Saturday, December 26, 2009

Successful BI Strategy - Part I

We often run into situations where major companies ask us to help develop a BI strategy. When we ask companies about the objective of implementing BI solution, we hear the following statements quite often
  • “…produce enhanced organizational capabilities to manage data and information as organizational assets.”
  • “…provide a single version of the truth.”
  • “…enable consistent and reliable access to accurate corporate-wide data.”
  • “…provide more sophisticated reporting and analysis, faster turnaround, improved accessibility and enhanced quality.”
  • “…a single touch point where detailed financial transaction information can be filtered on user-entered selection criteria, viewed online, downloaded in standard file formats and used to generate real time reports.”
These objectives doesn't excite business executives and managers as it doesn't articulate how business intelligence will be used within specific business processes to improve business performance.As a result, they underfund business intelligence, which limits its business impact. Very recently, we have faced a situation at one of the large organizations where in Business teams refused fund BI project. They didn't see any compelling reason & business case to implement BI solution.

Lot of time, organizations also get into functional requirements such as the following during BI product evaluation cycle
  • The system shall provide the ability to drill down, drill across, and slice-and-dice.
  • The system shall provide the ability to specify organizational hierarchies and display performance scorecards for each organizational unit.
  • The system shall enable role-based access to information.
  • The system shall provide capabilities to route alerts to business users according to user-defined parameters.
  • The system shall enable integration of data from multiple disparate sources.
BI functional requirements like those listed above are standard features of commercially available BI tools.While it is important to know what your company needs BI tools to do, BI functional requirements typically say little about the kinds of business information, analytical techniques and decision support that are required or the specific core business processes that the company seeks to improve via business intelligence.

As per Gatrner Report "Fatal Flaws in BI Implementation", it is very important to get buy in & active participation from business teams for a BI project to be successful. This requires a clear linkage between business strategies, the core business processes via which the strategies are executed, and BI-driven business improvement opportunities, which is the basis for a BI business case that is compelling to the business stakeholders.

Some examples of compelling BI system objectives can be as below,
  • " BI system will help reduce transportation cost by 5%".
  • "BI system will help reduce cash out situations at ATMs to less than 3".
  • "BI System will help reduce idle cash in ATMs by 40%"
  • "BI System will help increase private label sell by 5% in 80% of retail outlets".
  • "BI System will help reduce stock out situations to less than 2 per outlet for premium or fast moving items".
  • "BI System will help increase share of wallet by 10%".
Each of the above BI objectives are linked to a business process. It clearly tells business team how implementation of BI system can help them achieve their goals. It becomes easier to get buy in from business executives and managers when BI is directly linked to business process improvement.

When you develop a BI strategy, do not look at point solutions like reporting, data integration etc..It's always recommended to look at a business analytics framework which can help you improve your business processes and achieve your business goals. The framework will in turn comprises of set of solutions which can help you address your business problems.  Point solutions like reporting, data integration etc will help you gain short term benefits but it will not help you gain long term benefits & business support. 

1 comment:

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