Why DonBy CIOinsight | Posted 05-15-2003
Business Intelligence 2003: Are Your BI Systems Making You Smarter?
- 60% say they're poor or fair at making BI accessible to employees
- 66% believe it's critical to analyze and report operational data in real time
- 71% believe technology can effectively structure unstructured market data
- 81% of companies plan to increase their business intelligence efforts
With almost two thirds of companies making organized efforts to collect, analyze and distribute business intelligence, the discipline is now firmly entrenched in the mainstream of corporate processes. But all is by no means perfect yet. According to the more than 570 IT executives who responded in February to our first survey on business intelligence, the effort to collect and analyze internal performance information scores highest in both usage and satisfaction, with customer intelligence efforts second and competitive intelligence third. As with many business technologies, our respondents are comfortable with the accuracy of the information they collect, though they report greater success at analyzing the information than at gathering it or distributing the results to executives. And just two thirds of our respondents' business colleagues are satisfied with the information they get. Business intelligence has already proved to be a powerful tool for analyzing information critical to corporate strategythat's why most companies plan to increase their BI efforts. The next step is to make sure everyone gets the information they need.
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't More Executives Use Business Intelligence?">
Why Don't More Executives Use Business Intelligence?
Is the business intelligence glass half full or half empty?
That's what we were wondering as we mulled over one key finding from our survey on BI: Just 42 percent of executives regularly make use of the information available through their BI systems. But is that high or low? Should far more executives be using this information? If so, what is holding them back? Or does 42 percent mean that the executives who should be using this information are doing so?
Conversations with BI experts and CIOs have us leaning toward the view this glass is half empty. "Forty-two percent is kind of pathetic," says Laurie Orlov, a research director who covers BI at Forrester Research Inc. "What's the point of having these tools if people don't use the information?"
Indeed, experts say too many executives are missing the opportunity to use this information to spot problems and trends, and make decisions. "I see no reason for exception, unless you are running a candy store," says Howard Dresner, Gartner Inc. research director for business intelligence.
To avoid paralyzing disagreements over which set of numbers is accurate, all executives need to look at the same information. "Proliferating spreadsheets is a huge problem," says Wayne Eckerson, director of research at the Data Warehousing Institute, a Seattle-based association of BI and data warehousing professionals. "Every analyst creates their own little world in a spreadsheet, with their own information and definitions. Companies spin their wheels trying to figure out which spreadsheet represents the right view of the world."
By and large, the IT executives we spoke to agreed that all executives should be using BI information. Donald Radle, CIO of RentWay Inc., a rent-to-own home furnishings retailer in Erie, Pa., plans to replace an aging system that has achieved only 20 percent usage. "I'm hoping everyone will use the new system," says Radle. "It is the only way for executives to know how the business is doing in a timely, accurate fashion."
Clarence Cannon, vice president of information technology at bedding manufacturer Serta Mattress Co. in Vacaville, Calif., says revenues have increased 20 percent to $50 million in the past two years, in large part because usage of the information from the company's BI system has jumped from 30 percent to 100 percent of executives. Executives have spotted opportunities to increase production of more profitable mattresses, drop unprofitable lines and reduce expenses. Total usage is important, so that "everyone is on the same page [regarding what data to look at]," says Cannon.
Only one IT executive said 42 percent was an appropriate number. According to Damien Bean, a former consultant who is currently vice president of corporate systems at Hilton Hotels Corp., business intelligence data is most needed by senior executives involved in operationswhich he has found tends to be about 40 percent of all executives.
Why don't more executives use this information? Skepticism about the quality of the data, and failure to provide information that relates to their responsibilities in a convenient way, are major stumbling blocks. Also, some tools are too complicated and executives often aren't taught how to analyze the data, according to the Data Warehousing Institute's Eckerson. "If [executives] can't analyze the data, and don't know what to do with the data, they won't use the data."
For example, at Serta, each executive used to receive the same 20-page printed reports; most ignored them, says Cannon. Today, each executive receives a five-page, personalized report, and can receive expanded reports in three hours.
Previously, executives also found data did not match information they had from other systems, casting doubt on its accuracy. The problem was that certain systems defined data differently. Some sources, for example, counted billings as revenues; others did not. "We had to get everyone to agree on how to define information, what source to get it from, and standardize the business intelligence system on that," says Cannon. Once accomplished, it was possible to boost usage.
How else can CIOs improve usage rates? Aligning these systems to business needs is critical. For Michael Schroeck, the partner in charge of IBM Business Consulting Services' business intelligence practice, the No. 1 rule is making sure the people responsible for the BI system understand exactly what information executives need to run the business. Experts also suggest working with the CFO on metrics; providing digital dashboards and real-time customizable alerts; and gaining visible executive support.
If there's a silver lining to the 42 percent usage rate we found, it's that it represents an improvement over previous years. Usage is up, says Colin White, president of Intelligent Business Strategies in Ashland, Ore., because "we're much better at collecting and capturing the business information executives need." Still, he concedes, "we could do a lot better than 42 percent."