The Four Sides Of Business Intelligence

Technology folk sometimes talk about Business Intelligence as if it were a single ‘thing’ that works like a silver-bullet to solve all of the analysis woes of a business.  This can turn business professionals off.  People generally want to know of any technology ‘How will it help to get my job done better?’  

The challenge with BI is that it isn’t doing ONE thing – so it can help to break down this blob of technology into its capability areas rather than seeing it as a single lump of techno stuff. Whilst I’m no expert in IT architectures I have been involved in the sourcing and application of business insights for many years and in my experience the role of BI falls quite neatly into four capability areas that DO make sense to business people once explained. 

These are: 

• Operational Analytics and Delivery of Daily Operating Control Insights - Most businesses (I can’t think of any that don’t) have some form of economic engine that turns ‘what they produce into cash’ – whether it’s seats, units, licenses or transactions. Any good business wants to make sure its managers are on the ball and know how things are going on a near-real-time basis.  These insights are sometimes better served in alerts, notifications, scorecards and charts rather than tabular reports where the data may be more difficult to interpret.  In this area there is a distinct blur between operational reporting and BI but that’s not a problem so long as people know what the purpose of the technology is.  Traditional perspectives on what BI technology does lean towards the use of OLAP cubes and huge data pre-processing engines but more recently, in-memory processing and tools like Encanvas BusinessIntel and Qlikview make it possible for users of BI to source the answers to their operational analytical questions without needing to go to the trouble of investing in a pre-processing platform.  Instead such tools use clever middle-ware and data mashup capabilities to bring together new data views as they are needed.  The benefit of this approach is that it cuts many thousands of dollars from BI investments because users are better able to serve themselves with the views of operational data they need.  It normally means that you don’t need a BI department to access the capabilities of BI. 

• Delivery of Actionable Insights – This is the science of find answers to questions that aren’t presently known by decision makers because they don’t know to ask – but if they did know to ask they’d be able to use these insights to intervene in processes to make them work better. (get it?).  A good example of actionable insights comes from geo-mapping of customer data.  It would be weird for a marketing exec to invest marketing dollars answering the question ‘How many of our customers (and what type) are clustered around our local town?’ if there were no reason to believe the answer to such a question could increase new business opportunities or substantially quality of customer service leading to higher retention.  Nevertheless, if a marketing exec were able to analyze their data geo-spatially they might find there are clusters of customers of a particular persona or income profile in a specific locality.  This could make it appealing to introduce campaigns in this specific area rather than a broader region – making the marketing dollars go further. 

• Enterprise Performance Strategy Insights – Business Intelligence tooling plays a key role in large organizations by helping executives to formalize their business strategy to then report on their progress towards achievement of stated objectives.  You would be amazed how many actions are performed by an enterprise that don’t contribute to the small list of objectives they need to concentrate on.  Many of the original BI platform providers placed this capability as a point of focus and embedded good practice methodologies for articulating and communicating strategy like Balanced Scorecard strategy maps and scorecard views into their offerings.  The purpose of performance management strategy BI tools is to make it possible for all areas of the enterprise to embed performance management thinking and behaviours into the day-job rather than seeing ‘strategy’ as something that happens in the management off-siter meeting.

• Community Learning Insights – The most recent change I’ve seen in the BI biosphere is the introduction of socially oriented insight tools that encourage the harvesting of insights from a community that become the first step on a new journey of discovery.  For example, contributory businesses to the supply-chain of many industries like healthcare, policing, insurance and transportation find they are now unable to discharge their optimal customer and stakeholder value without the contributions of other partnering organizations.  Consider for example the role of Traffic Managers in the UK who are responsible for managing the road network of their region.  Unless they work with road works undertakers (such as utilities companies), major logistics companies (like the big supermarkets) and their neighbouring councils, they are unable to keep the traffic flowing because each contributor can make their life more or less painful depending on how they operate.  Understanding the ecosystem and value dependencies of an industry can help all parties to manage and pool their resources in better ways.  But the starting point for cooperation and re-alignment of resourcing approaches is the fundamental capture of community learning insights.  The difficulty of making such a project work is that cooperation and goodwill becomes a critical success factor and rarely in business is this a given unless stakeholders are aware of the return they will get for their contributions.  This can create chicken and egg dilemmas that are difficult to overcome. 

Fortunately, the new business intelligence tool-kits appearing on the market reduce the time-to-value of business intelligence projects so that less has to be invested prior to the ROI of rewards being qualified. Which of the above capabilities of BI offers the best ROI?  That’s very difficult to answer.  Each one of the capability areas can produce great results and give high returns but much depends on the specifics. Community learning insight projects are without a doubt harder to kick-off and there are wider political/social challenges to overcome. Operational analytics projects are easier to impress folk because the data they surface is already known to some extent and the role of BI can be to make this data more palatable – but project leads may well be presented with barriers to change because people feel they can already do what BI can offer (until they see the power of the insights!!). For organizations that haven’t previously been able to formalize and articulate their strategy, and measure their progress towards it, can find enterprise performance strategy insights deliver a major transformation in operational effectiveness. I find the most exciting area of BI is the sourcing and delivery of actionable insights because it always provides hope that executives will originate a game-changing idea, a new question or a new answer.  Honestly though, it’s without doubt the most difficult area of BI when it comes to evidencing ROI.  

How do you convince business leaders to invest in the hope that they might come across a game-changing ‘something’?  For this reason, it makes sense to harvest value from all four sides of BI when building a business case. I hope you found this article useful.  Let me know if you do ;-)