Business Intelligence or Intelligent Business
By Mark Heymann
I remember years ago, before we all had
computers sitting on our desks and
portable phones in our pockets, working
with a company that produced what was
an early version of Business Intelligence
(BI). They called it a "Comparative Statistics
Report," which simply listed all of the properties
in the portfolio and ranked them from
highest to lowest based on some performance
criteria. The result was that no one
wanted to be in the bottom 20 percent of the
list, so actions were taken to improve one's
position so that the next time the report
came out, the operation had "moved up"
from a comparative standpoint. They may
or may not have gotten better, but as long
as they weren't in the bottom 20 percent, the
management team breathed easier.
As time moved on, more data was put into
the lists and more people tried to figure
out how to get better, and what to really
focus on. In today's environment, we have
become more sophisticated and have entire
technologies devoted to BI. And not only
technologies, but entire companies whose
only mission is to improve your BI. With the
advent of the PC, spreadsheets, databases
and real time information, we now have
a proliferation of the smallest detail of
data, sometimes mistaken for information
and frequently confused with knowledge.
Everyone wants to be able to slice and
dice and reformat this morass of data to
try to complete
some analysis
that may help
explain what
is going on in
one's business
or show the way to that yellow brick road
to Oz (improvement). I can't even count
the number of times I have been told that
"My boss needs an analysis yesterday so I
have to extract the data to Excel, format it,
and complete the analysis, all at a moment's
notice." As if a day's delay mattered if it
meant not only more accuracy, but knowing
what to do with the knowledge.
I'm sure most of us have spoken of, or heard
of, balanced scorecards and benchmarking
performance. All very interesting concepts
when applied to the process of business
performance improvement. But that is the
key: APPLYING the newly found knowledge.
Unfortunately, we frequently find that the
report is treated as the goal or end result,
not the application of the information
that is contained in the report. So what
I frequently ask is: "Are you looking for
Business Intelligence or More Intelligent
Business?" It is the latter that changes
performance. The former is only a means
to the improvement process. While having
more business intelligence can at times
be helpful, albeit overwhelming at times,
teaching management how to interpret that
information for improved business results is the
real goal.
To do the above, your BI must present cause
and effect results, not just static data. To run a
business more intelligently, one has to have a
greater understanding of the actions that cause
improved results and how to affect necessary
change. Some are more easily done than
others, but happily there are analytical tools
that convert information into knowledge that
can be applied to your business. Correlation
analysis is one kind of tool that can help
an organization understand cause and effect
while helping to apply limited resources to the
most impactful undertakings.
I won't go into too much detail here regarding
some of these analytical techniques, as some
are contained elsewhere in this publication and my goal is not
to create bedtime reading.
I would say though, that
as an organization fully
develops its BI system
and processes, care
should be given not to
produce so much data that
real knowledge of critical
issues is difficult to discern.
Additionally, different
parts of the operation
require different sorts of
intelligence, so one should
spend the up-front time to
ensure that only the necessary key metrics are presented.
Finally, high level variance analysis, whether from standard
or from the average, as an example, should be the starting
point by which management decides how far into the data it
wants to go. This approach should be a key component of
any BI system.
While tools to crunch numbers are readily available,
the transition from the numbers to applied knowledge
may not be as easy but should be the key focal point of
senior management if the BI tools are to lead to more
Intelligent Business Operations. One should focus on IB
not only BI.
Keep the wind in your sails,
Mark Heymann, ISHC
UniFocus Chairman & CEO
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