BI isn’t a silver bullet
It sometime seems that Business Analytics is the only game left in town. The familiar term ‘business intelligence’ or BI seems to have been changed everywhere with ‘search and replace’ into ‘business analytics’. The Silver Bullet that puts an end to all problems. If only life were that simple.
From thorough and extensive Passionned Group research, it seems that successfully applied Business Intelligence has a number of interconnected critical success factors. These can be placed in the higher organizational concepts; All-round vision, Agility, Alignment and – indeed – Analytics.
Daan van Beek, Managing Director of Passionned Group, says: “We use these four elements as a basis for turning an ordinary organization into an intelligent organization. Please note: all four.”
Earlier Daan published an article in the Journal of IT Management to indicate the main characteristics of intelligent organizations that outperform other organizations across the board. “One of the important characteristics is indeed the use of information for analysis and action. But discussing the figures with each other – both the negative and the positive figures – is just as important for success.”
Four higher concepts that make an organization stronger and smarter
Figure 1: four higher concepts that make an organization stronger and smarter
All-round vision, Agility, Alignment and Analytics, borrowed from Daan’s book ‘The Intelligent Organization’, are the four higher concepts that sustain an organization and make it stronger and smarter. A comparison is easy to make: a man possesses senses, a brain and limbs; each of these components can be related to a success factor.
All-round vision represents the sensitivity and selectivity of the senses, the brain can be linked to thinking and analyzing and the limbs provide manoeuvrability. Alignment runs through all this, it is needed to keep everything in tune. “Think of unambiguous definitions of KPIs,” Daan gives as an example. “But also the regular evaluation and adjustment of standards and targets; that is certainly also a form of alignment, with which you bring ambitions into line with current reality.”
Displaying Business Intelligence success factors in a tag cloud
The critical success factors for Business Intelligence or rather for the success of the entire organization have a certain degree of importance: ‘Using information consistently for analysis and action’ is an important factor, as well as ‘regular evaluation and adjustment of standards and targets’ and ‘using information purposefully for innovation’. The key success factors are placed in a so-called tag cloud: the bigger the letters, the more important the factor.
Figure 2: Tag cloud of BI success factors
“From our research we know the implementation rate of each success factor in intelligent as well as ordinary organizations. The difference between the two yields a distinguishing number that we have linked to each success factor,” explains Daan. “One example: the success factor ‘regular evaluation and adjusting of standards and targets’ has been implemented in 90 percent of the smart organizations, but only in 35 percent of the regular organizations. The difference yields the distinguishing number 55, that we have attached to this success factor. In this way each factor has its own distinguishing number.”
Alignment and Agility are at least as relevant as Analytics
Subsequently Daan examined whether it was possible to relate the critical success factors to the four higher organizational concepts All-round Vision, Agility, Alignment and Analytics. “The consistent use of information for analysis and action naturally belongs to Analytics. Regularly evaluating and adjusting standards and targets is half linked to Alignment and half to Agility. Thus all critical success factors are linked to the organizational concepts,” explains Daan. “After that the distinguishing number of each success factor is assigned to one of the four concepts. From that a graph emerged showing the relationship between the alignment, agility and analytics. It is remarkable that analytics scores considerably less than the other two.”
Daan van Beek concludes: “The research shows that an organization can rely very heavily on analytics, with or without the help of sophisticated tools, but that alignment and agility are just as relevant to achieving an intelligent organization that performs better across the board.”