June 20, 2009 by niallhannon
dilbert on business intelligence
Business Intelligence (also known as BI) is probably one of the most oversold areas of IT.
There is no doubt you need information to make decisions but too often a mystic, voodoo magic blanket is drawn over what should be an easy to understand topic. Consequently the big vendors of BI charge through the roof for their solutions.
You are convinced, rightly, that you need information but in most cases you do not need a hugely complex and expensive system to provide and analyse that information.
The important starting point is to have database systems in place to manage your core functions. You might already be using systems for CRM, HR, Finance and so on. If you are using spreadsheets to manage core parts of you business you are going to struggle. Spreadsheets are a good tool but they are no match for a properly designed database system.
So, what are the goals of business intelligence?
- Todays Information
- The first goal is to accurately provide information on what is happening across your business today. This is the hardest part as you have to make sure your systems are in place and are producing the correct type of information. If you want to track your sales per regional office for example then you have to make sure your systems are capable of capturing that type of information.
- Trending the Information
- Now as your data builds up in your systems you can start to trend it over time and compare it. There are some very specific issues to overcome if you wish to do this accurately. Your systems need to be able to accommodate for changes over time. For example, an employee may move from one team to another over a 2 year period and you need to ensure that all their related sales information is categorised across their old and new team correctly.
- Benchmark Comparison
- This is where the value of business intelligence begins to grow rapidly. By setting goals, targets, and benchmarks you can track the performance of your company against expected results. How are sales doing against target this month?
- Tomorrows Information
- The holy grail of business intelligence is to make inferences and predictions based on historical data. Depending on your type of business this is either going to be a reasonably valuable tool or completely useless. And for the vast majority of companies it is the latter. It is dependent on having very large amounts of data that is very well defined and very accurate. I am sure the likes of large telecoms companies and scientific institutions are playing around with this aspect of business intelligence.
- External Comparison
- A hugely beneficial but rarely achievable side of business intelligence is the comparison of your information to other companies in your industry and other industries. The problem here is the lack of reliable information that you can compare too.
If you have achieved the first two stages above you are in a good position and ahead of a lot of companies. If you are hitting stage 3 then you are in a stronger position. Getting to even the first stage requires planning and you have to implement the right systems in the right way. The “garbage in, garbage out” moto is one to take seriously at a very early stage.
Just remember that you do NOT have to blow the IT budget to achieve this.
