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Companies Finally See Value in BI

• By Kathleen Ohlson
• August 1, 2005

Jonathan Wu is senior principal with Knightsbridge Solutions, where he advises customers about business intelligence and data warehousing. The firm recently issued a survey, declaring companies are finally taking BI seriously. During an interview with ADT, Wu examines these reasons.

Q: The survey mentioned companies are no longer giving lip service to business intelligence. What has changed to make these companies take business intelligence seriously?

A. BI is on the minds of executives and board directors because of the sheer benefits it provides—the ability to easily monitor, analyze and report activities and operations, which leads to informed decision-making. Several influencing factors elevated BI to the forefront of IT initiatives: the economic downturn from 2001 to 2003, legislative acts and the increased pace of business. During the economic downturn, managers were forced to make difficult business decisions and at times, they lacked timely, accurate and relevant information to do so. Managing by gut reaction is uncomfortable, especially when individual careers are on the line and professionals and executives don’t want to appear uninformed.

Legislative acts such as Sarbanes-Oxley and HIPAA are just two examples of the numerous enactments that managers of organizations must address every day. Managers must actively monitor and analyze market conditions and their operations, and then take action to stay competitive—or even just to survive. These significant influences have created a greater awareness and appreciation of information, which in turn is boosting broad demand for BI solutions.

Q: When companies did tackle business intelligence in the past, how did they go about it? What were their common mistakes?

A: Historically, organizations have approached BI in a haphazard manner. Solutions were built to address a specific need for a department or business function without considering the needs of the entire enterprise. As a result, information silos and inefficiencies were created as employees tried to integrate data from disparate systems. In most cases, different BI applications with similar functionality were purchased, which resulted in duplication of technology, cost and support. A few more common mistakes that companies made when they tackled BI:

• Underestimating the required level of effort
• Not dedicating business professionals as project team resources
• Thinking that BI is an IT project as opposed to a business solution
• Outsourcing the entire project
• Not formally documenting and validating business requirements
• Lack of training and change management

Q: According to your survey, businesses and ITare collaborating more. What problems did they have before? Why are they collaborating now? What changed?

A: Greater collaboration is happening because of the rapid changes in business and the global economic environment. With major forces at play, organizations have been required to re-think how they do business to win and survive. Business and IT professionals must work collaboratively to address their organizations’ most pressing problems. The business side is recognizing and appreciating technology’s role as an enabler of business activities and success. At the same time, IT professionals are realizing that in order to provide more value, they need to learn and understand the business.

Q: What do companies need to do to put together an effective business intelligence strategy?

A: A key element for an effective BI strategy—and very often a missing one—is getting senior management support and participation. This ensures an organization’s goals and objectives and its information needs will align with the BI initiative. Having a clear understanding of both a company’s business goals and existing information environment facilitates strategy planning. Then a phased enterprise BI solution can be deployed so the current information environment evolves into the desired scalable state over a period of time.

Q: What are the benefits that business intelligence brings to IT? What are the benefits for businesses outside of reading data easier?

A: It provides business professionals the ability to easily access information without involving an IT professional. This alleviates the bottleneck of information requests submitted to IT. In turn, IT professionals can be proactive instead of constantly reactionary. Some additional business benefits are:

• Enables information on demand…when you want it and need it
• Integrates data from disparate source systems
• Alleviates manual manipulation of data by automating data integration and
  processing functions
• Ability to analyze summary information and then drill into the next logical layers of detail to develop an
  understanding of trends and events
• Automatic updates or monitoring of events and activities of the business
• Provides for sharing of information via publishing, messaging or e-mail
• Facilitates collaboration among groups of individuals

ILLUSTRATION BY SCOTT POLLACK