Ask the Experts: Should you invest in business intelligence?
Naked CIO and Peter Cochrane share their views...
Published: 30 June 2009 09:30 GMT by silicon.com
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silicon.com experts weigh in on whether analytics can help businesses weather turbulent economic times.
Q: How helpful are business intelligence tools to the bottom line? Would you consider them a key investment during a recession?
Naked CIO, IT leader and silicon.com columnist:
Business intelligence (BI) is a useful tool. Understanding its worth in helping your bottom line is all in how you use it as a business. Many companies continue to engage in BI projects without consideration of their information and data enterprise - this often leads to results that don't add significant value.
This is due to organisations not investing time and money into the quality, standardisation and consolidation of data within their organisations.
Business intelligence can serve a wide variety of functions. In most organisations it's still very much used as a financial reporting system - which in my opinion does not hold intrinsic business value in this economy, as it acts as more of a convenience tool than a value-oriented one.
Organisations that have exploited consumer intelligence through BI tools can reduce the cost of sales and marketing and increase results. In these cases there is a very viable argument for investment but only if you already have an overriding and comprehensive data model and strategy.
Some argue that increased analytics and ad hoc reporting allow organisations to better understand trends within their business and apply a variety of different measures and attributes to understanding these trends.
But I believe that increased reporting and analysis is very difficult to quantify in terms of residual value and equally these areas are often the first to be cut in times of recession. Also, the need for capable staff to analyse the data effectively may be limited and thus so would the value of the tool.
A comprehensive strategy is key to realising success with BI - and if you have this and already have standardised and good quality data, a BI system can enhance the value of your information.
Peter Cochrane, tech guru and silicon.com blogger:
I can't imagine running any business without good intelligence tools - they are essential to business and always a good investment. Just like the military we need to know what our competitors and friends are doing and thinking, and how we can best shape our products and services. Without a little inside information it is near impossible to get it right, and our chances of winning are definitely degraded.
Without business intelligence a company operating is operating partially blind! We have to gather information, and it starts with our people and personal contacts and that 'nod and a wink' over coffee. Every customer contact point is an opportunity to collect information, ask questions and garner opinion. The really clever trick is the recoding, orchestration and analysis of the continual flow of data. Fortunately, there are a large number of professional tools available for doing just that, including data mining.
Today, customer contact extends beyond the meeting, phone, mobile and email through to social networks that span the globe and every industry. So it is not unusual for companies to be drowning under a sea of customer and market-related data. The trick is to get the gathering and analysis automated!
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