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The Business Intelligence Challenge

Published
  • January 01 2003, 1:00am EST

Remember the Pepsi challenge? Although not quite the same, there are some similarities between the famous soda challenge and the business intelligence challenge:

  • One is a life-sustaining liquid. The other is a business-sustaining set of information.
  • Both involve trying multiple options and making a selection.
  • And, if you can't decide, you can still take both and be satisfied!

In the Pepsi challenge, it's Coke versus Pepsi. In the business intelligence (BI) challenge, it's one tool versus another, one business function versus another, an out-of-the-box solution versus a custom solution. Although the BI challenge is more involved, you don't need to make all the decisions at once. BI is an ongoing, iterative process that enhances and enriches information delivery. It is not a new "science." It is only the integration of information pockets that is new.
Over time, organizations have tried to standardize extract, transform and load (ETL), database and reporting tools. They've implemented finance and human resources decision-support applications to capitalize on the data volumes collected in their own transaction applications, their enterprise resource planning (ERP) applications or in those that they've purchased. It's now time to tie all the information together to generate 360º insight. This insight allows you to understand the relationship of costs to employees, profitability to customers and products, marketing strategies to sales success rates and much more.

With 360º insight, executives and leaders can see how their actions affect an organization's decisions and strategic outcomes. It can make the difference between reacting and being proactive by enabling you to capture a new market, retain employees or patent an e-commerce capability. By now, you are probably saying: These are great benefits – how do I get this 360º insight?

When we help our clients understand how to implement 360º insight, we often refer to the Gartner "Whole Company Analytics" framework shown in Figure 1. Organizations must combine siloed metrics and data from systems such as customer relationship management, human resources, finance, supply chain management and industry-specific applications with analytic applications such as balanced scorecards, budgeting/forecasting, activity-based management and profitability modeling. This approach provides an organization with a 360º view and creates proactive decision making.


Figure 1: Gartner Presentation, "BI Application Spaghetti: Tasty Meal or Sauce on Shirt?" N. Rayner, July 2001.

Refine Corporate Strategies

BI applications animate an organization's strategy. They measure the accuracy and success of corporate goals and objectives. You must not be afraid to adjust your strategy when you learn something from 360º insight. Apply the information you discover in an online analytical processing (OLAP) reporting application to adjust a transaction process; that is, refine the HR self-service application's error processing by "closing the loop." Run your transaction data through an analytical engine and produce new, enriched data to help optimize your organization's compensation package. Publish your enterprise metrics (such as your top five margin-generating products) using individual and enterprise portals to ensure top-down and bottom-up communication. If you see positive strategic outcomes, tweak and carry on. If you see negative outcomes, fix your strategy!

Enable with Technology

Operational, analytic and strategic applications are all essential to 360º insight. You can use an iterative approach to implement one or more of these application types gradually while recognizing incremental value along the way. There is no right order. No single application type is better than the others. The only prerequisite is good data! A data warehouse filled with good data is the first step in successfully deploying any BI application. If you are familiar with data warehouses, you may be thinking about summarized, periodic data. Data warehouses have come a long way. Today, they include detailed operational data that is refreshed on a real-time, or nearly real-time basis. To enable 360º insight, invest in a data warehouse that has both a short-term scope and a long-term vision.

Know the BI Challenges

An overriding BI challenge is the fact that there is no right answer. This is frustrating when you want to use a silver bullet to standardize all business functions, data collection processes and reporting capabilities across your enterprise. What happens when your finance department uses a customized ERP application and your HR department uses several niche products? What if the CFO and his direct reports use one reporting tool and the customer service managers use another? If these differences exist, can you still provide your organization with 360º insight? The answer is yes. Moreover, you are not alone in these situations.

In this new column, "Business Intelligence: 360º Insight," we will explore some of these BI challenges. We will approach BI holistically, focusing on implementation objectives and challenges. We will also describe how your organization can acquire and effectively use 360º insight. In the next column, we look at insight as a cross-industry capability and discuss both the benefits and risks of ignoring Business Intelligence: 360º Insight.

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