Everyone wants ‘business intelligence’ (BI) but have we failed to grasp the gap between what the business managers want and what conventional BI reporting delivers? I was ‘socialising’ this point with a former colleague whose views are always interesting (as is his blog) and he came up with a really simple way to express this point. In the true nature of collaboration I added some further thinking to build on his point. As Peter lives in Australia this immediately adds two facts; first externalisation of information / intelligence and second, distance is no longer a barrier to the use of good practice.
You could build on this still further by saying that Peter’s views may be known and successfully applied locally, but in this blog I am gaining the benefit in a market at the other end of the world in which they are still offering unique value. The core of the view, expressed simply, is that the older and more internally focussed information is the less competitive value it provides, and that the term business intelligence today really means ‘the focus on current and external information that affects our business and its opportunities’. You can see his original post here from which the following diagram comes:
Now before I explain this I would like to point out that, as with much else of the existing IT estate, conventional BI remains extremely important, BUT it is primarily there to help establish how well the enterprise is achieving the goals that it has set itself already. Or to put it another way, it is driving forward along the road that we have already built by looking out the back window of the car to see that we are on track as we move forward! That’s a pretty important aspect of business success, but it most decidedly doesn’t help in the identification of any market opportunities that could impact positively or negatively the business plan and budget in current operation.
So in a relatively steady and unchanging market, BI assures success by measuring what needs to be measured and reported in order to ensure the success of the defined goals. I have referred to this as ‘focussed and strong signals’ because the focus and use is clear to all concerned. It’s reporting on what we have decided that we need to know about our internal operations. Unfortunately stability and lack of change are two elements that are conspicuously lacking in the global markets of today. Added to which, social and technology changes are creating new ideas, waves, and markets – almost overnight in some cases.
These are the ‘opportunities’ to achieve ‘stretch targets’, or even to adjust positioning and the current business plan and budget. But the information is difficult to understand and use, as it is comprised of ‘mixed and weak signals’. As an example, we can look to what signals did the rise of the iPod and iTunes send to the music industry. There were definite signals in the market that change was occurring, but the BI of the music industry was monitoring its sales of CDs and didn’t react until these were impacted, by which point it was probably too late. Too late meaning the market had chosen to change and the new arrival had the strength to fight off the late actions of the previous established players.
That’s an example of a big change, but for most, the business intelligence they really want is much more tactically based around identifying and seizing opportunities which are part of their current activities to win more revenue, market share, etc. If we follow the cycle in the diagram from the external side that means being able to harvest weak signals, make operational decisions on choices, and build wining sales responses. All of this occurs before the shift into the book-to-bill cycle to fulfil and at the end the BI report on how the enterprise is performing against budgets.
This requirement has not gone unnoticed by the vendor side, with the snapping up of various BI vendors to add tools to support their new business ‘services’ products that are focussing on the operational element of the cycle. And that’s before we move to the huge number of new players entering the market around the ‘new’ external BI capabilities.
All of this is a far cry from BI reporting, even if it has got more sophisticated in forms and formats over the years. But it is what every business manager dreams of getting to help them through in the volatile, difficult and fickle global markets they have to compete in. The point is that once again it’s moving away from the role of centralised IT and reporting, to de-centralised and specialised edge based business technology. It also means using new products and skills to deliver what is required on one side and supporting flexibility in working practice on the other side to ensure that the business managers can really ‘book’ that extra revenue!