10 Business Intelligence Pitfalls to Avoid in the New Decade

    Business intelligence (BI) emerged 20 years ago as a tool for aiding decision-making. Originally seen as the preserve of analysts and board-level executives, it has slowly evolved into a more democratic medium as organizations have come to realize that decision-makers at all levels and in all departments need access to timely, relevant information. Today, a strong move toward the “consumerization” of BI is evident. Users are demanding the same speed and ease-of-use from their workplace software as ubiquitous tools like Google have delivered in their personal life.

    In short, a new breed of BI tools is eschewing cumbersome, complex technology and instead focusing on making the process as intuitive and rewarding as possible. This latest wave of BI – BI 2.0 – is serving a generation of technologically savvy, information-hungry users. Characterized by pioneering features like in-memory and associative analysis, powerful BI 2.0 tools are making a more “self-service” approach to reporting and analysis possible. With them, non-technical users can combine previously disconnected information for a complete view and analysis on the fly – without help from the IT department.

    So, BI software should be offering all the answers. But because many companies are still persevering with outdated BI 1.0 technologies, only 13 percent of UK companies polled in 2009 by NCC reported complete satisfaction with their BI projects. In fact, despite spending more than $7 billion on it in a year (IDC), businesses globally are in a worse shape than ever.

    According to IDC, “the challenges that BI implementations present mean that many organizations still struggle to deploy BI pervasively”. QlikTech has identified 10 common pitfalls associated with BI 1.0 that prevent organizations from getting full value from their BI investments.

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    Click through for 10 common business intelligence pitfalls you should avoid in the new decade, as outlined by QlikTech.

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    Starting without a defined and considered goal makes for a poor foundation for a BI project. So ask yourself: What is it you want to address? Is your goal the right goal? What will achieving it mean for your business? Is it clear and will you be personally measured against it?

    Goals need to be specific and aligned to your corporate objectives, but they don’t need to be big. With recent IDC research indicating that the volatile economy has resulted in organizations focusing on more tactical projects, with lower upfront spend and more quickly realized business benefits, it can actually help if you start with some very achievable “quick wins,” which ensure buy-in from all stakeholders at an early stage.

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    The success of a BI project largely depends on how engaged business users are in the process. Ignore them at your peril: A workforce that isn’t fully appraised of and involved in plans for change is likely to resist the unfamiliar. Besides, BI is as much about changing behavior as it is processes. An objective of many BI projects is to create a culture of continuous improvement and accountability, but failing to explain the benefits could lead to misunderstanding.

    So get buy-in early. Those quick wins will give the perception of project success and speed up adoption. Don’t get hung up on the technical details of the project, but rather focus on educating the people who will be using it. BI 2.0 technologies are in a better position to drive change management because they lend themselves to speedy deployment and they’re intuitive to use. Your resources will be better spent on an effective change management program than on weeks of application building, and you’ll see a faster time to value.

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    BI used to be owned by the finance and IT departments, but in the new decade, everyone, from boardroom to factory floor, should be free to access the information they need. This “self-service” approach is taking over from the traditional BI 1.0 model, which focused on delivering static reports – predefined by IT – that were out of date almost as soon as they were issued and only met the needs of a handful of elite power users.

    Ease of use is also driving a new era in collaborative business intelligence, where organizations are extending the reach of their BI strategies to include the exchange of information between internal and external parties. QlikView’s Anthony Deighton says: “Collaborative business intelligence can improve any industry. We’ve seen information in the hands of users impact everything from supply chain efficiencies in manufacturing to accelerating patient care in an emergency room.”

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    Quite simply, if you don’t know where you stand, how can you improve? A lack of visibility leads to procrastination, excuses, missed opportunities and a culture in which no one’s accountable and no one is prepared to put their head above the parapet and take action. Transparency should therefore be at an individual, rather than departmental, level.

    Gone are the days when just financial metrics are measured: New BI technologies mean it’s possible to apply the same levels of analysis across a range of areas for a truly holistic view of your business. The ability to track financial metrics like profit and loss, cash flow and general ledger information is a given. Core operational metrics such as resource allocation and production planning are becoming more common. But the very best of the new BI technologies are now making completely new areas of analysis possible – environmental metrics, for example, that assess market conditions or external factors like import/export duties. In the new decade, even social metrics will be measureable: Your BI will record and categorize Twitter mentions or track public perception of your brand.

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    Visibility without action is futile. But when projects take a long time to implement, momentum is lost and it can be all too easy to stop acting on the valuable information that’s being produced. It is the responsibility of director and CXO-level leaders to demonstrate their commitment to acting on intelligence. Putting formal meeting and review structures in place creates a strong feedback loop – BI should be used not only to understand where you are but also to measure the success of your resultant actions.

    Only by taking action, recording your activity and measuring your progress will you maintain the buy-in of others. There’s little point in having these new capabilities if you don’t use them to improve and can’t demonstrate their value. So strike while the iron’s hot and the benefits will be seen and appreciated.

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    Indeed, BI is such a powerful tool that organizations are often simply overwhelmed by its potential. Like a child in a sweet shop, the temptation is sometimes to gorge on everything available. Try to concentrate on what’s relevant and useful rather than just measuring, recording and disseminating data for the sake of it, and remember not to lose sight of your objectives: The intention is to distill your raw data into meaningful, actionable information, not to create even more.

    So keep it simple, and spend time choosing the right KPIs for your business, rather than simply tracking all available metrics. In a 2009 report on BI and performance management by analysts The Aberdeen Group, the authors claimed, “Businesses thrive or fail based on the effectiveness of their KPIs. Executives are increasingly feeling the pressure to establish the right metrics across all areas of their business [and] top performing companies are more than twice as likely to incorporate a review process into their KPI strategy.”

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    High-level input is required to keep projects on course and everyone involved motivated. The most progressive BI strategies are in a state of constant development: Rather than building toward one “big bang,” they are ingrained in a culture of continuous improvement.

    In this “incremental steps” approach, communication is critical, regardless of how good or bad the news is. Critical success factors should be continually measured and tracked, with the executive-level resources for this need allocated from day one. Consistent and dedicated sponsorship from the top demonstrates the importance of the project and helps establish it in company culture and values.

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    Delivering value within weeks – or even days – means giving people the motivation to change their behavior. The chosen technology must therefore support this methodology. Technology that is complex, cumbersome or heavily reliant on the IT function makes it difficult to demonstrate value quickly and maintain momentum and enthusiasm. And yet, many IT directors and managers are still spending millions on toxic, resource-draining assets like OLAP and data warehouses, which require large teams to develop pre-defined reports. Expensive and outdated technology like this is the reason more than 50 percent of business intelligence projects fail to deliver the expected benefit (Gartner).

    BI 2.0 tools put the impetus for change in the hands of the user. With BI tools such as QlikView, this new breed of self-service technology is better able to support a people-focused deployment because it’s simple to use and its benefits are immediately apparent.

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    Carefully selecting the right technology will go a long way to overcoming potential problems, but it is still essential to implement it simply and pragmatically. Small, agile, focused projects are less likely to eat up resources and goodwill, so focus on single goals and make sure they’re appropriately resourced. Users will need training, of course, but if that training takes more than three days, you know you’re dealing with the wrong technology.

    Remember: You’re aiming for a fast goal delivery, not a technical delivery. ROI is now the top priority, so payback time should be measured in days.

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    Effective BI strategies mean embracing change. They mean tackling issues and questions you know need answering – but are almost too frightened to ask. They sometimes force you to make tough decisions or require you to overcome resistance from people and departments who are protective of their data, which means the road to complete adoption can be tricky to negotiate in places.

    But you can trust BI. It gives you a single, definitive view of the truth so at least you can make decisions based on fact, rather than faith. Sometimes what it reveals surprises everyone: During a presentation for a major mobile phone provider, for example, QlikView uncovered £3 million worth of expenses that shouldn’t have been paid.

    The key is to make decisions and take action when your BI demonstrates a need to.

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