In order to keep your business competitive, drive growth, ensure continuous improvement and enhance profits, a Business Intelligence (BI) strategy is essential. But a BI strategy is not just about technology or choosing the right platform. Like any part of your business, BI requires strategy, planning, buy-in, execution and continuous review. In this blog post, we will look at the key steps to implementing a business intelligence strategy.
The Need For Business Intelligence
Developing business Intelligence has long been seen as key to business growth. The ability to collect the right information, analyze it and use it for proper decision-making is part of enhancing the interests of any business.
In 1989, Howard Dresner described Business Intelligence (BI) as a term that describes “concepts and methods to improve business decision-making by using fact-based support systems.”
If you’re not using BI to your advantage, you risk the following:
Missing strategic growth opportunities
Failing to take advantage of cost savings
Falling down on customer satisfaction
Losing your competitive edge
Therefore, a BI strategy is not to be taken lightly or in haste. It’s important to have the entire organization involved in supporting, implementing and using it.
Let’s look at how to do it.
1. Get Executive/Stakeholder Buy-In & Build a BI Team
While your entire organization can benefit from a BI strategy, it doesn’t mean they will all support it off the bat. From the beginning, you need a cross-functional team to lead the initiative.
Start with an Executive sponsor, someone who understands the organization’s business strategy and knows the company mission. This does not have to be the executive in charge of IT. The Chief Financial Officer may be a good fit, as they understand the bottom line, but other executives can also be considered. Whichever executive is chosen, make sure they are a champion of BI.
Executive-level sponsorship is vital, as it shows the rest of the organization the importance of the strategy. The sponsor can also help remove any roadblocks and get support for the necessary funding and human resource needs of the strategy.
Other stakeholders and champions from across the organization must also be identified, as they will help their areas to understand and use the information for benefit. As well, the entire business must dedicate resources to ensure success, and that includes staffing and other resource and IT costs.
However, the BI strategy doesn’t belong to the IT department. In fact, those who manage the business need to own the program, so they can access information when they need it. Those users will know what information matters to them, and what they need to improve their work. They will need to be able to get that information without waiting for IT to provide reports to them. That doesn’t mean IT shouldn’t be involved – they must be a key part of the team. But they don’t make up the whole team.
When determining your BI team and looking for champions, include all levels of the business, including strategic, tactical and operational levels. Each of these stakeholders will be able to identify Key Performance Indicators that support your business. They will also require different information to improve their work. Knowing who will be using the data and how they will be using it will inform your strategy and execution, so be sure to have all the areas of the business at the table.
2. Examine & Document Current State
Now that you have your BI team in place, the first step is to look at current state. This includes the data currently collected, the technology used to collect it, and the organizational structures and processes used. Look at what’s working and what data is valuable, so you can continue to collect and use it. You don’t have to start from scratch.
Then examine what isn’t working. What questions do you have that data doesn’t answer? What processes aren’t working?
3. Determine Key Performance Indicators
Next step for the BI team is to work together to determine the Key Performance Indicators (KPIs) for the business. These must be measurable numbers that indicate whether the business is meeting its goals and where it needs to make improvements. KPIs and their effective measurement and reporting are the heart and soul of a good BI strategy.
An example of a KPI is sales revenue; for an online business it could be landing page conversion rates.
KPIs must be aligned to the goals of the business, but start with a small number rather than having too many. Choose the most important KPIs as you can always add more later. Also, be sure you are tracking KPIs from various areas of the business. A BI strategy is not just about the IT department. Your BI team should be a cross-section of the business, and so should the KPIs.
4. Develop A Common Language
As part of the development of KPIs, it’s also important to develop a common language. This is almost like a dictionary that goes with the KPIs. There has to be consensus of how the data and any calculations are defined. For instance, “gross profit” and “gross margin” might be considered the same thing by some parts of the organization, while other areas might calculate them differently. It’s important to get agreement on the definitions and the data that will be collected and analyzed.
5. Choose A Solution
If your business doesn’t already have the capacity to deliver on your Business Intelligence strategy, you will need to determine a BI software system or partner. The work your team has done to this point will help in the decision-making process.
There are some considerations your organization will have to determine, such as whether you want to use a cloud solution or an on-premise solution. You can also look for flexible and scalable solutions that can grow with your business.
6. Start With a Trial
The entire BI strategy doesn’t have to be implemented at once. Consider doing a trial with only a few KPIs. Use them to build some informational dashboards and reports, and gather feedback from the organization on the information and the usefulness of the data.
Reporting and gathering feedback is a good process to implement after the trial as well. Determine regular intervals to review the information, looking at the data and reports, and ensuring the BI strategy is adapting and improving along with your business.
7. Build Understanding Across The Organization
Change in the organization won’t be easy. There will always be nay-sayers who don’t believe in the BI strategy and its execution. Keep communication lines open as you conduct and roll out the trial. Help the organization understand how this new approach will serve them in their roles and help the business as a whole.
If staff are involved as early as possible, and provided with information and training throughout the process, it will help them embrace the data and decision-making and see how it serves them, the business and customers.
8. Review Continuously
It’s always important to do a continuous review of your strategy, even after you’re collecting, reporting and reviewing the relevant data.
Start with a post-project lessons learned session, and document what worked and what didn’t as you went through the process. This is good information for future projects in your organization, and can also inform any adjustments that need to be made to the strategy.
As the reports are consumed and used, gather feedback from users and make changes if needed. Consider an annual review as well. Perhaps the KPIs that served the business two years ago are no longer relevant and the team wants to look at new KPIs. If the overall business strategy changes, the KPIs will likely change as well.
The concept of developing and implementing a BI strategy can seem daunting. It does require planning, resources, commitment, execution and review. By using this roadmap, however, to develop and implement a strategy, you can take a phased approach, break the work into chunks, and have success in the long run.
After all, the cost to your business of not having an effective BI strategy in place is much greater than the work it takes to implement one.
Danielle Canstello is part of the content marketing team at Pyramid Analytics. They provide enterprise level analytics and education BI. In her spare time, she writes around the web to spread her knowledge of the marketing, business intelligence and analytics industries.