Business Intelligence
by Joel Martin

As Canadian organizations join the information economy model of the 21st century, the need for better, smarter and faster decision making becomes paramount.

The information society in which we live often lacks organization. Information tends to ricochet around applications, databases, documents, people and networks. Consequently, unorganized data prevent goal-directed organizations from harnessing the knowledge that's in the data to make clear decisions. Leaders of industry are striving for a system to bring order to this cascade of information. In many organizations, strategic planning isn't about making decisions; it is about documenting the choices that have been made, often haphazardly.

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Philosophers, historians, scientists, politicians, analysts and business leaders are constantly dissecting information and data to make intelligent decisions. In fact, the search for what we call business intelligence is not new and can be traced to the 18th-century Swiss scholar Daniel Bernoulli. He created mathematical tools that allowed anyone to estimate results from risky undertakings based on specific financial circumstances. In other words, he began using statistics to mitigate risk in the business decision-making processes of the European business leaders of his time. After 200 years of economic, social and technological development, organizations are now harnessing vast, ubiquitous computing resources to extract, transform and load data from multiple sources; across multiple applications; and deliver insight through multiple reports and media. This information is commonly used as the bedrock for developing business strategy, allocating resources and reducing risk.

Yet our modern tools have scattered information throughout the organization, in separate silos, applications, databases, desktops and content-management systems. IDC's research shows that having 24 repositories is the norm for an organization; large ones often have more than 100. And that's not counting the information scattered across e-mail, enterprise resource management (ERM) systems and customer relationship management (CRM) systems. The result is more information flooding throughout the organization than any one person, or even a large team of people, can get through on a daily basis.

Most individuals survive the constant deluge by ignoring large parts of it while other repositories of data containing critical process and customer data go untouched. IDC knows, from talking to organizations, that they understand they cannot afford to ignore these untapped wellsprings. The problem remains that each of these reservoirs holds a piece to the puzzle of what the enterprise "knows."

To address this, organizations are implementing business intelligence systems to analyze the trail of activity. Often, however, these systems do not have access to the content and documents that preserve the decisions that were made and why. It is no wonder, then, that enterprises say the top information problem they hope to resolve is the lack of a single point of access to all the pertinent information about a topic, customer, product or decision.

IDC believes that having information readily available to managers and employees is a critical component for improving operational and supply-chain efficiencies, increasing customer satisfaction and improving worker productivity. Business intelligence must allow for a contextual view that applies to the task at hand.

The two most popular business intelligence tools continue to be spreadsheets and presentations. One application is for the capture and manipulation of sets of data, the other for delivery. This leads to information "self-organizing" as teams use these - often manually created and redundant data stores - as a cornerstone for their decision making. The danger of companies relying on information to self-organize is illustrated in the "power law," where the 10 most popular data sets are used 10 times more than others and so on. While there is the appearance of a structure it is not guaranteed to have the most accurate or relevant data needed to make informed business decisions.

IDC warns users that business intelligence requires both connectedness and organization. IDC research demonstrates that the adoption of business intelligence across the organization must be endorsed and led by the leaders of the organization. Employees must be encouraged to leverage the centralized information, create feedback loops and deliver business results.

In an article on collaboration that will be published in this series, my colleague David Senf notes that "more money must be invested in accelerating the creation, distribution and monetizing of knowledge." A successful business intelligence solution will allow users at all levels of the organization to pull from a centralized repository of data. Moreover, the tools implemented will allow for more than just custom queries and reporting, but rather dynamic insight into today facts and tomorrow trends. If done properly the decisions made based on this information will help to mitigate risk and lead to better, more profitable outcomes.

A business intelligence solution is comprised of existing applications, databases, search tools, content portals and presentation tools. This solution must also allow for user collaboration and reporting in a manner conducive to the processes core to the organization and individual. Business intelligence tools should be constructed to mimic and support cognitive processes and improve the accuracy of choices made by reporting on timely business-relevant scenarios. IDC calls this predictive analytics.

Industry leaders should keep in mind that business intelligence has a role in building on collective experiences - not replacing them. Managers should not neglect to seek out new evidence because they trust their own experiences more than they trust research. To that end business intelligence tools can play an important part. Leaving your business intelligence strategy unchecked can lead to uncontrolled proliferation of user-developed spreadsheets and databases inevitably leading to multiple versions of key indicators within an organization. To earn the anticipated return on a business intelligence investment, IDC recommends having business intelligence champions distributed throughout the organization - across sales, marketing, customer service, product development etc - centrally managed.

As a final word of warning, be wary of gaps in business intelligence. Note and list them; by acknowledging them, people can be directed to act on missing information and collect it. This is essential to innovating process, products and strategies.