Business Intelligence

Is Business Intelligence (BI) Really essential for OD?

Business Intelligence ranges from data about an organization’s performance, through to customer purchasing habits, industry, market and/or competitor analysis.

Once a strategy for Business Intelligence data collection has been developed, the systems provide a rapid approach to having this data for business focused decision making. Measure the wrong things or fail to take into account changes or trends and the data you have is worse than useless – it can lead you down a path which could have a significant impact on your business. One only needs to look at Airbus & Boeing – Boeing thought that the market was changing for smaller shorter journeys, while airbus thought there was a market for larger capacity planes. Airbus’s strategy was to develop a large plane, Boeing’s was to “downsize” to smaller, short hop jets. The Airbus A360 is currently one of the fastest selling jets. Boeing have gone from being “the only game in town” to having to play catch up. Having the data is one thing – accurately using it is quite another.

History of the term “Business Intelligence”

The term “Business Intelligence” is believed to have been made popular by the Gardner group in a report in 1996, The report said:

By 2000, Information Democracy will emerge in forward-thinking enterprises, with Business Intelligence information and applications available broadly to employees, consultants, customers, suppliers, and the public. The key to thriving in a competitive marketplace is staying ahead of the competition. Making sound business decisions based on accurate and current information takes more than intuition. Data analysis, reporting, and query tools can help business users wade through a sea of data to synthesize valuable information from it – today these tools collectively fall into a category called “Business Intelligence.”

Other definitions include:

• “Software that allows business users to see and use large amounts of complex data” – DataWarehousing.com
• “A broad category of applications and technologies for gathering, storing, analyzing and providing access to data to help enterprise users [for example, professionals or knowledge workers] make better business decisions” – Search Web Services
• “Software that enables business users to see and use large amounts of complex data”  – The Business Intelligence and Data Warehousing Glossary
• “The use of high-level software for business applications. More specifically, the collection of cutting-edge technologies that help to make systems more intelligent.” – MIT Sloan School Management
• “Business Intelligence (BI) refers to computer-based techniques used in spotting, digging-out, and analyzing business data, such as sales revenue by products and/or departments or associated costs and incomes” – Businessdictionary.com

This is all very well but it assumes that all business intelligence is software driven and software managed.

The Future of Business Intelligence (BI)

In 2009 a Gartner research and survey paper predicted the following developments in the business intelligence market.

• Because of lack of information, processes, and tools, through 2012, more than 35 percent of the top 5,000 global companies will regularly fail to make insightful decisions about significant changes in their business and markets
• By 2012, business units will control at least 40 percent of the total budget for business intelligence
• By 2010, 20 per cent of organizations will have an industry-specific analytic application delivered via software as a service as a standard component of their business intelligence portfolio
• In 2009, collaborative decision making emerged as a new product category that combines social software with business intelligence platform capabilities

Larry English proposed that a future definition of Business Intelligence be:

Business Intelligence: “The ability of an enterprise to act effectively through the exploitation of its human and information resources.”

This is for the team at RapidBI the most appropriate definition for all working in and around businesses to improve sustainability and (if required) growth. having the data is one thing, knowing how to use it and in what priority order is quite another!

Business Intelligence in SMEs

Many larger firms almost drown under the weight of the data that they collect, so what does this mean for the millions of smaller firms? Is BI still relevant? – of course yes , but we need to be smarter about what we capture and how we use it. One simple but effective strategy is how visitors to our website act and behave, other things include asking our customers and really listening. At an operational level using tools like RapidBI’s BIR can help an organization understand how they are performing. Identifying the correct CSFs and KPIs will also make a considerable impact.

The advantages to an organization by implementing an effective business intelligence strategy are:

1. Increased sensitivity of the needs of the customer
2. Understanding of customer needs and demands
3. Ability to respond to market and customer changes
4. Improved performance and efficiencies within business operations
5. Effective use and saving of financial resources
6. Ability to increase conversion rates with future prospects
7. Appropriate and optimum utilization of all organizational resources (PRIMO-F)

Summary

During the course of running and doing business, the following questions must be asked if we want to be sustainable and competitive. The functions of monitoring, analyzing, and planning are derived from these questions.

• What has happened?
• What is happening?
• Why?
• What will happen?
• What do we want to have happen?
• Where is the evidence of this (each of the above)? – i.e. prove it not just someones opinion

If you cannot answer these questions, especially the last, then the business is progressing without knowing the environment in which it operates, and sooner or later will crash off the road.

NOTE: Increasingly firms in the BI market place are calling or labeling their products “Rapid BI”, meaning quick methods of collecting and analysing data, where our use of RapidBI stands for Rapid Business Improvement – with the focus on action rather than data.

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RapidBI is an organizational effectiveness consultancy based in the UK but working internationally.
© RapidBI & Mike Morrison 2011 - this article/ page is free to copy and use on the condition that an active link back and reference is made to this site and page. Thank you for your understanding and co-operation.

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