Not to Offend, But You Are Thinking All Wrong About BI (Probably)

What’s the first step in building a data warehouse or a business intelligence system?  Defining the key performance indicators (KPIs), right?  Wrong!  KPIs are certainly great to know and can definitely apply when you’re developing BI applications like management dashboards.  But, BI is NOT about management dashboards or data warehouses or query and reporting or QlikView or Business Objects…

Business intelligence is simply about capitalizing on data that was captured for other purposes.

I was struck by this thought over the Thanksgiving holiday when speaking to my brother in law.  He’s an executive with an up-and-coming, private-equity-financed distributor.  One night, his CEO had an epiphany

We know what people buy but we don’t know if what people buy is generally correlated with other things that they buy, or should buy.  If we knew this, we could encourage folks buying one thing to also purchase its natural accompaniment.

For those of us who have been in the BI business for long enough, this is a take on the classic ‘beer and diapers’ data mining example (click here for more on this BI ‘fable’).

This is certainly a use of BI, of capitalizing on data assets but it doesn’t really work in the way that folks expect BI to work:

• It doesn’t really start with a definition of KPIs
• While it may use a data mining tool, it doesn’t use dashboards or query tools or other, common, reporting tools
• It may use a data warehouse but it may, also, just use data assembled for a one-time analysis

In any case, when thinking about BI, the vast majority of companies need to stop thinking about BI.  BI is not the point.  Doing something extraordinary is the point and, if using data assets gets you to extraordinary, then BI is the mechanism.

Selling Business Intelligence to the Business

Business executives already know our secret.  The best business intelligence systems are not about the system.  The best business intelligence systems are about the business.  Sometimes it’s up to us, as IT professionals, to remind ourselves of this reality.  When talking to a business executive, don’t use keywords like analytics, data mining or data warehouses.  Instead, talk to them about their business.

Ask them if they know which of their customers are the most profitable and which are actually draining resources.  Ask if they want to find ways to reduce the amount they spend in legal costs.  Ask if they want to be able to predict the future demand for their products and services, so they can match capacity and staffing levels accordingly.

As experienced IT professionals we know that the way to provide these answers is to use the data already being collected by organizations in their operational systems (like ERP, CRM) and present it in new, visually appealing ways, with Business Intelligence (BI) tools.  But, occasionally we need to remind ourselves that no matter how cool the technology (to us, even that first program we all wrote that displayed the words “Hello World” was really cool), that’s not what sells BI.

Executives appreciate technology, and many are quite savvy, but when it comes to how they spend their day, they’ve got problems to solve, opportunities to capitalize on, and stakeholders to please.  To them, the best systems are like dishwashers – tools that get a job done.  Executives are not interested in how the dishes get clean, just that they do get clean in a fast, reliable, budget-friendly way.

In other words, executives are interested in the benefits of BI, not how it gets delivered.  So, the next time you’re discussing BI with an executive, sell the benefits, not the tool.  Sell the value of sales force ranking, not the BI system.  Sell the patient volume forecast, not analytic algorithms.  Sell the ability to direct your valuable purchasing dollars to the lowest cost vendors, the ability to have your sales executives use their limited time to court the most profitable clients, the ability to gauge the effectiveness of your latest promotion… you get the idea.

I’ve gotten some great feedback on my Blog posts and I’d love to hear your input.  Feel free to add a comment or email me directly at btaub@dataspace.com.