are certainly worth the price.
- CFO Research Services in collaboration with Deloitte Consulting LLP. "IQ Matters: Senior Finance and IT Executives Look to Boost Information Quality." November 2005.
This publication contains general information only and Deloitte Consulting LLP is not, by means of this publication, rendering business, financial, investment or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte Consulting LLP, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.
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