When business intelligence software projects fail, IT is often blamed. But the failure can usually be traced to...
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lack of leadership, not technology.
In fact, a new survey finds that a lack of ownership by the right executive often leads to a disconnect between the vision of senior management and the way a project gets done.
"The core issue with business intelligence [not succeeding] isn't a technical issue," said Betsy Burton, Gartner vice president and distinguished analyst. Rather, she said, it's the failure on the part of business leaders to make sure the organisation gets the information it needs and leverages it in a way that makes sense with the business objectives.
"It's interesting," Burton said. "The symptom that people see is a lack of vision, a lack of strategy, a lack of linking supportive business intelligence back to systems. It's very easy for managers to say, 'Hey the data is wrong,' rather than take an introspective look."
"They should ask 'Have I given the organisation a clear sense of what we're trying to get out of business intelligence? Am I really arming my people within my organisation with a sense of the importance and the metrics so that they can deliver valuable information?' It's easier to point at the numbers and say, 'The numbers are wrong. Fix them.'"
Burton, who surveyed 350 organisations about their business intelligence projects, found that only 10% reported their projects had a C-level executive sponsor with a direct link to the business. Twenty-five percent said their projects were sponsored by an IT manager, and 25% had no executive sponsor at all.
Given that business intelligence projects usually tie in with major business initiatives, this lack of ownership and support can be crippling at the least, and fatal at the worst. After all, business intelligence projects are by definition relied upon to make critical business decisions - and if the project isn't implemented correctly and with the support of the senior executive, success will be difficult.
Fernando Ricardo knows this all too well. As head of sales and service desktop with Westpac, he has stewarded the company's five-year customer relationship management project, a major effort that now reaches 9000 Westpac employees across the country.
Using a SAS Institute business intelligence analytics engine to pore through data contained within a Siebel Systems CRM environment, those employees now have unprecedented access to information about customer behaviour - and employees at every level rely on that information for all kinds of everyday decisions.
The inherent understanding of the BI project's importance made executive buy-in a natural, says Ricardo: "when companies like SAS develop their BI tools that integrate into the customer management system - making visible to my superiors and peers how the business is travelling - it's a major cultural shift," he says. "When the metrics are related to business performance, you don't need to provide a lot of incentive [for buy-in]; people are keen to see how they're doing and what they need to improve. But you can't implement a measurement system enterprise wide unless you have support at the top. The executives wanted the business transformed, so they drove a lot of these changes."
Throughout the course of the project, specific support from Ricardo's senior operations and business executives ensured it was able to get access to enough staff and resources to push through to completion - but not all projects enjoy such senior sponsorship.
In Burton's sample, for example, 40% of those polled said their business intelligence projects were owned by lower-level business executives. That isn't ideal, Burton said, because that group tends to have tactical rather than strategic roles -- which is what ends up sinking a project.
Even more alarming is that 65% of those polled said they viewed business intelligence technology as too complex and unusable, and 69% said they lacked the skills necessary to use it anyway.
Few can argue that businesses are sold on the virtues of business intelligence. It's one of the fastest-growing sectors of the IT software market, according to IDC. Further, the business analytics market accounted for $18.25 million in global revenue in 2006, and is forecast to grow about 10% a year during the next five years.
Experts contend that for many organisations a business intelligence initiative is a business project that's been dumped on the laps of IT and lower-level executives who haven't been keyed into the vision, and, worse, aren't expected to look at the data analytically. Ultimately, the project fails.
But some companies can point to business intelligence as being pivotal to its success. For instance, Coldwater Creek, a clothing cataloger and retailer catering to professional women, is one of the fastest-growing US retailers. The company, which was founded in 1984 and has 239 stores, is expected to see sales of $1.24 billion this year. In 2006, retail store sales increased 46.1%, surpassing a $1 billion sales mark milestone for the company.
Part of the company's success is attributed to its business intelligence initiatives. According to Michael Carper, the clothier's divisional vice president of technology operations, CEO and founder Dennis Pence has a vested interest in Coldwater Creek's business intelligence implementations.
"I think he had a pretty good idea of where he wanted to start and where he wanted to see it go in the early stages," Carper said.
Coldwater Creek uses business intelligence to determine where to build retail stores -- including the 65 new stores it expects to open this year, Carper added. It also analyses what products are selling well and in which regions of the country. His company has a lot of data to look at, given that it sends out 140 million catalogues a year. Coldwater Creek has collected a lot of data about where its customers live and what they like to buy.
"We wanted [business intelligence] to exist outside of IT so it could move quickly," he said. "It was inspired by our founder to be quick and agile for making business decisions. We're successful primarily through being able to understand the business through business intelligence."
Making sense of all that information isn't the job of IT. It's up to the business to figure out how it wants to use that information. IT just delivers the tools to let business users utilise the data.
"[Business intelligence] definitely can't be an IT project," Carper said. "I don't think it has much value without the business. It has [been] facilitated by business intelligence and technology, but it's largely a business analytics function. The business should feel like they own this to a certain extent."