BI's Corporate Challenge

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Originally published on the Microsoft CIO Network.

By Paula Klein, TechWeb

After a decade of efforts, effective, corporatewide business intelligence still remains an elusive goal for many large enterprises today.

It’s not a lack of resources or technologies that is holding back BI progress — spending is a high priority at many businesses despite tight budgets, and new social media platforms are generating more customer data than ever. The biggest shortcoming seems to be that BI is not an end result, but a business enabler. CIOs and industry experts say that using BI tools to extract information and issue reports is just a beginning; the tougher job is analyzing and applying that intelligence for competitive advantage and to better serve customers.

Corporate marketing departments illustrate the point. While some lines of business such as finance and sales are farther along the BI adoption curve, marketing departments lag behind. [see chart] "The challenge with data-driven marketing is not a lack of data, but a lack of actionable insight that can be derived from the data that already exists," according to a recent report published by Aberdeen Group.

When Aberdeen surveyed 272 global organizations about the top three challenges associated with marketing data, 47 percent of the respondents listed an inability to translate data into business insight. Data-quality issues (40%) and disparate data silos (36%) across the organization add to the challenge of "fostering a data-driven approach" in marketing, according to the study.

Fundamentally, says, Ian Michiels, research director and practice leader of the Customer Management Technology Group at Aberdeen, the data is not reaching those who need it most because it remains in silos, usually at the top levels, and it’s not generally accessible throughout the organization. "The data exists, but it’s decentralized and all over the place," he says. Some data resides in CRM systems, some in Web analytics programs, and the rest is distributed elsewhere in the organization.

In addition, marketing people don’t rely on "deep data answers in their day-to-day business," Michiels says. What’s needed is not more data, but integrated tools that marketing people can easily use for forecasting or during a campaign to demonstrate the ROI of their efforts. In the best cases, advanced BI organizations get data out to line-of-business users and make sure it’s showing business results. Technology is just the enabler, Michiels says.

People Power

Bruno Aziza, Microsoft’s Worldwide Lead Strategist on business intelligence, agrees that "empowering people to make better decisions" has to be a primary goal of BI efforts and should be mandated by top executives. "BI projects sponsored by an IT executive alone rarely work," according to Aziza. Similarly, technology by itself won’t create an environment where business intelligence permeates the enterprise. To achieve this, he says, corporate culture has to change to encourage "partnerships between IT and the business."

Additionally, Aziza says, without having uniform terminology and standard definitions throughout an organization, people won’t use the data or they won’t be able to share it beyond their own department.

At the Lego Group, based in Billund, Denmark, CIO Henrik Amsinck is grappling with many of these issues as the global toy manufacturer and distributor seeks to integrate its BI efforts across the enterprise.

Lego has many BI initiatives under way but Amsinck’s team is focused on three key efforts: customer-facing applications that incorporate data mining, loyalty programs, call centers and analytics for channel partners; a Consumer Insights Portal for internal and external data sharing, and an enterprise-performance management (EPM) program that will provide knowledge management across the entire organization.

While Lego is using new forms of customer-generated intelligence, such as collecting voice recordings to the call center, the EPM application is the most strategic and far-reaching, Amsinck says. It will "create a BI organization" driving a global information model with global definitions and KPIs servicing local needs through an efficient data-filtering process.

Over the next year more education and training will be offered to convince users—including new employees just joining the company-- of BI’s value. They will also be trained to interpret and analyze the reports they receive and to use standard definitions, terminology and on-platform tools. Unless there is corporate commitment and standards are in place, users tend to "go back to their old ways," Amsinck says. If they don’t know how to use the new tools and concepts, they won’t understand the value of learning.

Recent research from Forrester shows a strong need for integrated BI and analytics applications. In an August report, Forrester said: "Many enterprises deploy siloed, traditional BI and advanced analytics environments through fragmented, departmental and tactical initiatives." Michiels at Aberdeen calls this a "patchwork solution" that’s not working.

Despite its failings, businesses continue to place their bets on BI, even in the current economic climate. A recent InformationWeek article quotes Gartner research that shows a 22 percent growth in sales of BI software over the past year, up from 13 percent the previous year. Aziza drives the point home strongly: "Business Intelligence is a competitive asset for organizations; if you’re not using business intelligence to outperform your competition, your competition is using it to outperform you."

Best-in-class enterprises deliver BI to more lines of business than average businesses, although marketing still lags behind other users.