June 21, 2017 | Written by: Michelle Reinhold
Business (Lack of) Intelligence
Business Intelligence (BI) entered the popular business lexicon in the late 1990s, and has grown to such prominence that there are entire careers and service industries centered around business intelligence, and how it can give any organization with the resources a huge competitive advantage.
With the sheer of amount of data that an organization generates on a daily basis, especially if that organization has implemented an integrated Enterprise Resource Planning (ERP) platform, does BI need to be a central part of the organization’s decision making?
The answer, of course, is yes. Knowing how an organization is performing is critical to its decision making process. However, that Yes comes with quite a few caveats which are highly misunderstood. A common mistake about BI is that it is somehow a magic bullet that will shed light on why the organization is making/losing money, how to improve its service offerings to attract more customers, and give it a competitive advantage.
In a nutshell, BI is simply one more tool available to the organization’s decision makers. Business Intelligence, by itself, does not answer the “why” to questions regarding past or future performance. It merely provides insight into what has already occurred (the “what”). It can offer a data point, no more or less important than the experience of the decision makers who take it into account.
A common mistake that an organization may make when implementing BI tools and processes is a fundamental misunderstanding of what BI is intended to accomplish. When a resource exists to create the custom reports and analytics tools against the data an organization is generating, the desire to keep those resources busy can be overwhelming. So overwhelming, in fact, that the focus on BI shifts from quality to quantity.
It is not uncommon in most organizations that the deluge of reporting available can have the reverse of the intended effect. Instead of providing decision makers with quality information to feed decision making, time is spent reviewing reports with little or no value, generated and consumed simply because someone with the authority to commission them thought it would be beneficial.
A good starting point when determining whether to spend resources on a BI deliverable (such as a report, dashboard, etc.) is to ask oneself: how does this fit into our decision making process? What is the fundamental “what” that the deliverable is meant to convey? If the answer is “because I want to see Equipment status” then that is probably not a worthwhile endeavor to spend the resources on if there are other pressing matters. If the answer is “to determine the time equipment is spent idle on a job site over a span of time”, then the organization is on the right track when it comes to utilizing their BI resources effectively.
Issues such as using BI to simply report business data instead of using it to answer specific questions tend to arise frequently when discussing how BI can provide insights for decision making. Simply knowing exactly what occurred does not always equate to know why it happened. Business Intelligence should not be considered an end all solution, and it should not be held to such a high prominence that BI becomes the decision maker, rather than a data point for the decision makers.