The economic downturn could speed up the deployment of business-intelligence tools to non-specialist staff. But that process of democratisation raises specific problems, as Cath Everett reports.
Some experts think the economic chill will boost sales of business-intelligence (BI) tools, as organisations re-evaluate operations to help weather the recession.
To date, deployment of BI tools has often been piecemeal and confined to certain departments. But that is expected to change as financial-services companies lead the charge towards more enterprise-wide BI. The aim is to identify ways of boosting revenues and segment customer groups more clearly.
Alastair Taylor, a managing consultant at PA Consulting, explains: "Significant business change often triggers big-bang, enterprise-wide BI, and the big change in the economic climate is forcing many customers to rethink their business models."
That climate is encouraging enterprises to explore potential efficiencies across the organisation to enhance cross- and up-selling and identify areas for cost-cutting. Businesses want to find ways of assessing "the relative return on investment today, tomorrow and in the future as the basis of where they put their capital", Taylor adds.
Cheaper BI tools
The economic downturn, combined with a desire to share information more widely in the organisation, is also affecting the tools companies are buying to supplement existing systems.
Dale Vile, managing director of analyst firm Freeform Dynamics, says: "It used to be OK to charge £2,000 per seat for power users, but that's no longer acceptable if you're talking about deployment to thousands of people. So there's been a shift away from high-powered desktop tools for management or performance information and a move towards desktop tools that are already there."
That shift has occurred as operational personnel at all levels have been given increasing responsibility for the performance of the business. Vile says that change has meant information has become almost a right rather than a privilege.
"If you pay someone a bonus based on performance and censure them if they don't hit targets, you have to give them the appropriate tools and information to do their job. So the idea of pushing out information to people has become quite a serious issue," he adds.
While people started buying low-cost products from vendors such as Microsoft about 18 months ago, the downturn has accelerated that trend.
"The financial climate is encouraging firms to go down this route with a low capital outlay. The 'BI for the masses' approach is one of 'give it a go and see how it works', but the cost of having a go has got a lot lower," says PA Consulting's Taylor.
Many large companies are putting effort into devising enterprise-wide BI strategies, but the problems they face are more political than technical.
Because BI initiatives involve data management, too many firms view them as IT projects, rather than business programmes, and delegate sole responsibility to the IT director without the high-level sponsorship required for cultural change.
Vile explains: "Projects don't tend to fail because of technical issues these days, but because organisations haven't clearly defined what they're trying to achieve and because they haven't got the right buy-in."
In fact, according to Gartner, only five to 10 percent of organisations have a BI strategy, with most preferring to act on gut feeling.
But that ad hoc approach can make life difficult, especially as it can spark departmental infighting...
...over whose views should be accommodated first. Conflicts can arise from issues such as defining common terms — 'revenues', for example — or agreeing which particular business unit owns a certain piece of data.
As a result, Andreas Bitterer, a vice president of research at Gartner, says setting up a BI competency centre is a must, not least to raise the profile of BI in the organisation and to give any new programme teeth. However, he acknowledges that few enterprises have implemented this measure.
"If BI is important to an organisation, there's no way it can just do it on the side. There has to be some form of governance body, whether it's called a programme office, competency centre or whatever," he says.
"The aim is to build a bridge between IT and the business to define a roadmap for action. It's hard and people will get bloody noses in the process, but it's about ensuring that money is spent wisely for business benefit," Bitterer adds.
Such competency centres should be staffed by eight to 12 people for an enterprise of 3,000 heads and include representatives from IT, as well as business stakeholders from areas such as finance, sales and marketing.
Their role is to define and articulate requirements and to decide who needs what information and where. It is also important to audit the information that supports these goals and assess its quality, to ascertain whether it should be cleansed, aggregated or supplemented, perhaps by third-party sources.
However, after defining a strategy, competency-centre members must devise a business case for each project and then prioritise projects according to potential benefits rather than on the basis of who shouts the loudest.
These initiatives are large change-management programmes and must be managed as such. "One of the fatal flaws is that people believe: 'If we build it, they will come.' People have to be involved from day one or they'll show resistance to changing anything; it's one of the biggest roadblocks," explains Bitterer.
So, while the benefits of carefully defined projects should ideally be self-evident to end users, if resistance remains an issue, another approach is to hit managers in the pocket.
"You can say: 'If you don't want to change, it will cost you this much. If you keep your old tool, you'll be charged this much by the helpdesk for sitting outside the BI standard.' As soon as people feel it in their wallets or budgets, it's a good lever for change," Bitterer says.
PA Consulting's Taylor says BI-related processes must also be embedded into the way the business is run. That integration could include setting weekly or monthly performance objectives for staff, based on BI findings. "Unless there's a regular feedback loop, how can people change their behaviour to fit corporate aims? Annual feedback just isn't enough," Taylor says.
Another factor to bear in mind is that enterprise BI programmes run over many years and their sheer complexity means they cannot be undertaken in one fell swoop. Once begun, they also never end.
Gartner's Bitterer says conditions change, whether through external regulations, an internal shift of strategy or the acquisition of another company. "That means BI programmes continually need to change too and so they're never finished," he concludes.