In response to the news stories about the National BI Survey in various trade journals including the one in Computable of Friday, the 30th of January this year headlined – “BI almost never pays off” – we can at least conclude that the subject is alive.
Let’s not lose sight of reality
We also understand that you, like us, warmly support the profession. However, we must not lose sight of the reality, which corresponds with the perceptions of many BI and Business Managers, CIOs and CFOs. This is why we have been conducting thorough research into the effect of BI and performance management within the Dutch business community and the public sector since 2004. Our goal was to identify the critical success factors for BI. We now have them in front of us! So let us learn from them. Do not try to ignore or deny the facts, but try to understand them. This is precisely what creates the possibility of making BI more frequently successful, as in the case of Ahold, winner of the last BI Awards.
Unsatisfactory: only 21% recorded a success with Business Intelligence
Of course, we also find it unsatisfactory to hear that only 21% of organizations recorded a success with Business Intelligence, of which only 6.6% put it down as an outstanding performance. However, we do not let this discourage us; we now have more insight into the route to success with BI and how we can significantly increase the return on investment. That is, by explicitly taking the soft and human side of business intelligence and performance management much more into account than before.
A representative sample
Below we give a brief explanation of some issues that were important during the research and that we believe need clarification or nuance. The details of the research – which was conducted among 389 organizations, a representative sample of a population of 2,950 organizations – can be found in the research report. Finally, we present some of the most critical success factors that have emerged from the research.
The return from BI is not purely financial
The question was put as to whether the performance and (financial) results of the organization had recently improved substantially. If performance information made a positive contribution to the organization, the question was asked as to which performance areas were concerned. It may also be about higher customer satisfaction and less sick leave, or that innovation has a higher probability of success. Return is not just about financial gain, but includes all performance and results.
“I think the concluding analysis is logical and again illustrate that BI should be something integral, and certainly must not be dominated by Finance.” says Gerard Struijf, Chairman of CRM Association and jury member of Dutch BI Awards.
BI is not an IT project
Somebody asked, “Whether a BI project (or any other IT project) pays for itself […]”. Here is the very core of the problem, BI is not just an IT project, it is a combination of behavior, management models and technology, whereby the critical success factors are mainly on the behavioral side.
“Obviously, a good informational environment pays for itself – or even does more than that. You only need to read Thomas Davenport’s last book: Competing on Analytics. Unfortunately, not all BI systems meet the requirements you can ask of such an environment. Information is only sporadically seen as a strategic business asset, with a corresponding vision, strategy and direction. Therefore, BI solutions are all too often technology driven, de facto short-term solutions aimed at single-point issues and limited to describing the past.
The conclusions from the research are then, I also think, all too true. ‘Information’ deployed in the right way is ideally suited to achieve competitive advantage – maybe because so many unsuccessful BI solutions are still being delivered!” concludes Egbert Dijkstra – former Director of BI at Ahold.
Waking up is not the goal
This was not a goal in itself but a side effect of the results of the research. It is no coincidence that a lot of dust is being stirred up now. BI is often approached from the technology side and presented as cure-all. It is remarkable that many end-users recognize themselves in the research results; they simply know that it is difficult to achieve results. A client said recently “I find it takes quite some perseverance to get BI off the ground”. In reality, she was really shocked by the resistance to the BI initiative.
“Daan claims […] nothing else than that BI in the narrower sense (however good) can never be responsible for better performance by the organization. BI can be a prerequisite for good performance management.” says Leo Kerklaan, associate partner at the Passionned Group and jury member of BI Awards.
Dear Customer… we do consider the soft factors
How can we as a market collectively change the situation here? Dear Customer, yes indeed BI is very difficult, but… if you also take into account the soft factors (which are actually quite hard) such as culture, politics, behavior, analytical skills and competencies, there is a decent chance that we can perform considerably better. However, be sure to allow plenty of time for this. The director of a another company in the business called us this morning, “We implemented a solution at one of our customers four years ago and it is only now that they are really discovering what powerful opportunities BI provides for insight and management.”
BI is not only technology
BI is a process for managing your organization better, to improve performance and to develop the organization. The research shows that there is no way that a significant relationship could be found between having a data warehouse – or BI software – and success. Obviously you need it, like humans need water, but it is not critical for achieving success. What is significant and critical is talking to each other about negative and positive performances, using information for analysis and action, regular evaluation and updating of standards and targets, a culture focused on collaboration, management involvement, etc. Above all, it are the soft factors that determine the success of BI.
“The conclusion is that BI is not a technical implementation project, but that the entire organization must be much more involved. Otherwise BI is then limited to some reports and analysis which usually do not provide direct added value.” says Freek Kamst, managing director of the Vanad Group.
The critical success factors – the follow-up study
The publication shows the most important scores of the ‘bad’ and good performing organizations in the most essential fields of performance management and BI. These success factors vary from very critical to slightly critical and consciously managing on these principles may significantly increase the success ratio of BI.
“My conclusion is that we must continue to unravel the mystery of performance management. We need to do much more research. Daan has to simply continue. Cracking the code!” concludes Leo Kerklaan.
Name your customers as examples where BI can be very successful
Ahold, CZ Active in Healthcare, DSM Innovation, Parnassia, KPN Mobile and Ricoh, all organizations that have achieved demonstrable success with BI. Assessed by an independent professional jury with an academic background and years of experience. Many of our colleagues, in response to the results of the research, have stated that BI does indeed almost always pay off. Therefore we want to challenge them… register those organizations for the BI Awards and name your clients as examples that BI can be very successful.
The challenge: make BI a great success
The research report ‘The 7 biggest pitfalls of BI’ and the full list of critical success factors can be ordered online on our website www.passionned.com from today. In this an explanation is also given about the accuracy, population and reliability of the study. If you would like to benchmark your organization on BI and performance management against your industry peers, please go to www.biaward.nl.