New Zealand Business

Business intelligence

Business Intelligence is one of those terms that the cognoscenti think they know the meaning of, but can’t explain. That’s because it means different things to different people. You can pick and choose from the following:

  • Analytics
  • Dashboards
  • Data marts
  • Data mining
  • Data warehousing
  • Scorecards
  • Online analytical processing (OLAP)
  • Performance management
  • Decision support system
  • Reporting
  • Visual display of information

For CDP it is flexible but covers the following:

  • Facilitating the process where data moves to information and finishes with knowledge.
  • Creating the organisational capabilities to turn data into information that becomes a competitive advantage; helps them use their data assets to achieve strategies; and replaces instinct with evidence in the decision making process.
  • The technologies that help Business Intelligence nirvana. For CDP that means the IBM information management technologies. But the technology is a facilitator of Business Intelligence, not its master.
  • Business Intelligence requires technology, but it’s the strength of the soft stuff that is the best predictor of success. CDP favours the Kimball approach, but other approaches will work if they are done well. To be successful you need to follow an approach; be prepared to change; iterate for all you are worth and above all be responsive to business, which means you have to anticipate well.
  • Having a Business Intelligence Competency Centre (BICC) helps as it keeps the system under consideration. All Business Intelligence systems need constant attention; entropy will be the result if they are unloved.

Business intelligence is about extracting good information

CDP takes the broad view that Business Intelligence is about getting good information to decision makers. Essentially to help people explore data, analyse key facts and make decisions based on evidence. This sounds simple, but it means you have to get a whole lot of things right. It’s unlikely that you’ll get everything right first time; the road to successful Business Intelligence systems is paved with learning.

Successful Business Intelligence system developers have an open mind. Within reason, project participants need to ignore sunk costs within reason. It is intuitively obvious that none of us like to think we have wasted money, even if it’s someone else’s. Evidence from the behavioural sciences backs this up; we are all prone to act in a loss-averse manner. In other words, we are prone to be overly optimistic about the efficacy of money already spent. In addition, individuals typically take it personally when a sunk cost hasn’t had the desired affect and are prone to downplay problems. Successful Business Intelligence system developers need to reach the point where they regard unsuccessful aspects of a Business Intelligence project, and the associated sunk costs, as no more than an inevitable cost of success. Employing people or organisations that have already made the mistakes will avoid most of the sunk costs.

It is important to keep sunk cost losses to a minimum by employing the right people; but you should regard any of them that remain as golden nuggets of information that will inform the system as it progresses.

People are often change averse, but successful Business Intelligence systems need to be prepared to make changes, sometimes radical, as the Business Intelligence system is developed. Much like the sunk cost issue, we need to be prepared to change plans, drop treasured components and change our minds. What business users regard as critical one day can be irrelevant to them the next. Just because the business has signed up to a business rule, does not mean it will be sustained over time. Consequently, we need to be prepared to drop or alter rules as we go along. This is frustrating, especially when we think that we’ve captured and formalised the business rules.

The success of these systems is not measured by how well we’ve held to the business rules over time; but on how useful the information is to people now.