Business Intelligence – Is it a waste of investment?
Unfortunately, this question has come back to haunt us during this recession when budgets have got cut significantly or flattened in the best case. The axe has fallen on many BI projects due to perceived lack of immediate ROI. When the think tank of an organization sits down to scrutinize the budget, the one question that gets raised for BI initiatives is – “If we don’t do this, is it going to stop the trucks from rolling?”. The answer is of course a NO.
But nobody goes beyond that. If I were facing them, I will ask the following questions in return to the first question.
- The trucks will not stop, but do you want to lose an opportunity to efficiently use them and maximize ROI?
- In these difficult times, do you want to intelligently source and reduce your cost?
- Do you want to improve your operational efficiency thereby reducing the cost of goods sold?
- How well you know your customers?
- Do you know a better way to do the above?
I will be surprised if I hear a Yes to any of the above questions.
During tough times like this, every organization is struggling to keep its neck out of water and is confronted to decide what to do to stay in the business. Stopping ongoing projects appears to be a tactical move, unless it is done intelligently. One has to scrutinize the impact of the ongoing projects and even if it means spending more money in the short term, but if there is a case for a good ROI and competitive advantage in the medium to long term, thought has to be given before chopping the line item of the budget.
Unfortunately, business people who rally for BI do not have the ability to demonstrate the need for continuous investment in BI. While championing for BI, one has to analyze the data and substantiate the claim that BI will have a positive impact on the business. If the so-called champions of BI themselves don’t understand the power of data or don’t know how to use the data to make a case, how will it succeed in fighting the cause for more investments in BI?
Now that the problem statement has been made, how do you overcome this?
I am a strong believer in creating a dedicated BI organization. In many organizations, there is no dedicated BI unit and even if there is one, it is usually under the IT department. The champions of BI have to come from the business units and IT should be one of the supporting units (more from a technology stand point). This team should be able to understand the needs of the business and prioritize them based on their respective ROI. Most organizations try to create a virtual BI team by time sharing people from various business and IT units. This is bound to fail since there is no focused effort to uphold the objective of business intelligence in that organization resulting in the perception that BI is not an effective avenue for investment.
Power of data
During one of my conversations with a business executive of a Fortune 100 company, he remarked “The biggest asset any organization can have is its own data”. How correct was he? By doing business day in and day out, we create so much of data and sadly, we don’t understand the value of it. We look at the data in a very transactional way like the way we read a daily newspaper and throw it in the recycle bin. If there was no legal requirement for companies to store data for x number of years, I bet most of the companies will prefer to delete those transactions which are “closed” from their standpoint. Only few organizations that understand the power of data a.k.a business intelligence leverage the available data and provide a very powerful mechanism to its associated for their decision making. These organizations cut out from the rest since their decisions are based on intelligence and not pure gut-feel.
Intelligent Investment
The haphazard way of deciding on BI projects has also paved the way of this general perception. Just because the company has an EDW with all its data doesn’t mean that users can demand multiple, thought less reports. Creating a report involves time and money and proper thought has to be given on the need of the requirement before deciding one way or other.
In essence, the battle of proving the efficacy of business intelligence continues though we have made quite a few strides in the past few years. I am hoping for the day when BI initiatives get in to the “must-to-do” list of each and every organization.
Comments
Thanks for the article. Gives good insight. From a technical and SAP point of view, BI is considered to be hottest, and there are a lot of requirements in market, going by this, it certainly seems companies are taking it seriously, and data and information analytics is by its sheer nature going to be in demand always! :)
Posted by: rohit khetarpal | January 28, 2010 11:22 PM