Whenever the importance of Business Intelligence (later BI) or business analytics is discussed with business leaders, you can see heads nodding in silent agreement on its necessity. It might even be so that some urgency is created, some ideas bought and taken forward.
However, the harsh reality is that in BI initiatives, cost alone is often a decision factor. Or even worse, the whole development agenda is appointed to IT. Or worst of all, it is initiated by IT!
Frustratingly enough, BI is mostly seen as a cost creator rather than the value creator that it truly can be.
With all the cost talk, the real purpose of BI is often forgotten.
″ The sole purpose for BI is to create business impact.
Whether it is to gain financial or operational control, to simply do smart decisions, to gain advantage over competitors or to use data to create new business opportunities, BI is ALWAYS a business matter, not an IT. After all,
″ It is Business Intelligence, not IT Intelligence.
Do not get me wrong. IT plays a big role in business analytics. But the role is an enabler, not as owner or initiator.
BI must be driven by the business
To gain a true value through BI, it must be business driven, every decision based on creation of impact and value into business. Not letting costs or other restrictions be the main drivers.
Although difficult to achieve, this can be done. Obviously, there is a lot more to it, but keeping in mind a few basic principles you are on your way to success:
1. Alignment with the business strategy
BI should always be a strengthening element in the business strategy as well as in the development and transformation of business. BI strategy must be derived from the business strategy and support it on every step forward.
2. Business impact = business value
All decisions regarding BI development and use of data should be made with the business impact in mind. What do we want to achieve? What is the value created through BI? If the value gained is larger than the cost and effort, then it is a no-brainer to head into the direction you have chosen.
3. Business ownership = business investment
When initiative is created through the impact on business, the ball is in business’ end of the court. The endeavor should be driven by business, guided by the business impact and carried out as a business investment. IT costs simply are an investment from the business point of view, not only created by IT.
A good way to invest in business analytics and start driving for the business impact is to hire an experienced CDO (Chief Digital Officer) – a key player in developing company’s use of data and architecture to create value and business impact.
4. BI champions and external advisors
Successful implementation of a company-wide mindset of utilizing data and analytics to create business impact is not achieved easily. Even if you have a clearly defined BI strategy, or a highly competent CDO in position, it is crucial to find forward thinking individuals with passion for analytics and focus on value – within the company as well as experts outside the company.
BI and analytics need champions to take ownership: to take action and to preach the good word about value-driven business analytics to the whole organization. These irreplaceable individuals are needed both in business functions as well as within IT!
5. IT as an enabler
Finally, as stated previously, IT plays a big role in business analytics. At best, IT works as an enabler for a business impact. By taking a service-oriented role, IT can partner with the business and support development with the optimal solutions, architecture and ways of working that enable business growth and value creation.
“Traditional” IT-initiated solutions can solve individual problems in certain points of time, but a smart IT organization aligns themselves with business objectives and creates means to achieve them now and in the future.
Targets set step by step for best results
Harnessing the full value of BI and analytics can be a long journey, but an important one. Not every company wants or is able to take it all the way, but it is good to keep in mind that value can be realized on many steps on the way. In fact, you should never cross the finish line – just set new targets when reaching previously set milestones along the path.
Mikko Eriksson is a Head of Business Analytics within Capacent in Finland. He has over ten years of experience in Business Intelligence solutions in various industries and functions, e.g. within IT, Finance and Commercial.
If you are wrestling with translating data into insights or simply do not have the resources to do that, do not hesitate to contact Mikko for more information on how we can help you to create sustainable value in your business.