WASHINGTON — Open any newspaper these days and you're sure to come across examples of "economic hot potato." Not familiar with the phrase? Gartner analyst Kurt Schlegel uses the notion to describe the process of reaping rewards for yourself as you pass any attendant risk along to others. The disconnect between risk and reward has gotten U.S. financial institutions into a lot of trouble lately, and, according to Schlegel and his fellow Gartner analyst John Van Decker, the problem comes down to not measuring risk, and the answer can be found in business intelligence (BI).
"Now more than ever we need BI," Schlegel told attendees during the welcoming keynote here this morning at Gartner's seventh annual Business Intelligence Summit. "We need to make it transparent and useful to dial into the details and make decisions." If you're a publically traded company without the systems to monitor the health of your business, he added, the 21st Century Disclosure Act will force you to change your ways. Best to stay ahead, he recommended.
The need for BI appears to be evident -- particularly with chief information officers. According to the 2009 Gartner Survey, among CIOs making investments, BI once again topped the priority list -- for the fourth year running. Despite that streak, BI adoption continues to lag, the analysts said, and its value eludes many users.
Adoption has stagnated at between 15 percent and 20 percent, Schlegel told the audience. Why are the majority of business users left out in the cold? The problem, Schlegel said, is that the average staffer tasked with BI has a lot on her plate. "Most [BI workers] I talk to are frustrated," he said. "They feel they're doing everything right -- they're integrating data, building warehouses, writing reports -- but people still don't show up." The problem seems to be a disconnect between reality and priority, he said, the root causes of which are easy to spot:
- No partnership between technology and business operations: This leads to a lot of finger-pointing, and can destroy the customer-vendor dynamic.
- No link to corporate strategy: BI started compartmentally, a characteristic that needs to change, the analysts said. BI must be built from the top down, with strategies developed by senior executives applied to business intelligence efforts. Don't have a strategy? You're in for some trouble.
- No connection to the process: "For too long, BI has been overtly disconnected from business processes," Schlegel said. "Start thinking of the process itself as a design point and make sure decisions are made in a fact-driven way."
- No governance or too much governance: Compartmentalized BI once had its advantages. Organizations often had a "go-to" person who would crunch the right numbers and do the analysis. This worked fairly well, Schlegel said, until more employees started taking on BI. Soon enough, 100 employees were working on BI independently -- a recipe for fragmentation. Centralizing BI, though, can exacerbate existing difficulties between technology and business users. Organizations must seek balance, Schelegel said, with the goal being to empower teams rather than groups.
- No skills: "It's not just about I.T. not having skills," Van Decker told the crowd. "It's the business users." Gaps in skill often exist: Users are empowered with sophisticated tools to do forecasting and manage budgets, yet aren't able to fully optimize those tools. When results fall short, companies need to address training issues before blaming the technology.
Van Decker and Schlegel brought forth the following essentials for organizations looking to avoid those five pitfalls:
- Build a business case;
- enlist business leaders;
- deploy metrics frameworks;
- apply analytics;
- establish standards;
- understand your markets;
- integrate disparate data;
- improve data quality, and
- apply BI to cost optimization.
The keynote presenters offered two predictions for BI's position in the coming years. By 2012, they contended, more than 35 percent of the global 5000 companies will regularly fail to make critical decisions thanks to a lack of timely information. Despite having the technology in place, companies will still struggle to get the decisions right and optimize the value of the BI tools. The analysts also predicted that, by 2012, business units will control at least 40 percent of the total budget for BI. This can be either good or bad, they stated: Business users may want to take control back, which is a positive, but it could also open the door to technology that incorrectly fits the organization's framework.
Schlegel recommended to attendees that they go back and pitch BI business cases to senior management. "Get out of your comfort zone and play new roles," he said. "One role is of evangelist. You have to do that." He also emphasized the need to change the culture of the company in order to get people to understand the value of fact-based decision-making. Don't take the easy way out, he said.
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