Johannesburg, 09 Oct 2008
There is no doubt that the business intelligence (BI) market is maturing. The exit of the last substantial independent vendor, Cognos to IBM, heralded the end of an era. BI is now a commodity offering, and there are very few, if any, customers globally that do not have a relationship with Microsoft, SAP, Oracle or IBM.
They all have a mixed bag of BI offerings, but at the end of the day they are doing the same job. So what is next? Quick BI will no doubt take off - but attention now must be brought to bear on the quality of the decision being made rather than the toolset or the technology.
It is no longer about data quality: that is a hygiene issue. It, like reporting and slice and dice analytics, is a given, and you can`t do BI properly unless you sort it out. It`s a given.
The next area of focus will be looking at the quality of the data from a business perspective. Can the data be used to make the right decisions? The goal of the business must drive shareholder value - selling more products may do this, it may not. Selling more of the right products to the right customers will improve the bottom line - but is it taking the business where you want to go?
What if there are many returns on some of the products or some attract high support costs or high delivery costs? What is the lifetime value of a customer?
The answer changes.
The BI market has been hyping up one version of the truth for a long time now, and still it is not delivering. The data warehouse and OLAP layer do offer one version of the truth - but the balance sheet and profit and loss statement offer another. The net profit for all the products does not add up to the net profit for the company for the year. Likewise, nor does the net profit per customer add up to the profit figure on the financial reports.
The financial reports are the figures the management team are rewarded on and how the market sees the company. Until these figures are aligned, how are businesses meant to achieve their goals? What is the point of going through a laborious, lengthy and painstaking budgeting and planning cycle when you are not really sure how the budgeted figures will really impact the bottom line?
Much has been written about the use of the balanced scorecard and the execution of strategy. Picking the right KPIs is important, but if the numbers are not the same the whole way down the business - from the scorecard, through the board pack to the operational reports - there will always be a disconnect in the execution cycle. It can`t be avoided.
The only way to achieve the real, single version of the truth is to have all of the true costs allocated to the core lines of business at a granular level, usually product and customer. These will then roll up to offer a real picture of the business, and there is no doubt that this picture will differ significantly from the image the managers have of the business.
Once this level of transparency is achieved, guiding the business the right way becomes a true exercise in business intelligence.
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