Two very different articles came across my desk this afternoon.  One described an IBM Cognos implementation with 3,623% return on investment just in 11 days. The other described how some UK firms are spending millions on Business Intelligence (BI) and seeing little in return.  Clearly organizations are investing in the technology, but there are just as many unproductive BI projects as successful implementations. Why is there such a disparity in the outcomes of BI initiatives?

While there are a number of reasons why BI initiatives fail, all really successful projects have two key elements – elements which are fairly evident from early on in the project.  And while technology is an important enabling factor, and some technology enables better than others,  it’s almost never the factor that makes or breaks an implementation.

The Numbers That Matter

The key to any successful project is to have the right metrics. This may sound simplistic and self-evident, yet it’s surprising how many organizations fall short in this area. Why? There’s a strong temptation to measure things which are easy to measure, and not the things which are critical to the business, have a high leverage factor within the business, and can lead to better corporate decisions and actions (changes!).

Focus

At the beginning, you should have a laser-like focus on why you’re executing the BI project in the first place. Where is the business value? Will you act on the results if they are not what you expect? Remember, it’s the analytics that tell you the bad news which gives you the opportunity to improve results. A pat on the back feels good, but doesn’t yield ROI.

The “So What” Factor

My wife has a marketing business for non-profit organizations. When trying to hone a high impact marketing message, she’ll ask clients a simple question: “So What?” This works well for focusing BI projects as well.

Try applying that question to your current or future BI project and see if that tightens up the metrics you’re reporting.  Also, see who on your project team can answer that question!

Here are some statements which include an answer to the “So What?” question:

  • We have a chart showing sales trends over the last 6 months – So that we can verify the new sales initiative, tried in one product line, is working and duplicate it in the others, and grow our sales a proportional amount.
  • Users can drill into any transaction over the last 5 years – So that we can identify high-profit customers, evaluate their buying habits and head off defections to competitors before they happen.

Organizational Readiness

One of the least discussed but most harmful impacts to a BI initiative is organizational resistance to change.  For example, there could be a culture of operating on “gut feel” or “the way we’ve always done it”. The seminal book Competing on Analytics: The New Science of Winning by Thomas H. Davenport and Jeanne G. Harris, describes five stages of analytic competition:

  1. Analytically Impaired
  2. Localized Analytics
  3. Analytical Aspirations
  4. Analytical Companies
  5. Analytical Competitor

The book contains a useful description of the readiness of organizations to adopt and derive value from BI projects, and the spread of them within the organization.  You can’t move your organization from level 1 to level 5 overnight, but it is possible to advance from where you are to the next level. I recommend the book as a great read for everyone involved in BI projects.

Next month, the other key factor determining BI success…

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