Defining BI Requirements - Who Will Use It

The first task in a BI progam [and the first goal of the BI roadmap] is to identify what the business wants to achieve, and how business intelligence can support that need.

Look for opportunities in your organisation where business intelligence can:

1. improve the quality of day-to-day decision making
2. add value to operational efficiency
3. support tighter collaboration

BI Value Assessment

1. Where can business intelligence be used effectively?
2. Who will use the application?
3. What information do they need?
4. How will the outcomes be measured?

Assessing Who Will Use the BI Application

When assessing who will use the application, one must consider both the scope of the project as well as individuals within the scope. It is a fundamental mistake in new BI programs to attempt to rollout BI across several functional areas as a first initiative. Rather, once one functional area recognises the value of BI, the program can be duplicated in other functional areas, and then expanded to cross-functional and business-unit applications.

Assessing Who By Scope

Cross Functional and business unit applications are generally more strategic and focus on high-level planning rather than supporting operational activity.

A typical functional process - Customer Profitability Analysis: revenues and costs are collected and then allocated to specific customers and customer groupings. The BI outcomes help decide customer type/ customer group, pricing or discount structures, customer product differentiation, buying habits, customer retention, and channel profitabilty.

A typcial cross functional process - Product Contribution Analysis: variable costs are collected from all functional areas of the business, not just variable manufacturing costs, and then assigned or allocated to specific products or product lines. The BI outcomes are better understanding of alternative pricing strategies, deletion of unprofitable products or product lines, and new bundling of product offerings.

BI applications used by multiple departments are more difficult to define and obtain agreement on. They typically involve data from multiple functional OLTP systems, and are more difficult to build.

The BI benefits are qualitative [measured by better decisions] rather than quantitative [operational performance improvements], making them more difficult to define, measure and evaluate.

Cross-functional and business-unit applications are more strategic, and do have greater impact on competitive advantage, but are considered a more advanced form of business intelligence.

For these reasons, in spite of corporate strategies and goals being implemented from the top down, business intelligence is typically implemented as a bottom-up process, with performance metrics [KPIs] reflecting the unique function of each business unit.

Assessing Who By Role

The 'who' is revealed through assessment of the information and analysis needs of the different roles and levels in the organization—operators, supervisors, managers, senior managers, and analysts.

As a guide, the lower the job classification, the more need for detailed operational data specific to a functional area. Higher job classifications generally only need summarized data that supports the analysis of trends and patterns within and across functional areas.

For example:

A Telesales channel operator - works at the customer transaction-level with information including customer name and address, product number and description, promotion offer etc. This core information is routinely provided by the company's OLTP system.

The team leader - helps operators with problems and manages team performance - will need hourly summary of transaction data and call management statistics, with access to transaction detail to help resolve an issue.

The Telesales Channel Manager - oversees the operation - uses multidimensional and hierarchical information to monitor trends in operational performance, with only an occasionally need for customer level detail.

BI systems also make possible easy access to operational information by analysts, senior managers, and executives outside the functional department. This is in sharp contrast to traditional reporting hierarchies that level by level roll information up from the lowest level to supervisor, to manager, to departmental head, to business unit head, divisional head, and finally C-level executives.

With BI, reliance on this slow, scheduled reporting is surpasses by the ability for any authorised user to check trends and drill down to identify the source performance data. Whilst the technology barrier is removed, the political barriers may take some time to overcome. In todays fast paced business environment personal egos are the deadly to corporate performance enhancement. Many senior executives still resist empowering managers with valuable information. Yet by doing so, they better enable their managers to improve operational performance, thereby releasing higher level managers to deal with broader and more timely performance. So don't overlook the political impact or current culture in each of the functional areas you are assessing.

Next: Assessing What Information Is Needed

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