How critical is business intelligence?

I was involved with three go-lives this month. Not all of them required the same level of engagement, that was the major survival factor for me, but nevertheless I got into an interesting discussion with a colleague.

– So it was three projects this month, huh? All of the NAV? – she asked.

– No, it was one NAV, two of them were business intelligence ones.

– Ah, ok, so they are not business critical. – she concluded.

This clicked a switch in my head. That exactly was what I normally thought of business intelligence. It is reporting, scorecarding, analysis, dragging’n’dropping dimensions, playing with numbers… Not something that a company can’t really go without. Or at the very least, not something that would cause a business to halt. At that, it’s really not business critical, at least not from business continuity perspective.

But that take-it-for-granted way of thinking that I obviously had about business intelligence, which I only realized when I heard someone else express the same, challenged me. So, just for fun, and as a thought experiment, I decided to take an opposite position:

– Oh, but they are business critical.

– How come? – said she – It is just reporting, right? How can a report be business critical?

– A report as such probably can’t, but report is there to serve a purpose. A business intelligence system is a decision support system. How critical is decision making for a company?

Thence it sprang.

At that very moment I asked myself the same question. How critical decision making really is? From a perspective of a typical ERP consultant, it is easy to say that ERP systems are critical. If your software has blocked, and a truck is waiting for a shipment note, and it is frozen fish it is delivering, there is a limited amount of time before your merchandise becomes unusable, and you can easily quantify, in monetary terms, how much does an ERP system downtime cost you.

– But how can you calculate a cost of a delayed decision? – she insisted – Finally, if a strategic decision is made an hour late, it doesn’t change anything.

She almost made a point. But decisions aren’t made at strategic level only. It’s not only the top executives that make decisions – of course, if a company strategy comes an hour later than planned, it won’t usually change a bit. But decisions are made at all levels. A doorman is deciding who to admit to a building, a truck driver is deciding which route to take, a material planner is deciding which exact interchangeable item to use for a process, a purchaser is deciding which purchasing order to give preference. Tons of operational decisions are brought at a snap, every day, everywhere, and most of them based on intuition, hunch, gut feeling, experience.

Business intelligence systems are there to replace all of these. Somehow, they are more reliable. Another Seth’s post just supports me in this thinking. Sometimes, we do something, or decide something because we think the answer is obvious. When we crunch the numbers, we find out how wrong we really were. Business intelligence can fix this.

If it costs you more to use item A instead of item B to manufacture your finished products, how much does an hour of not deciding to swap really cost you? What if it costs the same, but products with component A have lower defect rate than those with component B, how much does it cost you then? What if you decided to change an inefficient route with a more efficient one? What if you decided to exchange your fast manufacturing equipment with even faster one, instead of changing two slow ones with only slightly faster ones? There are tons of similar what-ifs, at all levels, strategic, tactical and operational.

It’s hard to get a business intelligence system to work efficiently on all these levels, but once you do, wouldn’t your decisions be less costly? Wouldn’t any costs related to bad decision making become more obvious?

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7 Responses to “How critical is business intelligence?”

  1. Michiel van Oosterhout Says:

    Dear Vjekoslav Babic,
    I just read your article. It’s very recognizable. I work as a Navision BI consultant for a Navision Solution center in the Netherlands and sometimes I have the same discussions with my customers or colleagues. Thanks for posting this article. I enjoyed it.
    Regards,
    Michiel van Oosterhout

  2. Vjeko Says:

    Hi Michiel: thanks for comments, I am glad you find this useful. I thought a lot about writing something about Business Analytics – built-in feature for BI – or how to make it really useful. But then my focus shifted away. What’s your experience with BI for NAV – what client app do you use? Do you use Business Analytics (basic or advanced)?

  3. Robert Says:

    It was once said, that one has to decide (or choose) only when there is not enough information. When you have all the information, the best choice is obvious so no need to decide.

    And this is the shortest you can describe any BI system. It collects and compares information way better than anyone, so you don’t have to decide at the end, because the best option is obvious.

    Yet in most cases there is a missing link between BI (which points to the best option) and implementation of that option (e.g. changing the truck route).

  4. Vjeko Says:

    Robert: Nicely put! This makes me think: people are getting increasingly more replaced by machines. Machines on factory lines, automated teller machines, toll-boot machines, auto-pilots. If the BI really gets where you suggest its natural destination is, then management can be replaced by a machine, too 🙂
    I don’t know where this comes from, so I can’t give proper credit, but all this has reminded me of it:
    Factories of the future will have only two employees: a man, and a dog. The man will be there to feed the dog. The dog will be there to make sure the man doesn’t touch anything.

  5. Thomas R. Kristiansen Says:

    Dear Vjekoslav Babic and co.

    I just read the article and comments – very interesting views! At first when a started reading the article I got a lot of comments but after reading the end I agree very much with you. And I can give an answer to some of your questions.

    How can a report be business critical? – A report in it selves is not very business critical, however when it is connected to an analysis and you have the opportunity to drill down in the information it becomes very useful.

    Besides all your great examples of where BI can be a business helping tool it can also be used to evaluate and measure sales. Which reseller or seller create the most turnover (this is what the report shows you) then drill down or make an analyses and see where, why, and if the highest turnover is equal the highest profit? And so on…

    Furthermore as you mention the smart thing with BI is that you get the information right away and not an hour to late, to all levels of the company.

    TARGIT BI Suite meets all these features. TARGIT BI Suite gives all level employees in an organization access to dashboards, analyses and reports in the fewest clicks possible. With patented technology a user can move back and forth between reports, analysis and dashboards drilling down to very detailed information. Dynamic notification agents can provide users with crucial information via email or directly on the desktop rather than relying on manual weekly reports.

    Actually “Business Analytics – built-in feature for BI” is an (OEM) smaller version of TARGIT BI Suite, which Microsoft updates. Furthermore TARGIT A/S is a certified Microsoft Gold Partner. TARGIT BI Suite do therefore work with Microsoft ERP systems and a lot more (NAV, AX, GP, SAP, Oracle…) Implementation is therefore very easy and most often done in cooperation with TARGIT. Regarding clients TARGIT offers both a desktop and web clients.

    TARGIT BI Suite does not get you to the man and the dog stage 🙂 but will help you make decisions!
    See http://www.tarigt.com

  6. Vjeko Says:

    Hi Thomas,

    Thanks for comments, and thanks for your little advertisement of TARGIT BI Suite. I had a chance to work with Business Analytics Advanced, which is basically a TARGIT product as you say, and the users always found it extremely easy to use. I’ve heared that the latest version of your product is even better, but I didn’t get a chance to play with it. I hope I will catch some time to do so, however.

    All the best,

    Vjeko

    P.S. Correct URL is http://www.targit.com/ – you’ve bee so eager to leave the comment ASAP 😉

  7. Thomas R. Kristiansen Says:

    Hi Vjeko

    Sound good. Nice to hear that you have experince with Targit. You can see a demo and some videos on:

    http://www.targit.com/Products/Demo_and_Videos/Online_Demo.aspx

    And thank you for the corrections 🙂

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