Six Myths About Business Intelligence
An effective business intelligence (BI) strategy is one of the most powerful tools available to companies today. It enables companies to better monitor and track the state of the business by providing the user with actionable information which can lead to better decisions. BI provides for data consistency since it is accessed through a common platform versus the disparate applications (ERP, CRM, HR, etc.) the data is derived from. Thus the information is timelier as it is typically accessed in real-time or near real-time.
BI is really not something new. It’s been around for years in various forms such as card decks, spreadsheets, etc. What’s new about BI is for the first time, technologies have converged where all the data companies have been collecting about their business can now be mined through a web interface for those ‘gold nuggets’ of information that may provide a competitive advantage.
We can discuss the benefits of BI all day, but we want to discuss several myths about BI that may be keeping your organization from pursuing it.
1.“It only involves technology!”
When I see the sales pitches from the various software vendors and system integrators, it looks to me like déjà vu all over again. I remember the same approach in the early days of customer relationship marketing (CRM). Many a company was told “…if you implement this software, you will have CRM”. As we all know, nothing could be further from the truth which was why so many early CRM implementations failed. BI, just like CRM involves changes in technology, processes and people. No amount of technology will fix human input errors without some corresponding checks and balances. No amount of technology will fix an organization’s multiple definitions of key elements such as gross profit. These inconsistencies lead many organizations to spending more time reconciling one report to another versus acting upon the information.
2. “I need a PhD to be able to use it!”
Some of the older tools that provided some intelligence did require someone with an advanced degree in statistical-astro-neural-physics to be able to use them. Today’s tools are a lot more user friendly. Vendors have recognized that “powers users” make up less than 10% of the employees of a typical organization. For BI to be widely accepted, it had to become more user friendly. Many of the BI tools currently available include functionality such as natural query language, which allows the user to query the data in the form of almost regular sentences versus a structured query statement. Some of the tools also include a drag and drop interface which allows a user to just drag the elements needed for the query to a workspace. Many of the tools also have a graphical user interface versus lines of code. It’s like the difference between using DOS versus Windows.
Users are no longer at the mercy of the one person at the company who knows where all the data secrets are buried. Most users with basic computer literacy level can use the tools with some training. Those without a basic computer literacy level may still have to rely on “Bob” to help them analyze the data.
3. “It’s for customer data only!”
BI is for information period. Whether the information is about customers, vendors, manufacturing, financial/compliance or customer service, BI will help your entire enterprise. It presents the single version of the truth about your entire operations, such as:
- the truth about how many widgets did XYZ Company purchase worldwide;
- the truth about the cost differences of parts purchased at the southeast plant versus the northwest plant;
- the truth about production costs nationwide or worldwide;
- the truth about what is the average wait time for customers between 4:00 and 5:00 at the call center in Peoria.
It’s all about truth and you know what the late, great comedian Flip Wilson said about the truth. (For those of you too young to know, he said “The truth shall set you free!”)
4. “It’s all about dashboards and pretty pictures!”
The dashboard visually displays important information on a single screen. It can quickly convey to the user actionable information to monitor the state of the business which is useful in consolidating relevant data from several sources and presenting it visually for immediate absorption. They are great in monitoring and communicating information that helps in the decision making process.
To be effective, you need more than a box of software from “Dashboards Are Us”. The dashboard has to present the right key performance indicators with the right thresholds supporting the red, yellow and green lights. The dials and lights need to be supported by the right data. This data has to be derived from the right processes. The user must also have the ability to drill down into the data to gain a greater understanding. You know that you have rarely created a report that didn’t generate several questions by the people the report was delivered to.
5. “It’s too costly!”
The software can be a bit costly, especially if you get the wrong size solution for your situation. It is important to choose the right tool for your size organization, data elements and business needs. If you have a vendor that tells you they have the right solution for you without evaluating your requirements, then you probably have the wrong vendor.
Your most important investment should be upfront in determining your needs, assessing your data and data quality, mapping your processes and determining the initial state of business intelligence required.
If you still think that’s costly, how much do you think it will cost you if you missed an opportunity, over purchased assets or mismatched future demand with production?
Also, don’t ignore the potential savings generated by a BI program such as the IT costs to maintain multiple technology footprints, time spent reconciling numbers from different platforms or that dedicated person you have just to pull your reports.
6. “I can wait until later!”
You can wait…only if your competitors will never embrace BI. I didn’t think so.
BI can be a competitive advantage for a company if they can better understand their business better than their competitors. If properly utilized, it can help identify opportunities, such as cost savings, efficiencies or process changes that will improve your position. If you are a mid-tiered company, like we primarily work with, you need to be smarter and faster than your larger counterparts. BI is a way to achieve that.
Late adopters of BI will be at a significant competitive disadvantage as BI is more widely used through various industries.
In conclusion, there is no reason to wait to implement a business intelligence program. That old saying about pay for it now or pay for the consequences later has never been truer. The tools on the market are mature since many have been adapted from other intelligence products. If you need help deciding what to do and how to do it, give us a call, we’d be glad to help.
Lastly, understand that BI is a journey, not a destination. As you implement your BI strategy, the more users will become more familiar with it and begin asking for more information. As they get more, they will ask for more. As they get more, you receive more information. Good luck.