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The Phrase Business Intelligence

January 5, 2010

I first came across the word “Business Intelligence” at the 1999 Cognos meeting in Toronto when their CEO announced the “new IT category” as part of the leadership strategy.   Their marketing gurus must not have done a manual search or focus group since there wasn’t any indication that anyone really knew why it’s called “business intelligence.”  Let’s look at the historical words in this category of making data more meaningful.  Throughout my 29-year career, Information Technology Professionals have tended to over-complicate what they are trying to accomplish by coming up with descriptive labels that tend to remind me of a NASA space mission.   Back in the Eighties, we called it Decision Support Systems (“DSS”).  In the early Nineties, it was referred to as Executive Information Systems (“EIS”).  Then, with the explosion of relational data base technology, the new movement became coined as various tangible models:   Data Warehousing, Data Marts, Closets, Data Mining, and the like.

From an IT perspective, there are a lot of differences between these definitions throughout the years.  At the same time, how do they really differ from a business executive viewpoint?   Are the decisions in business being made today differ significantly from decisions that were made yesterday?  Does the thinking process differ from an analytical viewpoint?  Does having more data mean that you can make better decisions?  Are decision-makers better off with all of the data that is available?   How does the business executive think about “business intelligence” from an information viewpoint?

Here’s a three-part “Maslow’s Triangle” layered model to think about Business Intelligence from a business perspective.

1.  How’s Business?

First, at the base of the triangle, you have to ask “How’s Business?”   This layer really emphasizes “time over periods” of transactions.    Traditionally, this area is termed “transactional reporting” and simply put, is giving the user their numerical tabulation of data at the end of a period.   What would a business person define as “Best in Class” in this area?   Give me my reports as near-time as possible for the period that I am looking at and be able to sub-category my different business lines, product lines, financial divisions, etc.  Most of the data could be described as the data from “double-entry bookkeeping systems.”  With today’s ERP-style systems, this kind of information is fairly accessible as long as you are dependent on internal data only.   Some data feeds may be external feeds or internal non-structured data sources that still have the same timeframe.  Examples would include “customer satisfaction” data, quality data, and other operational inputs.

For example:

“What is the revenue over the last quarter?”

“How many X was sold in the last week?”

“What is the profit for the month?”

2.  Why?

The next layer up the triangle is simply put “Why?”   Why did the business’ Eastern Region have a 5% increase in sales year over year?  Why did we miss our numbers in the last week of the quarter?  Why did our market share grow in our mature product line in the last 2 quarters?

3.  What If?

The last layer of the triangle is “What If?”   If one can receive their business results from “How’s Business” and then is able to determine “Why” the business performed in this fashion, the “What If?” pinnacle of the triangle will provide a roadmap for the decision-maker to model their potential decisions that they have in mind.

For example, if one knows their financial performance and also sees where the business over-achieved and where it under-achieved, it is able to move resources of the business (management & money) to the area of need.  Whether the strategy is to provide more or less resource is up to the person involved.   The numbers themselves are not going to make the decision.

So, then is “Business Intelligence” an oversold phrase in the world of Information Technology? A “Qualified Yes” and a “Qualified No.”   The challenge today is that the tools actually work and work well if the approach taken is right.   At the same time, recent publications and noted experts all agree that the road to Business Intelligence is cluttered with a lot of failed attempts, a lot of capital spend that isn’t going to be realized from an investment viewpoint, and a lot of disenfranchised users.

I’ll write about this dilemma in my next blog.

Written by John Bostick · Filed Under Business Intelligence 

Comments

2 Responses to “The Phrase Business Intelligence”

  1. LUCRUM Incorporated on January 5th, 2010 7:20 pm

    LUCRUM Executive Chair John Bostick discusses the phrase Business Intelligence – http://bit.ly/5mvr4U

  2. davidebowman on January 5th, 2010 7:21 pm

    RT @LUCRUMinc: LUCRUM Executive Chair John Bostick discusses the phrase Business Intelligence – http://bit.ly/5mvr4U

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