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August 31, 2010

Should BI Teams Reside on the IT or the Business Side?

Taking our inspiration for a post from a discussion on the Business Intelligence & Analytics Group on LinkedIn, we thought about whether Business Intelligence should be controlled primarily by the IT department or people from business functions.

Divided opinions

First of all, it's important to remember that the answer to this question depends on the type of BI provided. For example, in house specialists are vital for traditional BI software, which require code to be written for each query as well as servers to be maintained and software to be integrated. SaaS BI is delivered over the internet so there is no software to install, no servers to maintain and no integration to be done. It is intuitive to use and does not require a single line of code. We can't speak directly for other software vendors, but our software Bime is designed to empower professionals outside of the IT department, with a view to freeing up IT demand so that IT departments can focus solely on their strategic IT role.

Other voices thought it depended on how BI is defined in the organization:

"If the largely accepted definition, that BI = Analysis DW infrastructure, is held in the organization, then the Analysis side should reside within the business, and the DW team should be within IT. Some people prefer to use the term BI to describe just the Analysis part, if that is the case, then it should be on the business side."

Others felt slightly different, in that a lot rides on the technical abilities of the BI team itself, as well as how well integrated the IT and the BI teams are.

Some came up with "both and neither" arguments, stating that BI should exist on it's own accord and should simply liaise with business and IT functions across the organization.

Several offered up their own personal experiences - "I've seen it working well both ways, and I've seen it struggling both ways. Too often, IT lacks the understanding of the business needs and the sense of urgency. On the flip side, too often the Business doesn't have any appreciation for structure, consistency and sound fundamentals. From my experience, the best combination happened to be when IT was an active partner alongside the Business team, and the solution was built mostly by IT professionals, with close participation from the Business."

A common theme

One common theme that seemed to emerge from the discussion was that it was important for the users to have a good understanding of the organization as a business, whether they were IT specialists or not. A lot of opinions felt a mix of the two was the best way to deploy BI, with IT functions taking care of the infrastructure part and business functions carrying out the analysis and reporting.

You can find the original discussion here and a similar discussion for comparison purposes here. (You need to be a member of both groups to view the discussions).

Posted by We Are Cloud at 3:45 AM | Comments (6)

August 26, 2010

5 Questions You Need to Ask Before Deploying Business Intelligence

A savvy IT professional will ask end users about their requirements, before trying to introduce business intelligence to his or her organization. They will ask questions like: "What information are you looking for?" and "How do you want it to be formatted?".

1. What level of technical skill do the users already have?

This question should not be posed directly to users. Many end users have a somewhat optimistic perception of their technical abilities and most consider themselves more of an expert than they actually are. As a general rule of thumb, if you are handy with Excel, i.e. can use formulas and sort data, and you can interpret numbers with relative ease, you are likely to be able to comfortably work with a business intelligence solution.

2. How much time can you dedicate to finding, accessing and analyzing information?

This is a pretty essential question, probably the most important of the five, but is often completely ignored. Yet if it is answered realistically, you can easily create an accurate deployment plan, even without responses to the other four questions. In most companies, people need access to information, but they often lack the time to dedicate to it. If you don't have a lot of time to spend finding, accessing, and analyzing information, then you probably don't require business intelligence capabilities. How much time someone has to devote to reporting is often related to their role in the organization. For example, CEOs may have very little time to spend analyzing data, while analysts will have more since analysis is what they are primarily responsible for.

3. What types of questions will users be asking?

Different types of questions are best asked and answered by different types of solutions. Performance management, dashboards, and scorecards are about monitoring the status of a key metric, whereas ad hoc query tools are better suited to asking random or on-the-fly questions.

4. How timely must the data you are accessing be?

Your BI deployment will be influenced by the required latency of the data involved. Business intelligence has three possible levels of latency - scheduled update, on demand, and real time.

With scheduled update, the information is not up-to-the-minute. The data source is probably updated on a scheduled basis, e.g. once a day or every hour. Or, the data can be close to real time, and be updated incrementally within minutes of a transaction. Most BI deployments work well with some kind of a scheduled update.

Users will require direct access to information contained in a near real-time data warehouse with an on demand solution. While this does not necessarily affect the BI deployment itself, it is uncommon for BI tools to give users access to this kind of information, because it is usually stored in a form that makes creating ad hoc queries difficult. However, dashboards, reports, and guided ad hoc reports are effective business intelligence deployment methods when on demand access is required.

Finally, true real time means that the information being displayed is updated as an event happens - even before the relevant data makes its way into a database. Only dashboards and reports will enable the dynamic display and update of information in real time.

5. What role does the user play within the organization?

Understanding a user's role gives you a certain insight when it comes to their BI requirements. For example, executives look primarily for key performance indicators, whereas analysts will often spend their time analyzing data in more detail. A front office worker, such as a customer rep, often searches for information to solve specific problems. While there are likely to be differences from one organization to the next, understanding the characteristics of the various users in your particular firm will help you better understand user requirements.

Posted by We Are Cloud at 3:30 AM | Comments (4)

August 13, 2010

Why Should You Care About BI?

Results from a recently released survey, 2010 SMB Routes to Market Study, reveal a few interesting trends about how SMBs discover, learn about, evaluate and buy technology solutions and services - including their thoughts about BI solutions. The results suggested that small AND medium businesses consider "getting better insights out of the data they already have" as their highest technology priority. Business Intelligence solutions can help solve this problem by enabling the tools that measure and manage organizational goals and objectives. BI can also assist with conducting "what-if analyses to evaluate different courses of action.

Here are the top 4 technology challenges for each:

Top technology challenges for small businesses:
1. Get better business insights from existing data: 35%
2. Figuring out how different solutions can help the business: 32%
3. Implementing new solutions/upgrades: 32%
4. Integrating social media with Web site, marketing tools, etc.: 24%

Top technology challenges for medium businesses:
1. Get better insights from existing data: 33%
2. Figuring out how different solutions can help the business: 32%
3. Integrating social media with Web site, marketing tools, etc.: 32%
4. Implementing new solutions/upgrades: 30%

In very small companies, spreadsheets and other ad hoc tools are often considered enough to complete the task. But as companies expand, the amount of data being handled grows: there are new products and services, new markets and opportunities, investments, sales, marketing, among many other systems.

As a consequence, more people are increasingly roped into being part of the data collection and analysis process, and different people in the organization (marketing, human resources, finance, etc.) are required to analyze data in different ways. Typical problems with using only spreadsheets are:

* Time consuming and labor intensive to establish and maintain. Setting up a company-wide model, creating organizational plans, distributing and collecting information from different managers, consolidating multiple spreadsheets, and debugging broken macros and formulas becomes unsustainable and unproductive.

* Insufficient collaboration and feedback capabilities. Desktop spreadsheets are siloed, and don't enable real-time data sharing and updating. Getting a unified, accurate view becomes difficult.

* Errors can be common. Research shows that 20 to 40 percent of all spreadsheets contain errors, and as they become more complex, error rates increase. Without an audit trail, changes and mistakes can go undetected and businesses end up making decisions based on bad information.

* Inadequate analysis and reporting. Collecting information and integrating it together into one spreadsheet is a lot of hassle. The detailed information that decision-makers require can be difficult to obtain or not even available to them.

Business Intelligence solutions give businesses a way to streamline and unify the data collection, analysis and reporting process. BI solutions are built on a unified database, so everyone involved in the process gets a single, real-time view of the data. Many BI solutions feature self-service dashboards and reporting tools that make it easier and less time consuming to contribute to and manage the process.

What else should you consider?

Make sure you are aware of vendor differences in pricing, solution capabilities and complexity. You would benefit from starting off by conducting a thorough assessment of your internal requirements, and then carefully investigating and evaluating how different offerings are aligned to your organizational requirements and limitations. You should take advantage of free trials and demos which will help you get a better idea of whether a specific solution will fit your needs. By taking more time in the first place to assess, evaluate and compare your alternatives, you'll greatly increase the odds of selecting a solution that will meet, but not exceed your needs and budget.

Posted by We Are Cloud at 3:45 AM | Comments (3)

August 4, 2010

The Most Promising Areas for BI in the Future: LinkedIn Discussion

We're following a recent discussion on LinkedIn entitled: "What do you think are the most promising areas of application for Business Intelligence/Data Mining in the near future?". We thought this would be an interesting starting point for a blog post, so here are some of the ideas produced in the discussion about which direction BI is heading.

Globalization. The world is becoming increasingly interconnected... BI/Data Mining can play a greater role in identifying the potential and real impacts of global events on an organization.

Social Media. As it becomes ever more prominent, it is becoming more and more important for groups to pay attention to what is happening in the social media universe, and BI solutions can help organizations capitalize on this.

Regulation. As governments continue implementing rules and regulations at an unprecedented rate, it was thought that BI/Data mining would play a major role in monitoring, reporting and possibly enforcement of compliance.

Small Business. Business intelligence is getting simpler and easier to setup as more and more vendors try to enter the market. This will enable smaller companies to take advantage of business intelligence.

An industry that seemed to crop up a lot was healthcare. The application of BI in healthcare, especially healthcare analytics was mentioned by several different people during the course of the discussion. This was coupled with the idea of the need to move from "analyzing events after they happen to being able to predict events before they occur", exactly what BI solutions are designed to do, and exactly the kind of solution that the healthcare industry can benefit from.

Another idea touched on the movement away from static reports and towards advanced data visualization - something we identified in our recent blog post (5 BI and Data Visualization Trends for 2010) as a trend already happening this year.

Participants also felt that creating BI tools that empower managers and other users was very important for the future, with a view to freeing up IT demand so that IT departments can focus on their strategic IT role only.

You can find the original discussion here.

Posted by We Are Cloud at 3:30 AM | Comments (46)

August 2, 2010

Dashboards vs. Scorecards - what's the difference?

You often hear both of these terms being used interchangeably - and at other times it seems like they are two different things. Recently we did an internet search to see if we could come up with some definitive definitions for scorecards and dashboards from a credible source. After a bit of reading, we came up with the following ideas.

A dashboard or scorecard interface finally makes it easy for a majority of users to quickly find, analyze, and explore the information they need to perform their daily tasks.

There is a subtle distinction between a scorecard and dashboard. Each tool merges elements from the other, but at a high level they both target specific and different levels of the business decision making process.

At the highest, most strategic level of the decision making spectrum sit scorecards. Scorecards display periodic snapshots of performance associated with an organization's strategic objectives and plans. The goal of the scorecard is to keep the business focused on a common strategic objective by making comparisons within your department, company and/or industry to indicate your direction. The primary measurement used in a scorecard is the key performance indicator. These key performance indicators are often a composite of several metrics or other KPIs that measure the organization's ability to execute a strategic objective.

The common industry perception is that a dashboard displays information about a company at a given point in time that can be used to make better business decisions. Dashboards fall down one level from a scorecard in the decision making process; as they are less focused on a strategic objective and more tied to specific operational goals. An operational goal may contribute directly to one or more higher level strategic objectives. Within a dashboard, the execution of the operational goal itself becomes the focus, not the strategy. The purpose of a dashboard is to provide the user with actionable business information in a format that is both insightful and intuitive. Dashboards leverage their data primarily in the form of metrics and KPIs.

When we were doing our research, we stumbled across Dan Holowack's blog. He provides us with a metaphorical solution to our problem that might help you better remember the differences between the two:

Imagine for a moment that you're driving a car...

DASHBOARD

All the instruments in your center console are displaying current-state information. The speedometer says you're traveling 45 km/h and the RPM gauge is at 3000. The odometer tracks and displays total distance traveled and a fuel gauge says you're at half a tank. All these indicators display information for a 'single point in time'.

SCORECARD

Knowing all this dashboard information is great, but here's why you need a scorecard... you're heading straight for a BRICK WALL (10 seconds to impact). It's fascinating how the dashboard can give you so much information, but it's all quite useless without the support of Scorecards. Consider the Scorecard to be your own eyes. You notice you're passing all the other drivers on the road and decide to slow down (for fear of a speeding ticket!). Similar to how you compare cars on the road, the Scorecard should make comparisons within your department, company and/or industry to indicate your direction (are you heading for a brick wall?).

Source: Dan Holowack, Love Data Intelligence blog

A nice little round-up for this post comes from TDWI : "Whereas a dashboard informs users what they are doing, a scorecard tells them how well they are doing. In other words, a dashboard records performance while a scorecard charts progress. In short, a dashboard is a performance monitoring system, whereas a scorecard is a performance management system."

Posted by We Are Cloud at 3:15 AM | Comments (2115)