Lionel Terray, a French mountain-climbing legend, said: "The mission of a mountain guide is not to perform formidable activities, but to enable normal people to achieve climbing targets they would not be able to accomplish without his help. Mountain guide, walking at the head of his group, is almost like the first person next to God, as he has the life of people who fully trust him in his hands. He makes decisions. He accepts responsibility."
When it comes to climbing the mountain of business intelligence (BI) success, do companies regard the role of the 'mountain guide'? Or are they na"ive enough to think they can summit this hill in their stride?
I've previously written about the waves of BI value, illustrating the incremental return one can expect from a BI solution as it organically matures. More recently, however, I started to grapple with the question of how one can influence and steer this organic maturing process more deliberately. I mean, you don't just pitch up at the foot of Mount Everest and start walking, do you?
Leading the way
Don't get me wrong. By 'guide', I'm not punting the use of BI consultants here. No, I'm punting the value of having a guide, someone or something that clearly points due north, according to which a company can navigate its journey to mature, high-value BI.
The guide needn't even be settled in a specific person. However, the guide must be manifested in a well-defined, thoroughly researched, and extensively debated and ratified strategy, drafted according to all the best practices one would employ to create a corporate strategy.
So, how does one draft an effective corporate strategy? There are a diverse collection of methodologies for corporate strategy definition, but ultimately, all of them come down to the following basic principles:
Macro-economic analysis
Macro-economic analysis is all about understanding the economic outlook globally as well as locally to ensure any planned capital expenditure can be sustained, and that a company isn't exposed to financial risk. Three key macro-economic indicators are GDP, unemployment and inflation. Research the economic forecasts for these indicators, and then relate it back to the impact these indicators' trends may have on the company's financial position.
External analysis
External analysis is about scouting the environment in which the company operates. Get a clear understanding of the local industry in which it operates, as well as the BI industry in SA.
Following Porter's five forces, during external analysis, research has to be done to answer the following questions:
What are the competitors doing with BI? For BI to provide ultimate business value, having a BI solution that provides a competitive edge should be one of the corporate strategy's objectives. In that case, understand how other companies in the same industry leverage BI to understand what one should be doing to be on par with competitors, and then potentially identify innovative opportunities for creating a competitive edge.
What is it my customers expect or demand? Get a clear understanding of what the customers want. During this research exercise, it is important to survey the end-user landscape on a high level. Focus on understanding the capabilities needed in the various business divisions, and especially the BI capabilities that will support or enable achieving corporate strategic objectives.
What is it that BI vendors have to offer? Once the BI capability requirements are understood, start researching and short-listing BI vendors whose offerings effectively address the requirements.
What are the alternatives to a traditional BI solution? In understanding the capability requirements, it is prudent to also consider alternative ways to meet the requirements than a robust BI solution. In defining a BI strategy, one cannot blindly assume that BI is the only way. It usually is the best practice way for meeting requirements sustainably, but carefully researching alternative solutions will inspire innovative thinking.
What is the threat of new entrants? The research of the four previous forces would have already spurred thinking about all of the capabilities one envisions to include in a BI solution. Now it's time to ask the validating questions: (1) If these new capabilities are not currently done by the competitors, why not? And (2) How difficult would it be for the competitors to copy the company's capability within the next two to five years? Being able to answer these questions allows one to clearly estimate the real return on investment.
You don't just pitch up at the foot of Mount Everest and start walking, do you?
External analysis brings one halfway through the strategy definition process. At this stage, the mountainous terrain has been clearly surveyed and one has a good understanding of what the environment is like and what is possible. One has no idea yet whether the vision that has begun to formulate is at all feasible and within reach, until the company starts to understand its own capabilities and what it needs in order to effectively achieve the vision.
The next phase of 'internal analysis' starts turning the focus inward to one's own capabilities to deliver. What should a company consider during internal analysis and how should the company do this? Be sure to look out for part two of this Industry Insight.
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