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Why Enterprises must make Business Intelligence an Imperative.

By Howard Dresner  
Contributed by Microsoft Corporation


Doing business is information-intensive. Enterprises are being pushed to share information with increasingly more audiences. The business intelligence imperative insists we elevate BI to a strategic initiative now, or risk disaster!

Ignorance is the greatest threat to modern business. The risk of not knowing is immense. And, incomplete information can be even more harmful than no information, because we proceed and make decisions and act with conviction, falsely believing we know the true nature of the situation. Business intelligence (BI) strives to eliminate guessing and ignorance in enterprises by leveraging the mountains of quantitative data that enterprises collect every day in a variety of corporate applications. The BI imperative insists that enterprises pledge to themselves that:

  • They will not go blindly forward.

  • They will equip themselves with perspective.

How can the BI imperative be achieved?

Developing complete perspective requires an intimate knowledge of a business’ many dimensions. Modest-sized businesses, with limited numbers of products, customers, and suppliers, can obtain this perspective without the benefit of technology. All others must rely on technology. This requires leveraging systems that capture the many aspects of the business experience. These systems collect and manage vast amounts of data. The data is growing by as much as 100 percent per year. By extracting data from operational data sources, transforming and integrating it, and placing it into data warehouses or data marts for delivery to users through BI, the same intimacy can be had by any enterprise.

In the absence of BI, a “fact gap” exists: a condition where users make decisions and assess risk and opportunities based upon anecdotal, incomplete, or outdated information. This isn’t much better than guessing, leaving most businesses seriously exposed.

Many enterprises do not tackle BI strategically, despite having valuable data that can tell them about performance, customer behavior, process efficiency, and important trends. Most view BI as tactical-something done at a departmental level or as part of some other application. One reason for this is that strategic BI is difficult to implement. It forces enterprises to reflect upon themselves and how they actually work. Another reason is cultural. Because many enterprises have never really used BI, they don’t realize how it can improve their enterprises and make them more effective and powerful. And, there are those who are afraid of what they might learn!

Enterprises that have addressed strategic BI successfully usually don’t like to tell anyone. It gives them a potent advantage over competitors.

What can I do today?

BI can help enterprises today in at least four areas:

1        Make sense of the business: This is the process of trying to understand what drives the business. (i.e., What trends, anomalies, and behaviors are present?) This is followed by a reasoning process in an effort to organize around these significant trends and leverage them for the benefit of the enterprise.

2      Measure performance and projects: Once you know what to measure, you can use BI to set expectations for employees and help them track and manage their own performance. The budgeting process is an example. Budgets are developed based on the previous period’s data and used to drive forecasts for the future. This is then managed throughout the year and measured to ensure that the forecasted budget is met. Using BI in this context, exceptions can be more-readily understood and built into the system, if needed.

3        Improve relationships with stakeholders: Providing useful information about the enterprise and business to customers, employees, suppliers, stockholders, and the general public increases awareness and fosters consistency across the information chain. By introducing BI to these groups, you can quickly identify problems and address them before they become crises. BI also fosters customer allegiance. An informed customer who is part of the process is more likely to remain a customer.

4       Create a profit opportunity: All enterprises that capture information about their businesses could sell this information to someone. Competitive and legal issues aside, a real profit opportunity exists for most enterprises. The challenge is determining who will buy the information and how to deliver it to them. A growing number of enterprises are realizing the benefits of BI in insurance, leasing, and financial services.

In all of these cases, there is a clear rationale for tackling BI now, and doing so at a strategic level. We strive not only to underscore the importance of BI, but also to provide real actionable advice to get enterprises started on the right path toward BI success!


5       The right mindset: Enterprises must change the way they think about BI and what it can do to help drive the enterprise.

6      The right architecture: Once an enterprise is committed to BI as a strategic initiative, aligning the business requirements with a solid technical architecture is crucial.

7        A solid foundation: BI demands a solid and reliable foundation in the form of a data warehouse. This is among the most-difficult and resource-consuming stages of BI development and deployment. However, without this foundation, BI is all but useless. The best starting point is to recognize the poor quality of existing data and create a strategic data quality program.

Although enterprises may claim to have a data warehouse, few of these could be considered role models. Many enterprises believe that simply moving, simplifying, denormalizing, or summarizing data is enough to qualify as a data warehouse. Conventional wisdom tells us that larger warehouses must be better than smaller ones. However, what is contained in the warehouse is far more important than how much.

Toward a stable market

As BI moves to front-and-center in many enterprises, the market has responded with mixed messages, empty promises, and utter confusion. This makes it exceedingly difficult to choose products and technologies sensibly.

Often, market-induced pressures cause vendors to reposition products to take advantage of perceived (or real) market requirements.

With many vendors pursuing packaged BI applications as a vocation or avocation, enterprises often get misled by sizzling vendor presentations and intriguing demonstrations. Although packaged BI applications might make sense, enterprises must understand all the risks before proceeding or they may end up with less flexibility and excessive costs.

A glimpse toward the future

Although most enterprises focus on near-term implementation, they should understand where the industry is headed and how BI and data warehousing can help them become simultaneously competitive and efficient. Three key trends suggest that BI in the future will be profoundly different than today. The first trend is the need for real-time insight. Second, increased collaboration, as part of a BI process, is often absent today. And, finally, mobile computing is already having some impact upon BI deployments.

Now is the time for all enterprises to raise BI to the level of a strategic initiative. The value to the business is proven. With the right mindset, methodology, and technologies (with an eye to the future), success is likely.

Gartner originally published this report on July 17, 2001.

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