Does your company’s leadership think that having a robust Business Intelligence function is only viable for large corporations? Think again. In today’s global world, with information shared in the blink of an eye it is imperative that all companies know their numbers and manage by them. The information that a Business Intelligence (BI) function can provide can mean the difference between growth and competitive decline. Utilizing BI has been proven to result in significant competitive advantages both for small companies as well as large corporations.
Business Intelligence Planning
Initiating a Business Intelligence function in your company does not need to be excessively expensive but does require careful planning. There are five key steps in developing a plan for a BI function that, if followed, increase your chance for success. The level of complexity required for these steps is dependent on the size and complexity of your organization. Small companies can rapidly design a BI program to accelerate the process with the help of a consultant with BI experience.
The five steps are:
- Evaluate the company’s strategic objectives for critical success factors;
- Design the Performance Measurement Blueprint;
- Perform a Gap Analysis;
- Develop Key Performance Indicators (KPIs); and
- Develop the high level plan for Reporting – Scorecards, Dashboards, Reports
It is important to involve top management early in this process. Their support will be critical to getting funding for the BI program once the analysis has been done. Depending on the company culture however a draft of a proposal detailing the potential costs and benefits early on may be beneficial. A clear demonstration of the need for a BI program can facilitate its approval and funding.
It is always best to start the planning process with an evaluation of the company’s strategic objectives. To maximize the probability of success, any BI program should be aligned to the mission, vision, and the strategic objectives of the organization. Another critical success factor is documenting the benefits of a BI program up front in order to garner the support of top management or ownership.
Once you have determined how to align to the strategic objectives take a look at what are the expected levels of performance in order to meet or exceed these objectives. Determine any dependencies between objectives in this review. This will help you determine where you can expect cost savings and cost avoidances. An initial draft of non-tangible benefits should be developed at this time. Common benefits include improving quality, improving customer retention, gaining market share, reducing costs, meeting regulatory requirements, and fostering continuous improvement and innovation.
The next two steps are to identify the high level requirements for data collection and to perform a gap analysis. The gap analysis will identify any gaps in current capabilities to measure, analyze, and present the elements of the performance plan. From there you can start to develop the KPIs that are needed to track performance. The last step of the planning process is to determine the high level plan for what reporting components will be needed. Generally scorecards and reports will be needed for managers and staff while dashboards will be needed for management.
Before you can complete the proposal for establishing a BI program you will need to determine the expected costs and benefits for presentation to management. This involves determining how the program will be designed. There are several options to consider in developing your capabilities for initiating a BI function. Each option will have different costs, timelines, and pros and cons associated with it.
The most popular options for launching a BI program are:
- Outsourcing a portion or the entire function;
- Purchasing a package through one of the many BI vendors; or
- Starting small with an in-house team.
The costs and the benefits for each of these options should be included in the BI program proposal. For a small company the third option is often the best initial choice due to the lower cost. However the cost of outsourcing and vendor packages can often be competitive and can decrease the time to adoption.
With all aspects of the BI plan identified the last step is to put them together in a proposal that clearly shows the associated costs and the benefits of having a BI program. The most compelling benefit in today’s increasingly competitive environment is to gain the advantages that an analytically focused strategy can give to your company’s success regardless of its size.
—Written by Linda Williams who is partnered with Datacenter Trust and also has a Business Intelligence consulting practice where she provides businesses with assistance in performance measurement, process improvement, and cost reduction.