Up to 80% of the investment in a Business Intelligence implementation is wasted and new financial commitments will be required within three years – when the cycle may repeat itself.
The estimate comes from Quintica, providers of ITIL-compliant enterprise management solutions to some of South Africa’s leading corporates.
The fault lies with the “tool-based mindset” that has traditionally applied in the BI environment, says Quintica technology director Edward Carbutt.
“The focus is on nuts and bolts rather than strategic objectives,” Carbutt says.
“A manager applies new tools and achieves a 25% time-saving with a particular process. But if overall strategic objectives had been considered at the outset, he might have saved 100% by aligning the process with the objectives.
“This failure to see the big picture is typical.”
Management myopia is partly explained by BI history.
Migration from new iteration to new iteration has characterised BI since the introduction of the first digital spreadsheets in the early 1990s. Getting a “sharper tool rather than a sharper focus on the entire business” becomes a reflex.
Carbutt notes: “Business Intelligence is not a tool. It’s a holistic process for turning data into information; information into knowledge and knowledge into insight. Identifying the strategic objective is crucial. Only then can you progress to the reporting metrics and key performance indicators (KPIs).
“We see the biggest gains in efficiency, cost savings and productivity when the strategic objective is defined and communicated to all role-players. If you fix the process but ignore the people, you get a partial solution at best.”
Over time, disappointment at only the partial fulfilment of BI ambitions and the need to reinvest create management resistance to a new set of cost inputs. The effect of a BI installation on the cost graph is an immediate uptick. Bringing down the curve in an even more dramatic fashion is the challenge.
Carbutt points out: “Industry experience confirms that the graph comes down significantly post-investment. The graph would look better still if strategic application of BI unlocked all potential value. At the moment, BI is only scratching the surface. Much greater gains are possible.”
Strategic utilisation of BI has been impeded by lack of an integrated platform to facilitate a total business overview without blind-spots.
First-generation solutions were discrete. Putting the information puzzle together took buy-in from the top and a determined organisation-wide effort.
Carbutt explains: “Only recently have we seen the deployment of a new generation of tools that take a holistic view of the business environment.
“For example, a breakthrough development such as the Proxima Centauri dashboard allows senior executives to drive the organisation by reference to all relevant business metrics, KPIs and system processes. This new solution is based on Six Sigma quality management methodology and gives an organisation a meaningful overview backed by precise data.
“We’re hoping the availability of a strategic toolkit like Proxima Centauri will encourage organisations to revisit the BI terrain and achieve wide-ranging benefits.
“BI is much more than online analytical processing. The people part of the equation demands much greater attention. This holds huge significance for the entire economy if South Africa is to loosen the skills constraints that block the path to growth.”
Quintica has instituted operational service management programmes at client companies such as Dimension Data and Primedia Content, to name a few.
A key challenge identified by Quintica is the pursuit of common purpose. Many South African companies achieve major efficiency gains through specialisation and focus, but then tread water. Momentum is often regained by taking off the blinkers and creating common vision.
Says Carbutt: “To achieve operational management success, a company needs to unleash the synergistic sum of the knowledge, skills and attitudes of each individual contributor to the business.
“Training and retraining may be required to build competency. The key is establishing the purpose of each individual – what he or she does that contributes value to the company and justifies a salary.
“Defining purpose is impossible without clear communication of the strategic objective of the business. Tools that demolish the silos and pool the knowledge are vital to this process, which is why a fresh, strategic approach to BI is so important.”