BI Technology Doesn’t Guarantee Intelligent Management

Walk into almost any business today and you will find an interesting management dynamic. Some senior managers will be shouting the value of business intelligence (BI) to everyone who will listen but when the door to their office is closed, they fear which key to push to get needed information or wait patiently for IT to bring them needed reports.

Other managers praise their investments in BI quickly showing everyone how they can dress up data so it looks fantastic, but when that same dressed up data shows a negative trend or outcome, they remain stuck, unable to ask WHY and get to a root cause so they can take measurable action.

Too many firms acquire and speak the language of BI. They spend money to dress up the data so it looks colorful, but the overall organization remains stuck in old habits.

Nobody will argue the need for performance metrics in business. Setting goals, monitoring market activities and trying to track the results of decisions are not new.

What needs to happen for business intelligence to be lifted to a new level?

First, business intelligence (BI) must be measured by how well it improves the actual performance of the management team. And performance management needs to be measured by how much value each level of management is creating for the overall enterprise.

Are your managers improving account profitability? Are your managers improving gross margins? Are your managers driving profitable sales growth? Can you track real performance of every level of management outside of your standard monthly reports? If not, you are talking the talk but still not walking the real BI path.

One critical realization for BI success is confronting the reality that buying a new piece of software that dresses up your summarized data into a glamourous look is not the answer. It looks nice and can be helpful but it is just the beginning.

True organizational BI begins when every level of management is not just seeing their performance metrics but enabled to begin interrogating the data and asking the WHY questions to find core activities that are causing problems or driving new opportunities.

A key element of data interrogation that often inhibits buy-in by managers is the reality that the process involved with data interrogation is not easy and takes too much time. If a manager must sit for hours or wait on IT to provide the details needed to get root cause answers, then long term success of the BI suite is in jeopardy.

Managers must be able to access and identify critical operational answers in seconds, not hours or days. This speed to answers requirement is a BI deal killer for many organizations who select the wrong technology to start with. Manager’s will stay engaged if they can get answers in 2-5 minutes or less, otherwise they don’t engage and the potential value of the technology is lost or severely diminished.

Another contributor to failed BI projects is little to no control of the data. If you begin with data that is not aligned, clean with all formulas and calculations validated so there is consistency for all levels of management, then bad results show up and managers begin to hesitate in using the tool. Every manager must have a complete and coherent picture of all activities.

Further, the data needs to be sustained at the transaction level and never summarized or aggregated. Otherwise, the manager can never rapidly interrogate the data, discover root cause issues and opportunities in seconds and make change decisions.

Next the BI solution must be adaptable to on-going competitive dynamics and corporate direction. If the company makes a strategic acquisition bringing on new product sets or sells a division or product line, the right BI tool must be able to adapt, realign new data sources and never remove managers from the immediate interrogation process.

When the dust settles, the BI technology selected for long term success and effectiveness should become a foundational tool to automate and implement a continuous improvement culture.

Done correctly, market decisions get made faster based on viewing clear transactional market activities, accountability for decisions improves at all levels of management, and rewards for driving value can be readily calculated and integrated into new compensation models.

The final measure is significantly improved profitability of the enterprise.

Karl Edmunds

About the Author

Karl Edmunds
Vice President, Salient Management Company

is a nationally recognized business leader and author with more than 20 years of experience working with suppliers, distributors, and retailers in the CPG industry. His focus is aligning technical solutions with sales, marketing, and organizational needs to drive long-term profitable growth.

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