Happy New Year! I hope everyone got some much needed R&R! With the holidays now (sadly) in our rear-view mirror, it’s time to move forward again with our commentary and insights on today’s key business challenges. This time, I want to discuss business intelligence.
Business has fundamentally changed in the past 20 years. Users are closer to their customers and need to be able to retrieve and analyze their own data dynamically and independently, instead of being forced to submit queries to IT and then receive technical, and often unhelpful, green-bar reports on a weekly or monthly basis.
Business intelligence – the organization and extraction of useful business information from diverse and dauntingly large operational data sets – has become a business imperative, particularly for finance leaders and professionals.
A top technology priority for chief information officers, the harnessing of business intelligence (BI) also ranks among the top priorities for CFOs for 2014, according to our 2014 Finance Priorities Survey.
As you might guess, this is no small area: The market research firm Gartner estimates the global BI software market at $14 billion, and predicts that it will grow to $17 billion by 2016.
Since the 1990s, demand for data-mining tools has exploded, initially with the IT-driven elimination of departmental data silos and migration into enterprise programs, and more recently with user-driven demand for real-time, or near-real-time, business information. Most of us have seen first-hand that advances in desktop memory and processing speeds make sophisticated, real-time data analysis possible. And big data is promising to leave the old spreadsheet and green-bar culture far behind.
At Protiviti, we embrace this era of user empowerment, but as Stan Lee, the creator of Spider-Man, famously wrote: “With great power comes great responsibility.” BI is not a simple process. It requires careful analysis and alignment with organizational strategies and metrics.
With so much data now instantly available, finance functions and organizations, in general, must develop a clear vision of which business intelligence is relevant. Otherwise, they risk overwhelming employees (and executive management and board members) with noise no one wants. In addition, it is important that the data itself be properly curated to ensure its reliability. The old adage – garbage in, garbage out – still holds.
BI must be harnessed to ensure that the right information from the right sources is delivered to the right employees at the right time. This requires proper training, coordination and execution.
Protiviti offers an excellent overview of these challenges in our point-of-view paper, “Business Intelligence – Addressing Challenges for Organizational Adoption,” which I encourage you to read. And in the article “Harnessing the Power of Business Intelligence,” Chief Executive Magazine offers the following five steps to successful BI:
1. Align technology with corporate strategy. Just because you CAN do something doesn’t mean you should. Make sure your BI software is supporting the right activities. A good BI strategy begins with the end in mind. Ask: Who in my organization is hampered in their decision-making because they lack good and timely data?
2. Identify key performance indicators (KPIs). A surprising number of executives can’t agree on business-performance metrics. BI can help you get information faster, but you need to agree on what you want to measure, or the only thing you’ll be getting faster is incorrect or useless information.
3. Vet your vendors. Have your own experts evaluate potential BI solutions. Vendors are likely to gloss over weaknesses in their effort to get to “yes.” Your internal experts are in a better position to determine which of the solutions will deliver the answers you need, to the people who need them, in a timely and actionable form.
4. Be disciplined. When companies first discover the power of BI, there is a tendency to want to query everything and provide an over-abundance of information. The most successful BI users are the ones who are disciplined enough to curb their enthusiasm and stick to clear goals and metrics.
5. Believe in your people. Part of the power of BI is that it pushes actionable information down to the line level, empowering employees to make better decisions. That kind of autonomy can be disruptive to a large organization accustomed to viewing lower-level employees as assets to be controlled. If you are going to provide your employees with a tool, don’t be afraid to let them use it.
Along with the Protiviti POV paper noted earlier, we’ve published a series of informative white papers that discuss the value of leveraging BI to become an “early mover” in your market and industry. Visit http://www.protiviti.com/earlymover for more information.
What’s your experience with Business Intelligence? Any advice or help for peers headed down that path? I’d love to get your thoughts.