Make a difference to your bottom line with BI

December 4, 2008

In the first two chapters the authors develop their core argument. BI projects are only successful when they have a positive impact on the bottom line of an organisation. BI so the central and simple theme of the authors, needs to give an organisation competitive advantage by either increasing its profits or decreasing its costs.

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They continue to say that BI must not be implemented in an unstructured manner, but has to be at the core of the business and its processes. Therefore, it needs to be aligned with the overall business strategy. One of the fundamental mistakes an organisation can make is to take an ad hoc appraoch to BI.

Indeed it is my own experience that the full potential of BI is only unlocked by few organisations. Often BI is just used to produce a report here and there but is not embedded in the core business processes: Reporting is disjointed, without an overall strategy, and most of the time report results are not followed up by action..

This stands in contrast to an organisation that uses BI strategically, e.g. to identify valuable customers that are given preferential treatment or special conditions, as opposed to less profitable customers.

BI opportunity analysis according to the authors, stands at the beginning of each BI project. It requires intimate knowledge of the industry that the organisation operates in (competitors, industry trends etc.), an in depth understanding of the organisation’s business processes and business drivers, and a thorough understanding of how to align BI and Data Mining techniques with the BI objectives. “For any given company in any given industry, we should systematically evaluate its industry, strategy, and business design as a means of identifying potential BI opportunities”. Unfortunately, a rare combination of skills.

In the chapters that follow (chapters 3 to 6), the authors continue to develop their iterative, full lifecycle methodology, the BI Pathway method. It is split into three phases. The architecture phase includes the development of the BI portfolio, the BI readiness assessment, and business re-engineering models (How is information currently used and how will it be used in the future? How will BI influence and transform business processes?). The implementation phase more or less follows traditional, more technically focused implementation methods (Kimball , Inmon etc.). During the operational phase the implementation is fine tuned and continuously improved.

In chapter 7 the authors give very useful practical examples of how BI can be aligned with business processes. This is a good starting point for getting ideas of how to embed BI in the everyday business processes of an organisation.

Chapter 8 offers a good overview on the mistakes that are typically made in a BI project.

In my opinion this is one of the few books that actually offers fresh insights. Coming mainly from a technical background, this book was an eye opener for me. Even though it was always clear to me that BI projects need to be driven by business processes, I have to admit that I did not understand the full extent of this until I had read this book. What I also liked were the numerous case studies and practical examples that are given, which is so often lacking in other BI books. The only criticism I have is that more of this hands on stuff would have been even better. What I also found quite useful is the executive summary at the end of each chapter. All in all a highly recommended book for both the technical and business BI practitioner, the novice and the expert.

Listen to this Podcast where co-author Nancy Williams discusses her thoughts with Claudia Imhoff et al