Business intelligence has long been about spitting out data - often irrelevant and outdated - to a few big bosses. But today's BI is both more meaningful and more egalitarian. And it requires ever tighter alignment between IT and the business.
Reader ROI
- Why the traditional roles of BI technology are no longer valid
- How to reorganize BI projects to deliver more value
- When business processes should be changed to take advantage of BI
Jim Honerkamp, CIO of Hillman Group, is proud of his new Business INtelligence (BI) system. And why not? It's much better than what came before. In the bad old days, executives looking for sales information, for example, had to ask one of Honerkamp's programmers to make a manual database query to pull the numbers from the company's legacy systems. The lag time made the charts "stale the minute they came out", according to Honerkamp, whose company is a $US380 million manufacturer and distributor of engraving technologies and hardware such as keys and signs.
But with Hillman Group's new BI system, curious business executives can query the system themselves and get instant answers about such critical questions as the number of unfilled customer orders, which is tracked by the system in real time.
There's just one problem.
The new system hasn't made the business better - at least not yet - only better informed.
That's generally the problem with BI, the umbrella term that refers to a variety of software applications used to analyze an organization's raw data (sales transactions, for example) and extract useful insights from it. Most CIOs still think of it as a reporting and decision support tool.
Though the tools haven't changed much recently, there is a small revolution going on in the ways BI tools are being deployed by some CIOs. Done right, BI projects can transform business processes - and the businesses that depend on those processes - into lean, mean machines. "Today, the big potential for BI is using it at the operational level to improve business processes," says Colin White, founder and president of consultancy BI Research.
For example, Steve Phillips, CIO at Avnet, a computer systems, component and embedded subsystems manufacturer, has used BI to improve the performance of the company's sales and customer service processes. At Quaker Chemical, CIO and VP Irving "Bubba" Tyler, has used BI to help transform the company from a regional operation to a unified global business.
Quantum Leap
But taking BI to the next level isn't easy. It requires a change in thinking about the value of information inside organizations from the CEO down, says White. Information is power, and some people don't like sharing it. But sharing is vital to this new vision of BI, because everyone involved in the process must have full access to information to be able to change the ways that they work.
Another problem is the BI tools themselves. Though the tools are more scalable and user friendly than they used to be, the core of BI is still reporting rather than process management, although that's slowly beginning to change, says White.
Finally, the other major impediment to using BI to transform business processes, according to White, is that most companies don't understand their business processes well enough to determine how to improve them. And companies need to be careful about the processes they choose. If the process does not have a direct impact on revenue or the business isn't behind standardizing the process across the company, the entire BI effort could disintegrate. White says companies need to understand all the activities that make up a particular business process, how information and data flow across various processes, how data is passed between business users, and how people use it to execute their particular part of the process. And they need to understand all this before they start a BI project, if they hope to improve how people do their jobs.
No Looking Back
Reaching beyond BI's traditional decision support mode is difficult, but CIOs can get there. They can use some of the recent improvements in BI tools - such as easy-to-read dashboards and guided workflows that help users understand how to act on information and how to incorporate it into their day-to-day activities - and use those improvements to sell the business on making the project more focused on business transformation.
To do that, CIOs are using the improved scalability of the tools to roll them out as widely as possible - not just to bosses, as in the old days. For example, 40 percent of Quaker Chemical's 1200 employees are active, registered users, according to Tyler. "Our big program at Quaker Chemical has been to make these tools and capabilities available to as many people as possible and in as simple a way as possible so they feel comfortable incorporating it into their routine workflows," he says.
The new, greater scope of these BI projects gives CIOs a strong justification for working with the business to study processes and determine how these tools and the insights they provide can support and improve them.
Companies that use BI to uncover flawed business processes are in a much better position to successfully compete than those companies that use BI merely to monitor what's happening. Indeed, CIOs who don't use BI to transform business operations put their companies at a disadvantage. For CIOs who have carried out this difficult strategy successfully, there is no looking back.
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