There’s been a lot written about the recent Gartner Executive Programs CIO survey in which business intelligence (BI) moved from being the number one technology priority of CIOs around the world for the past five years to number five in 2010. Certainly it’s something I have been asked about a lot since it was published. Shortly after the survey results were published, Mark McDonald, the head of research for Gartner’s Executive Programs service, wrote on his blog about some of the reasons behind the drop: “Business intelligence ‘the management capability’ needs to replace BI the technology.”
I couldn’t agree more. The capabilities of BI need to change and be focused on what the business needs rather than the technology.
So what has led to business intelligence dropping down the technology priority list of CIOs? There are several factors in play, but I put it down to three things:
• The technology has not delivered against expectations.
• A shift in decision making power and the ultimate reaction to that.
• The appearance of a new silver bullet or ‘BI in sheep’s clothing’.
The fact is, BI technology is now at a stage of maturity in the market. There’s still innovation happening and new technology being developed, but organisations need to get some of the basic right first before trying to use some of the newer tools and techniques.
This begs the question then: what should they focus on? Many people have heard me present on BI at various conferences, and I always talk about a balanced approach to the 4 Ps – the 4 Ps being the fundamental parts of any successful BI program.
1) Performance: The establishment of an enterprise wide performance metrics framework
2) People: Development of core business competencies within your business
3) Process: Embedding the use of information into and around business process
4) Platform: Establishment of core BI capabilities
The frustration and tension within many businesses today is that BI is seen as a technology issue, and so the focus has been on the last of my 4 Ps, the platform. As its name suggests, business intelligence is a business issue and the technology is just where the rubber hits the road. An organisation might have the best tools available to them but not know how to use them. To use an analogy, an organisation might have the formula one race car of tools, but they don’t have the pit crew, they don’t have the infrastructure, they don’t have the management, they don’t have the driver training and enhancement programs. Just having the formula one car doesn’t mean you’re going to win races. You need to have all the other pieces - the people, the performance aspects of metrics and the processes working in synch for you to be successful.
Then we have the decision making power shift in the organisation during 2009. With so much scrutiny of costs or should I say cost savings in 2009, the decision making power on what gets approved and what doesn’t get approved shifted fair and square back into the corner of finance. This meant making sure every project that was approved was aligned to a business initiative. This required a totally different way of thinking for many of what was considered IT projects.
Gartner conducted a survey during 2009 and asked more than 260 CFOs what they thought was lacking from their IT department in reference to their skills. The highest lacking skill was ‘project management’, which is why so many services companies today pay top dollar for good project managers. However the second highest response was ‘IT’s ability to apply newer technology’ to their business problems. This second response has led to a reaction by CIOs to consider ‘lighter weight’ technologies that will take them into the future. This is why the top three technology priorities globally for 2010 are virtualisation, cloud computing and web 2.0 technologies.
The odd thing is that while a mature technology like BI dropped from being technology priority number one to number five, this seems to conflict with what the CIOs said was their number three priority: ‘increasing the use of information and analytics in decision making’. Clearly decision making ability and an understanding of what’s happening in the market is still a big priority for organisations.
This leads me to the third factor in the drop - the new silver bullet or ‘BI in sheep’s clothing’. There is currently a lot of hype in the market about analytics and what it can bring to an organisation. Yes there is a difference between BI, performance management and analytics from a technical and management function. Yet I suspect that a reason behind BI’s slide may be a terminology issue.
Gartner made a prediction that “through 2012, hype around predictive analytics will outpace available skill sets in 80 percent of organisations.” The key to this is the word predictive, as leaders of BI initiatives are being urged to go beyond historical reporting and develop more forward looking capabilities so they can detect changing patterns in the marketplace. The problem is that you need the foundations of good BI to start to do this successfully. And unfortunately there just aren’t enough people with these skills to go around.
The gloss has come off the BI lantern, and the three wishes of BI have been used up by many organisations and the new shiny lantern that the vendors are waving in front of user faces are terms like analytics and performance management. My advice, to use on old Latin saying “Caveat Emptor” – buyer beware.
These are just three things that have led to what I see as BI entering the mature phase of its life cycle. So I don’t believe BI is not important anymore, it remains a top priority for every CIO as they look to get the most out of their enterprise information, it still an important business tool, and it is still an under developed capability within many organisations.
Bottom line, the technology is less of an issue and the challenge is how to make it a core competency within an organisation.
As Gartner’s Mark McDonald says on his blog, “So is BI dead? Yes, death to just thinking about the technology. Long live the capability!”
Ian Bertram is managing vice president at Gartner, where he leads the global Business Intelligence team and is head of research for Asia Pacific. Comments to email@example.com
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