Much is being written in the market about tools, technology sets, metadata management and reporting, writes Keith Jones MD of Harvey Jones Systems. Most of it really doesn’t take cognisance of the underlying simple goal of any business intelligence (BI) solution, which is to empower better business decisions. Too much time is spent looking at options and technologies and deciding on whether scorecarding or dashboarding is the way to go, and which reporting technology set should be used.
BI is a journey – and it will never be absolutely “right”, and nor should it. Saying you have all the BI you need is like saying you have absolutely optimised your business and there is nothing more you can do. Highly unlikely.
Much time is spent looking at metadata, defining business rules and deciding on a company standard. This is all useful stuff, but it still misses the real point. What are the business actually trying to do?
IT doesn’t really know; there are usually only one or two senior people in any IT department who really “get it” from a business perspective. The accounting department certainly doesn’t know, because it is continuing to produce its nicely formatted, irrelevant financial statements.
All complying to GAAP, SOX, IFS, FICA or whatever other standards are needed. The truth is that while these pretty reports provide a vaguely useful benchmarking tool to see how you are doing compared to the history or your peers, very few real business decisions are made by relying exclusively on them.
Business needs to step up to the mark and take responsibility for what it is trying to do. Instead of explaining what a report should look like – “I would like a stock report, by product, by channel by month”, or “I would like my sales information in a way I can analyse it myself’”, business needs to explain what it is doing, why and what the business outcomes from its decisions will be.
“I would like a stock report so I can see which regions are carrying too much stock. I would like the cost of the stock, the cost of carrying the stock, including transport and insurance, and to see what the likelihood of me shifting that stock in the next few weeks is. Then I will decide if I should return the stock, discount it or hang on to it.”
This is a complex request – without a doubt – but the value of the data produced will be enormous, and actionable, and lead to immediate ROI. This is a point requirement, that will not address the greater needs of the organisation, may not help with the financials and may not help with sales, but it will deliver what any capital investment should: a return.
The work involved in allocating costs, defining true profit, or actual stock on hand is enormous, but the value of the data is exponentially so. If a dashboard is the best way to see this – so be it; if not, an Excel spreadsheet may do. At the end of the day, it is not a technology decision or a technology process – it is a business decision driven by business needs.
As mentioned earlier, it’s not about getting everything right, it’s about just doing it better. If IT drives the process, it will ease the process, it will probably be a very clever and a state-of-the-art solution, but it may not be better.
If accounting drives the process, it will take longer and the deliverables will be more confusing. There will be accruals, amortisations, back-dated journals, allowances, depreciations and all sorts of arcane practices that their dark art dictates.
To get to the real heart of a BI solution, the business must really think about what it is trying to do, articulate the issues and be prepared to take ownership of the solution. It must have the end in mind before it starts; if executives don’t know where they are going, they can’t get lost, but they also can’t get anywhere either.