Some essential social and economic developments accentuate the necessity to stimulate intelligent behavior within organizations and more specifically, within enterprises (Schnabel, 2000):
- informalization (hierarchies and boundaries are fading);
- information technology and computerization;
- internationalization, globalization and liberalization;
- intensification of the increasing influence and market dynamics.
The pressure to keep innovating
These developments increasingly influence the organization, the way we do business, and the pressure to keep innovating. They also partly answer the question ‘why Business Intelligence?’ Information and knowledge will play an increasingly important role and data forms the main source for information and knowledge. In the last 4 years, more data has been recorded than in the entire history of the planet and this will bring more changes than ever. For this reason, amongst others, Business Intelligence often focuses initially on proper accessibility of existing data or information both within and outside the organization.
Playing a game of lightning chess on multiple chessboards
Additionally, organizations now have to deal with customers who are demanding better quality; with a substantial increase of interdependency between organizations; with a growing influence from the market; with shorter product life cycles and last but not least, with the increasing influence of social media (Facebook, Twitter, LinkedIn, etc.) The pace of change in the current digital age seems to be faster then ever and doing business is like playing a game of lightning chess on multiple chessboards.
These factors are interrelated
Although the aforementioned social and economical developments and factors are interrelated, it is simply impossible to identify the underlying cause of these developments. What we do know is that globalization could lead to an increase in market forces as a result of fading or even disappearing boundaries. We realize that an expanding market provides greater dynamics and we know that the 24 hour economy is enabled by the internet and virtualization – time and location are no longer restricting factors. The internet allows us to do business anytime and anyplace.
Opportunities rather than threats
These developments and factors create opportunities rather than threats. Liberalization and globalization enable organizations to enter (new) markets that were previously protected. Opportunities however can only be taken advantage of, and threats countered, when organizations actually show truly intelligent behavior and are capable of adapting to new circumstances and conditions.
Case: Business Intelligence at a Dutch Government Department
Thanks to a Business Intelligence solution, the Dutch Ministry of Social Affairs and Employment realized a reduction of the number of fixed reports. Within a few months they went from 600 different fixed reports – particularly on financial areas – to only forty user variable reports. As a result, the IT department had less complex applications to write and maintain and both managers and controllers required significantly less time for analysis – killing two birds with one stone.
One version of the truth
In preparation of this extensive consolidation process, all business definitions and data had been aligned to create “one version of the truth” . A data warehouse combining all the data from nine different back office systems and an adequate reminder system proved indispensable. Previously, employees had to be able to handle large amounts of paperwork and work with various different systems. Now, information is available immediately within one single environment – with a single user interface. The information can be accessed from any workstation via the portal.