No quick ROI from business intelligence: DMR Canada

Companies that fail to take a holistic view of the enterprise when implementing a business intelligence plan may fail to cash-in on expected results and wind up with just more information and no means to translate it all into dollars and sense.

According to Scott Garvey, president of DMR Consulting Canada, business intelligence (BI) is more than just building a good data warehouse. Speaking at B2BPower 2001 in Toronto Wednesday, Garvey said BI is “the intelligence behind business”, adding that companies need a system that allows them to collect, manage and use information effectively.

To get the most out of BI, Garvey recommends a strategy that includes stepping back and understanding the company’s information needs before implementing any kind of BI tool. He also suggests building a BI team with many players from across the company who understand the ultimate business goal.

Users must also acknowledge that there will be data quality issues at the start. Above all, there has to be an acknowledgment that using BI tools won’t result in immediate returns.

“Some technology vendors promise BI results in three weeks, but it is likely that won’t happen. It can’t be implemented in three easy steps,” said Garvey.

Despite failures in the past, spending on BI continues to grow.

IDC predicts that even with an economic slow down, BI software revenue will grow at a rate of 27 per cent per year from $3.6 billion in 2000, to $12 billion by 2005.

“That growth is being spurred by demand for increased tracking, analysis and dissemination of information,” said Garvey. “Despite the challenges in implementing effective BI, Canadian business leaders are continuing to make investment decisions knowing they have a responsibility to the success of the company because BI drives bottom-line results.”

Garvey pointed to British Columbia’s liquor agency as one success story where the public sector was able to use BI to improve efficiencies. The agency, which sends $600 million in annual revenue to B.C. government coffers, found ways to improve supply chain efficiencies by taking a closer look at seasonal consumption patterns. The 550 liquor stores in the province were able to reduce the amount of unpopular stock it had sitting on store shelves.

“It’s a good example of how a public organization can get lean and mean,” said Garvey. “By Web-enabling the data warehouse to better manage buying levels, BI ensured cash flow otherwise lost was efficiently channeled back to government programs and at the same time, people in Nanimo could get their hands on a quality Merlot.”

However, unlike BC Liquor, indications are that most decision-makers aren’t taking a careful look at how to go about a successful BI implementation.

Proper use of BI requires more than just a good data warehouse – its what companies do with the information and how they get staff involved in the project that counts.

“It’s important to remember that BI is not based exclusively on software, anymore than building a home is based on the quality of the shovel you use,” said Garvey. “Developers are often more interested in building an impressive data warehouse instead of worry about having an effective processing tool to use in managing the business.”

According to information from Gartner Group, “incomplete information is just as dangerous as no information at all . . . in the absence of BI, a fact gap exists.”

“Information really is the most value commodity we have. It’s a very liquid form of capital and you can leverage it in so many different ways,” said Garvey. “The trouble is there’s often too much of it and an organization may not realize what they have or how they can use it effectively.”

B2BPower continues in conjunction with CRMPower and eCustomerWorld 2001 at the Metro Toronto Convention Centre until Thursday.

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Jim Love, Chief Content Officer, IT World Canada

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