Companies adopting implementation best practices are reaping substantial financial success from their investments in business intelligence (BI). According to a new BusinessWeek Research Services survey, 62 percent of respondents said recent large-scale or strategic BI initiatives returned the value they expected. And, one of the key drivers to achieving business value was the extensive involvement of C-suite executives, including the chief executive officer (CEO).
Commissioned by Knightsbridge Solutions, the study, "Getting Smart About BI: Best Practices Deliver Real Value," examines BI implementation practices within organizations and the primary reasons business value is achieved. While other research showed overall value of BI, this report found a strong correlation between adopting specific best practices and business benefit.
According to the 359 survey respondents from large and midsized companies, the most important prerequisites for BI success are:
- Involvement of top business executives
- Viewing data as a valuable corporate asset
- Adoption of five best practices for BI implementation
Executive sponsorship and involvement in BI projects ranks as the most important role for success - 38 percent of the respondents cited an executive sponsor as crucial, while 15 percent of those surveyed ranked a senior IT manager as the most important role.
While other research indicates executive sponsorship is a key role for BI success, the extensive involvement of CEOs was not expected. "Today, senior business executives are highly involved in BI," said Larry Marion, research consultant at BusinessWeek Research Services and study leader. "The key players are not just IT executives, such as CIOs, but also CEOs, presidents, CFOs and COOs."
"In fact, the survey respondents said that CEOs were more likely to be involved in large-scale or strategic BI projects than CIOs." Almost six out of 10 respondents said their company's president or CEO is involved in BI decisions, while around half said their company's chief financial officer (CFO) and chief information officer (CIO) are involved.
One CIO participant in the research, Jim Honerkamp of The Hillman Group, a manufacturer of fasteners and other hardware products, noted that top managers only paid "lip service" to BI initiatives until the CEO began quizzing them on data from the BI-generated reports. "Having that kind of strong, high-level sponsor made all the difference," he noted. "Otherwise, it can be very hard to get people to change their habits and processes."
The survey also indicated a strong correlation between how companies view and treat data and the likelihood of achieving business value. More than half of the respondents said their organizations view data as a corporate asset, but almost two-thirds of the companies that have achieved greater than expected value from their BI systems viewed data as a corporate asset.
"And to take this correlation a step further, the survey revealed that companies implementing five BI best practices to optimize the value of their data were significantly more likely to achieve the expected business value than companies that didn't," Marion said. The five best practices include:
- Business information governance programs - 60 percent adoption by companies who have achieved BI success versus 51 percent overall.
- Enterprise information strategy - 66 percent adoption by companies who have achieved BI success versus 54 percent overall.
- Information quality programs - 69 percent adoption by companies who have achieved BI success versus 54 percent overall.
- Enterprise data warehousing - 66 percent adoption by companies who have achieved BI success versus 59 percent overall.
- BI competency centers - 48 percent adoption by companies who have achieved BI success versus 39 percent overall.
BI success and value hinge primarily upon executive sponsorship, business and IT collaboration and implementation of these five best practices according to the study findings. The study reveals BI failures occur for several reasons. Lack of user adoption was the most frequent reason along with two others including incomplete or inaccurate business requirements and disconnect between BI and performance management in the organization.
"Getting Smart About BI: Best Practices Deliver Real Value," the survey and research report, is available on www.knightsbridge.com/bi_bestpractices.
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