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Justification of BI

Managers are looking at the value of information to take advantage of business opportunities and ensure sustainability.

Martin Rennhackkamp
By Martin Rennhackkamp, Business intelligence specialist of PBT Group.
Johannesburg, 28 Oct 2010

As the business landscape becomes increasingly complex, managers not only want to - but also need to - know more about their business, customers and competitors to compete effectively.

With a fluctuating economy and changing inflation rates, it is difficult to forecast business prosperity with segmented information - as it is only 'good quality' information that can guide a business in its strategy. In fact, research undertaken by Gartner* indicates that by 2012, more than 35% of global companies will fail to make informed decisions about changes in their business and markets due to a lack of information, process and tools - meaning this subsequent 'impact trend' will only continue for South African-based businesses.

As such, businesses have begun to realise the need for decisions grounded in well-substantiated information. Where previously, businesses worried about the size of their data warehouse, today it is not about quantity, but rather quality.

Priceless

Managers are now looking at the value of the information so they can take advantage of the windows of business opportunity and ensure sustainability. Consequently, businesses are not only interested in data or information; they are searching for valuable intelligence on which to base key strategic decisions.

Given the above and despite the global hype, coupled with the fact that virtualisation, cloud computing and Web 2.0 are seen as the top three priorities for CIOs around the world, South African CIOs feel differently and are not yet considering these technologies as a top priority for this year. Rather, Gartner points out that South African CIOs rank business intelligence (BI) as their most important priority - and it's easy to see why!

Businesses have begun to realise the need for decisions grounded in well-substantiated information.

Martin Rennhackkamp is COO of PBT.

BI not only provides businesses with the ever-elusive competitive edge, but is also seen as a risk mitigation tool - and certainly these two are key in today's business environment. An important task, however, when considering BI, is to ensure that BI tools are implemented correctly, so the business can get the process of BI right - taking full advantage of the benefits BI offers. But what does this involve, what needs to be considered and how can a BI solution provider assist?

One of the first steps towards implementing strategic BI into an organisation is to deploy BI within all layers of the organisation. Implementing data integration to bring together data from different sources to provide the organisation with a unified view is also a strategic move an organisation has to make when it comes to its BI process. Understanding the core importance and value of implementing BI, and more importantly, where BI needs to be implemented into the organisation, the value expected and measurement criteria of return on investment of the BI solution, should be the starting point for any organisation considering this solution.

Prized assets

It is also important to be cognisant of the fact that BI solutions offer an organisation more than just capturing data, but rather the ability to turn information into a useful asset, from identifying and reacting to problems, to anticipating opportunities within the organisation. A BI solution can help an organisation determine areas within the business that are not performing. Through this identification, companies are better able to implement corrective measures as soon as problems are identified, offering a quick turnaround - an aspect that is key to any innovative and dynamic business model, not to mention cost optimisation, business efficiency and customer satisfaction and retention.

The challenge, however, is that of ownership versus custodianship. Just as nobody really owns the finances and human resources of an organisation, likewise, nobody 'owns' the data warehouse - which enables such a dynamic business model - but someone should be responsible for it.

The CIO should be that custodian and main person responsible for the information resource of the organisation, therefore ultimately responsible for the data warehouse and the BI competency centre. And just as sales, marketing and finances, for example, have various key performance indicators (KPIs) as a measure of performance management, every CIO should have his/her own dashboard to track KPIs, which relate to data quality, information penetration into the business, report usage and timeliness of data. But how can CIOs deliver the right information to the right people? The answer is simple - by focusing on relationships - especially with those key information users in the organisation.

As the competitive environment changes, so too does the role of the CIO. Today, the CIO position is one of leadership and visionary. CIOs now need to make sure they view information as an organisation resource (that can directly affect its profitability) and that this resource is acknowledged, understood and adhered to throughout the entire organisation, and certainly a BI vendor can assist with this.

Business intelligence has certainly made its mark on most organisations operating within the South African commerce sector over the past few years, and has reached a new level of importance for decision-makers. Comparable to finances, HR and other organisational services, information is an enterprise-wide resource and should be funded and treated as such. If it is understood, implemented correctly and embraced with the organisation - the value that BI brings is certainly justified in its own right.

* Gartner Reveals Five Business Intelligence Predictions for 2009 and Beyond

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