If there was a management cliche hall of fame, the old adage "You can't manage what you don't measure" would surely be found there. The trouble with cliches, however, is people hear them so often they stop thinking about the meaning behind them.
Perhaps that's why, despite business intelligence's popularity, quite a few companies are not measuring the effectiveness of their BI initiatives. One-third of respondents to a recent IDC survey said they weren't sure how to measure the benefits of business analytics projects and solutions. Though it almost sounds like another bit of cliched advice, downing a few shots to cure a hangover, IDC suggests BI vendors and consultants could better illustrate the value of BI to clients by applying analytics to their BI efforts. (Hope it works better than the "hair of the dog that bit you" advice did for me in college.) According to IDC:
Technology vendors and consultants need to focus on applying business intelligence and analytics on the business analytics projects to ensure that BI groups are able to clearly articulate the benefits to their constituents and ensure ongoing funding of projects.
Of course, vendors and consultants can't force folks to do so. In a TDWI article, Michael Corcoran, SVP and chief marketing officer with BI provider Information Builders, says clients often resist using the built-in monitoring feature found in his company's WebFOCUS software. In addition to such built-in monitoring tools, the article mentions application performance-management tools from companies like BMC Software, CA and Compuware and a usage and workload analytics tool specifically geared toward BI from a company called Appfluent Technology.
I wonder how much good it does to monitor usage, though, if there's no accompanying effort to link it to broader organizational goals. That's often a difficult task, as I wrote last spring in an article about tactical vs. more strategic BI. Dorothy Miller, founder of consulting company BI Metrics and author of three books about BI, told me requirements and goals for BI "usually seem fairly obvious to those who are waiting for the information." Thus, she said, "The time and resources are considered better spent on providing the business intelligence rather than measuring the benefits after the fact."
Yet just generating more reports or having more users doesn't necessarily drive value, said another of my story sources, BI analyst Nigel Pendse, who until recently produced an annual BI report, a task that was recently taken over by BI Verdict colleague Barney Finucane. While producing better and more frequent reports will in theory make employees more productive, it could mean they "just spend more time looking at reports unproductively," said Pendse who advised establishing upfront productivity goals and sticking to them. He told me:
I think it's perfectly possible to say you can reduce your increase in headcount or maybe move people to more strategic tasks. Everyone says they do that, so fine, measure it. Tell me which people are no longer involved in writing reports for end users and what they are doing instead. If everybody knows things like this will be measured upfront, the priorities during the implementation will focus on making that happen. Otherwise, people might dicker around making reports look pretty, which has no business value, rather than getting it done quicker, which does have a business value.
Considering IDC's findings, companies might do well to focus first on tactical returns and then move on to connecting BI to broader corporate goals. Peter Thomas, the head of Group IT Development at Element Six who led an award-winning BI project called EMIR for his former employer, The Chubb Group of Insurance Companies, suggested conducting a small-scale feasibility study in an area identified as a business "pain point." Rather than doing a full analysis with global data, perform an analysis for a single country, for instance. "Then you've gone through an iteration, which gives you a better sense of the cost and complexity, and gains you some credibility as well," he explained.
Though that's a good starting point, companies will derive the most value from BI software when it collects data from the entire company and sits squarely in the middle of business operations, said Thomas, who blogs about BI .