Preface
Since founding DecisionPath Consulting in 1999, Nancy and I have had the privilege of working with great clients and colleagues. We have always approached our engagements in the spirit of partnership: we bring our general business knowledge, enthusiasm, and expertise in business intelligence and data warehousing, and our clients afford us an opportunity to help them succeed. In the process of achieving those successes, we’ve observed a variety of challenges that can derail even the most promising BI opportunities. Simply put, most of these challenges are business challenges.
This experience has led us to conclude that if companies are going to fully realize the profit potential of business intelligence (BI), there needs to be a better understanding of BI in the executive and managerial ranks. That is the reason for this book.
At the enterprise level, BI has demonstrated its ability to improve profits by tens or hundreds of millions of dollars annually, depending on the size of the company. Accordingly, BI should be a key tool for managing and improving performance—and profits—at just about any company in just about any industry. It should certainly rank alongside of management tools and techniques such as Strategic Planning, Benchmarking, Pay-for-Performance, Outsourcing, Customer Segmentation, Reengineering, Balanced Scorecard, and Total Quality Management.
That being said, many large companies tend to see BI as primarily a technology play. Thus, they fail to focus on the business challenges of leveraging business information and analytical techniques to drive better performance and improved profits. Some of the typical business challenges we have seen include:
In addition to observing these business challenges first-hand in many different companies, we also hear these themes echoed by the BI professionals we meet when we teach at industry conferences. On the flip side, we serve as judges for TDWI’s annual best practices competition: a key aspect of winning companies is their ability to overcome such challenges. More broadly, by improving business performance, BI helps companies compete successfully in an increasingly global economy, which protects local jobs, economies, and communities.
Given the mission of building a better understanding of BI in the executive and managerial ranks, we have written The Profit Impact of Business Intelligence from a perspective that blends general management and technology strategy thinking. By doing so, we hope to engage an audience that includes business and IT leaders and managers as well as BI and data warehousing project managers, architects, and analysts. We also believe that the book can be a source of readings for undergraduate and graduate-level MIS courses. The general organization of the book is as follows:
Part 1: Identifying and Leveraging BI-Driven Profit Opportunities
Our goal in Part 1 is to pique your interest in BI and point out in general terms what it takes to leverage BI for improved profits. In Chapter 1, we provide examples of how well-known companies in a range of industries use BI to improve profits, and we describe the prerequisites for ensuring the targeted ROI. In Chapter 2, we describe and illustrate a proven, straightforward method for identifying how your company can exploit BI for improved business performance. In Chapter 3, we point our some of the key barriers—or risks—that must be overcome to capture the full payoff of your investment in BI. In our view, the chapters that compose Part 1 should be of interest to the broad audience the book hopes to engage.
Part 2: Creating the BI Asset
Our goal in Part 2 is to provide a business and technical overview of what it takes to design, build, deploy, and leverage a BI environment—the BI Asset. In Chapter 4, we describe our BI Pathway Method, which is a complete strategic approach to the business and technical activities that must be accomplished to inject BI into your business and use it to drive business performance. The treatment in Chapter 4 is at a high level, and we would refer readers interested in a more detailed treatment to our full-day course for more of the “how-to” of the BI Pathway Method. In Chapter 5 we discuss the leadership and general management challenges of using BI to drive increased profits, which are business challenges that go beyond the sometimes complex technical challenges of building the data warehouse and the BI applications. In Chapter 6, we discuss how BI fits in the broader IT environment, which is important because IT policies and procedures optimized for day-to-day transaction processing systems are sometimes barriers to BI success. In our view, parts of Chapter 4 may be too technical for business executives and managers, and parts of Chapter 5 may be too business-oriented for the more technically inclined members of the BI team.
Part 3: Leveraging BI for Profit Improvement
One key goal in Part 3 is to delve more deeply into the different ways companies have used BI to drive increased profits, which we do in Chapter 7. In Chapter 8, we discuss common mistakes companies make with BI initiatives, and in Chapter 9 we take a look ahead to what companies can achieve with BI if they really embrace it and use the technologies to push the envelope of business performance management. In our view, the chapters in Part 3 should be of interest to the broad audience the book hopes to engage.
Appendices
Appendix A provides a glossary of common BI terms, including terms used in this book.
Appendix B builds on the material in Chapter 3 by providing the BI Readiness Assessment instrument that DecisionPath Consulting uses to assist companies in identifying potential barriers to success. With the assessment instrument, you can find out today where your strengths and weaknesses, assets and risks are for implementing BI. That information helps you plan a BI program that is primed for success, whether defined in terms of increased profit, better service, higher product quality, or other key success factors. Visit www.decisionpath.com to take an online version of the BI Readiness Assessment to see how your organization stacks up.
Special Features
Throughout the book, we have made liberal use of graphics, tip boxes, pitfall warnings, and checklists to help spotlight the key points you may want to remember. We hope you will find these helpful.