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Will BI Solve it All?

Published
  • July 25 2003, 1:00am EDT

Organizations and executives have always been lured by new ideas, technologies and hot concepts that promise them competitive edge. New ideas and technologies are not created inside the walls of an everyday company, so when executives listen to promising concepts, they are dealing with high levels of ambiguity. When such a concept is initiated, the organization is taking a risk. Unfortunately, during the dot-com crash, the promise of the technology didn’t pay off (or at least that is the general consensus). The sales pitch: If you want to be profitable and remain competitive, you’ll have to implement "XYZ" is not a very compelling argument nowadays. But the truth is, in order to be profitable and competitive, one must make better business decisions. Technology will not make the decisions for us, at least not yet, but provides guidance in making the decisions.

Business intelligence has a different and unique promise than earlier "hot" concepts which lost their popularity over time. BI concepts are not a product of a few smart individuals. These concepts have been researched heavily in the academic world for several decades. It may not have been called BI, but it was the same idea. Decision science has been dealing with the use of technology to make better decisions for a long time. The problem was that the technology was too complicated to understand, and the business community needed training. Now, as the MBAs understand the technology and underlying concepts much better and as the technology became easier to use and highly available, the BI market started growing.


Figure 1: Parties and Responsibilities

In BI implementations, the organization that takes on the project must be dedicated to the concept. The reason is that BI is not just a technical component but also a business solution that requires the involvement of business users in design, development, testing, implementation, maintenance and growth. The technology vendor is responsible for making the technology available. The integrators are responsible for ensuring knowledge transfer. And the company itself is responsible for making its business domain knowledge is properly applied in building the initiative. (See Figure 1.) The overall success of the implementation depends on the dedication of all three parties. Therefore, at the heart of the project, there must be someone who monitors this level of dedication. This person must be someone in the company who is taking on the project. In a greater scope, this is the BI competency center.1

Similarly, the software vendor and the integrators must each have their own managers dedicated to success. An approach that would not work really well is for any one of these three parties to claim full responsibility in driving the project and making sure the return is positive. For the technology providers, it is critical to see the implementation from the client’s point of view and to convey to the client that the effort is a joint responsibility. This is not to lay the entire burden on the client, and there is a sensitive balance in doing this. What matters most is for the project to be successful and everything else is detail. For that purpose, an executive sponsor of the project must monitor the progress and make sure that everyone sticks to the main goal.

Organizations rely on individuals in making decisions. Individuals rely on the tools provided to them to make the business decisions. Their main tool had traditionally been the spreadsheet application. BI products will now integrate with the desktop, and the business users will see their favorite spreadsheet applications has increased capabilities and new functionality. That is how BI will be integral to almost all decision-making processes.

Will BI solve it all? BI is essential in making better business decisions. One who uses the latest technology and takes advantage of faster computing will certainly have a competitive edge over someone who doesn’t. Is BI here to stay? Yes, organizations will have to use technology to make better decisions. In the course of doing that, making mistakes is not uncommon. Organizations will switch vendors or change their minds about building in house vs. outsourcing the solution. But the idea is to minimize the number of mistakes and take advantage of the increased computing power and the software technology.

References:

1. Oguz, Mehmet. "BI Competency Centers." DMReview.com Online. February 2003. http://www.dmreview.com/master.cfm? NavID=55&EdID=6379.

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