The route to intelligent design?

Herman Heyns, Partner at KPMG Performance & Technology, explains how to make the most of Business Intelligence

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There is much to be learnt from the experiences of BI to date, and it is clear that a broader and holistic agenda is key to avoiding failure.

Business Intelligence (BI) has risen to the top of the CEO agenda, with implementations already delivering significant benefits to bottom line and market value. With the onset of recession, businesses have quickly grasped the significance of unlocking information to understand performance and drive the business in the right direction. But many BI implementations fail to live up to their potential. Often, they cost more, take longer than expected, and yield fewer benefits than the business set out to achieve.

It is important to recognise that BI is not just about obtaining data. It is far more about ensuring data is credible, can be easily accessed, and is presented in an intelligent and meaningful way to the right people, at the right time.

Furthermore, it is about enhancing an organisation’s efficiency and effectiveness, by speeding up information gathering to support and enhance business processes.

Four common mistakes
IDC, the market intelligence firm, recently found that European organisations are planning a 40 percent increase in spending on BI products in 2010 compared to last year. However, recent research by the University of Cambridge – commissioned by KPMG – found that around 50 percent of BI implementations fail to deliver. This is an alarming statistic, especially when you consider the potential benefits that are there for the taking. In the current economic climate, and with lingering uncertainty over the financial outlook for European businesses, CEOs need to make their investments work harder than ever.

The research found a number of common mistakes that are weighing down todayís business intelligence projects. First, too many organisations see BI purely as a technology issue, and delegate responsibility for the project to the IT department. Often, the most successful projects are run by a mix of specialists from across the organisation incorporating for example IT, finance and business development.

Second, a BI project is only as good as its underpinning systems, and you cannot underestimate the importance of assessing your legacy systems for their readiness to support BI. The gradual procurement of IT systems over time and significant M&A activity in recent times have left businesses with a myriad of different databases and technology platforms across different locations. Businesses need to pay careful consideration to the impact of any data quality issues and this disjointed technology landscape on the roadmap for successful BI.

Third, BI is a new way of thinking that demands an equally new approach to project management and execution. In the good times, a more reactionary and tactical approach to project development was acceptable. Driving real success though BI comes from understanding how to turn data into information and strategic insight.

Finally, the European business environment is changing apace and some businesses have failed to keep their BI strategies up to date. A regular review of the organisation’s position in the business world is critical to gaining competitive edge.

With BI firmly established on the modern business agenda, CEOs are challenged with making sure the investment delivers real competitive advantage. BI cannot simply be plugged into the existing infrastructure and start working its magic; the strategy that underpins the project is just as, if not more important than, the BI tools themselves.

Six simple steps
Once these dangers are understood, it is relatively simple for businesses to ensure they start out on the right foot. Key to avoiding these common mistakes is an integrated strategy, aligning management and technology to ensure that BI tools are selected and implemented in a way that supports the business strategy overall.

More specifically, there are six steps to ensure that management and technology infrastructures are prepped to deliver BI success. CEOs must ask themselves:
1. Alignment to business strategy:
What information is key to delivering your business strategy?
How can it be deployed in a manner that maximises business performance in a cost-effective manner?

2. Governance:
What are the principle processes and the organisational structure required to ensure data integrity and the ongoing alignment of information to business needs?

3. Performance management process and reporting:
What are the key performance indicators (KPIs) and reporting requirements of the business that align to your business strategy?
How can planning, forecasting and business performance management be improved to drive strategy execution?
How can the financial consolidation and reporting be best performed?

4. Integrated information management:
What information is required, where will this be stored, and in what structure and format to enable information agility and insight?
How should existing systems be changed and combined with new solutions to deliver effective BI capabilities for the business?
What skills are required and do these already exist within your business?
Where are the value creation opportunities in effective data management? How can these be monitored and reported on to shape business development?

5. BI platform:
What are the right applications and tools to support information delivery, financial consolidation, planning, ad-hoc reporting, data analysis and performance management?
How do you ensure that your application portfolio will continue to meet your strategic goals, as vendors change their BI solutions?
How do you measure delivery success and ensure that BI solutions really deliver value to the business?

6. Infrastructure:
What will all of this mean from a technical infrastructure point of view?
How do you ensure solutions are scalable and future-proof, whilst remaining cost effective?
How can security, access and performance of the solution be ensured?

These six steps can be applied individually, but the most successful projects will address them all together. There is much to be learnt from the experiences of BI to date, and it is clear that a broader and holistic agenda is key to avoiding failure. Information about the performance of the business is readily available, but how you apply process, organisational and technological thinking will determine just how successful you are at achieving your intended outcomes.

Implemented effectively, BI can set organisations free. In addition to reducing the cost and complexity of information processing and providing insight to enhance process efficiency and effectiveness, BI can help business leaders engage everyone across the organisation in the successful execution of strategy.