Having multiple business intelligence tools in the one company can make it difficult to gain the business knowledge everyone was hoping for. Vendors are now exploring ways to bridge operational chasms and put human smarts back into the picture.
If you've been working in business for any length of time, you would have heard countless war stories. There was, for example, the one about the notebook manufacturer whose salespeople won a contract for 600,000 systems only to find its parts department couldn't source more than 300,000 notebook keyboards to make them.
Or the sales manager who set himself up for a bonus by setting conservative sales targets that were easily beaten--until it came time to deliver, when manufacturing was struggling to meet real sales because the production manager had set her strategy based on the low sales forecast. And what about the toy manufacturer that forgot to consult its logistics provider when ramping up production, ending up with loads of unshippable orders that kept shelves empty two weeks before Christmas.
These sorts of stories reflect the type of all-too-common problems that can result when different parts of a company simply can't communicate properly. This was almost understandable years ago, when business managers used to plan strategies based on gut instinct and information that was often months out of date. Yet with the wealth of information available to today's managers, the problems have simply morphed into a different form as managers have come to rely on information systems that often reflect only part of the whole truth--and, in so doing, drive poor business decision making.
Business intelligence (BI) software was, from its inception, designed to fix that situation by allowing first executives, and eventually large numbers of middle managers, to analyse data pertaining to activities that were not within their immediate control. This allowed the correlation of figures in a way that recognises the implicit interconnectedness of the operating divisions of modern business: nobody operates in a vacuum, and BI reflects that fact.
Sort of. The importance of good business reporting has helped the BI segment enjoy strong demand regardless of the varying fortunes of IT on the whole, yet most of the estimated 80 percent of businesses that have implemented BI systems have done so in what analysts like to call a "stovepipe" or "silo" manner.
You'll probably call it something else, though, after you realise the system in which your department has invested months of time --and tens of thousands of dollars--isn't giving you a complete picture of what's happening in the parts of the business outside your immediate control.
BI = Business Imperative
Problems with the distributed nature of business intelligence systems are not new, but finding a workable and universal solution has been much harder than simply identifying the problem. Data is inherently tied with the operational units where it's stored; even though the rise of enterprise resource planning has centralised business data, individual parts of the business still find many different ways to use that information.
Even more fun for the IT strategist, those ways often involve different tools that reflect each tool vendor's individual strengths. Cognos, for example, has long been strong in ad hoc data query processing while SAS Institute's business performance focus has made its systems more of an applied business tool. Hyperion's roots in financial analysis are reflected in the structure of its current tools lineup, although its recent acquisition of query-based BI vendor Brio has rounded out Hyperion's capabilities.
In many cases, the tools' respective strengths provide systems that are most appropriate for the needs of a particular department. Yet multiplicity is the enemy of consistency, and the large number of BI platforms installed in the average company impedes efforts to standardise the handling and management of information across various parts of the business.
It's not just the information that's problematic, points out Russell Evans, sales and marketing director, Hyperion Australia. "Most companies have embraced BI and see a value from it, but it tends to be rear-window looking and [falls into] silos of power and requirement," he says.
"There's pressure on CFOs to greatly improve the clarity of their financial forecasts, but ERP is the domain of the CIO and CFOs need to convince IT to give them the tools to provide greater levels of functionality. Unless CEOs and boards have really got their heads around behaviour from both a people and systems perspective, getting past these silos presents a very big challenge for most organisations."
Although the problem is clear, the solution is not. Gartner recently predicted that this issue would persist within Global 2000 enterprises, which will continue to adopt "disparate and unrelated" BI systems well through 2005. By that point, the analyst firm warned, lack of integrated information could spell disaster as increasingly information-hungry executives find themselves unable to maintain the real-time, top-down perspective they so desperately need.
Timely reporting, after all, is the fuel for modern business--particularly in public companies catering to risk-averse investors--and it is often the companies with the best visibility of their performance that are able to maintain the most trust from investment markets and stakeholders. This trust cascades through the supply chain to suppliers and agents, and its dissolution can spell disaster.
Building BI competence
Clearly, the ideal of a central data repository provides the most promise of meeting the demands of enterprise reporting by storing one version of every piece of information in a single accessible place. In recent years, delivering on this vision became physically possible through storage area networks (SANs) that consolidated data from multiple servers; ERP systems that logically centralised key business information; and data warehouses, which provided data solidarity by organising key data into a single database that could be readily analysed.
None of these technologies has succeeded in overcoming internal business multiplicity, however. To this end, BI advocates are now pushing the consolidation of business intelligence assets into what Gartner calls a BICC (Business Intelligence Competency Centre).
In Gartner's explanation, the BICC becomes a centre of excellence for all things BI-related--a focal point for advocacy of greater business intelligence. Rather than allowing individual departments to pursue their own strategies as they feel like it, the formation of a BICC represents executives' recognition that a more rigorous and stringent approach to BI has become necessary.
It provides both technological guidance and something of a moral high-ground from which BI advocates can force an analytics-driven way of working down through the entire company. In other words, the fight is for information efficiency, and effective BI should be the executive's weapon of choice.
But how to build a BICC? Business intelligence systems, after all, have long been the responsibility of IT departments that--ideally--work with individual departments to build systems that suit their needs. Even the fact that BI has been handled this way reflects the inappropriate structure of most businesses.
Maintenance teams, after all, are given responsibility for changing locks or fixing air conditioners; actuaries are called upon to formally quantify risk exposure; and production managers are charged with making sure supplies get where and when they're needed. So why should BI, which is arguably important as a source of business information in the same way that manufacturing drives business sales, be treated any differently?
Don't be afraid to put some effort into it. A proper BICC should be staffed by technology experts skilled in both the whys and wherefores of specific BI technologies, and in the over-reaching business needs that drive adoption of those technologies. Train your technology people in business understanding and analytical skills; create BI policies that route authority and responsibility for analytics projects through the BICC department; and give the BICC the authority to push the use of BI tools as a means of improving interaction between operationally separate business units.
This approach will give both policy backing and moral weight to the BICC, which will be in a better position to centralise data management and track the technological discrepancies between departments.
2%
4%
