Rarely have businesses had to make so many important decisions in the face of uncertainty and rapidly changing circumstances.
A critical part of effective decision making at this speed is the availability of quality data on the issues in question. For businesses of all sizes and complexity, Business Intelligence (BI) should be part of the answer.
Sisense research shows that 50% of businesses are using their data, dashboards and analytics more since the crisis emerged. BARC research reveals that 84% of BI users do see a positive improvement in business decisions. Of course, it’s not as simple as all that (or the blog would end here!).
A Culture of Insight
With decision making in mind, Market Research Society (MRS) and Savanta recently released a report highlighting the importance of Intelligence Capital, which would help create a “Culture of Insight” amongst UK businesses. Two years after their initial work in this area, the authors suggest that we are still a long way from achieving this way of thinking. In fact, they find that seniority continues to trump evidence in decision making for many organisations.
The MRS findings reflect the experience of Daniel Kahneman, the founding father of Behavioural Economics. With his Nobel Prize secured, Kahneman followed the well-trodden path from academia to consultancy. Imagine his surprise and disappointment when he discovered what was happening inside leading organisations. Having expected to be awed, he was instead left aghast:
“You look at large organisations that are supposed to be optimal, rational. And the amount of folly in the way these places are run, the stupid procedures that they have, the really, really poor thinking you see all around you, is actually fairly troubling”Daniel Kahneman
Business Intelligence alone cannot begin to address all of the issues, questions and challenges surrounding effective decision making. However, when combined with knowledge management, it can play a vital role in building a Culture of Insight and helping businesses find data-informed decision making.
For those organisations yet to develop or implement a BI solution, there will be concerns around investment and the potential for business disruption. These are important questions — BARC research shows that a lack of project resources is the biggest BI implementation challenge organisations experience. It is vital therefore for businesses to find both the right BI solution and the right implementation partner to ensure success.
A reduced capacity for investment will be one of the key challenges the economy faces in the coming months and years. The Sisense research reveals that while 55% of BI users plan to maintain their BI and analytics investment, only 10% are planning to increase it.
So we need to think about the return on BI and analytics investments but also about how we implement a solution.
ROI calculations can be challenging, not least as BI is considered an enabling technology (a means to improved visibility and better decision making) rather than a value driver in itself. It is worth noting, however, that the return on analytics investments scales with more sophisticated uses of data.
Realising the value of BI
In terms of implementation, the days of a one-off, big-bang installation are long gone. Today, we expect an agile and collaborative approach across stakeholders who deliver incremental business benefits while bringing business users with us on the journey.
In fact, one of the more surprising findings from the BARC research is that a lack of business user interest is an issue for many BI teams — one that is central to the realisation of BI value.
This seems extraordinary given the complexities of modern business, including marketing technology, the range of metrics and KPIs we are all working with, and the broad appreciation of the issues with traditional decision-making models. After all, it’s already been 10 years since Bain & Co demonstrated the strength of the relationship between decision effectiveness and business performance.
Most businesses have significant cultural challenges to address. These should be acknowledged up-front. The BI programme should be set up for success as a strategic, enterprise-wide initiative, benefiting from executive sponsorship, and with its priorities grounded in the corporate strategy. Ideally, the BI programme should be complemented with a review of decision-making practices within the organisation. If we can accept that decision making is a critical business process then, as with any other process, we can work to improve, optimise and even automate.
Underpinning our approach to these cultural issues should be a commitment to data quality, under the rubrik of a data governance programme, and a focus on user experience. Especially as we drive BI deeper into the business, any weaknesses in these 2 core areas will rapidly escalate to disillusionment with the system, diminishing any prospect of ROI.
A holistic approach to implementation
In summary, we can argue that BI is necessary (essential, even) but not in itself a sufficient driver for improved business decision making. The latter requires a holistic approach to implementation, including decision-making practices and the development of a Culture of Insight.
There should be little doubt that people and machines can drive more effective, timely, responsible and informed decisions than either can do alone.
Now is the time to get started on that journey.