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8/14/2006
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The Seven Pillars of BI Success

Business intelligence tools may be getting better, but technology is only part of the story. To succeed you must develop measures, set a strategy, manage effectively, ensure executive support, choose the right tools, standardize on a platform and align the BI strategy with business. Here's how to make it happen.

Updated, August 28, 2006

As business users, analysts and IT professionals pursue business intelligence nirvana, software tools get the most attention and excitement. After all, the BI tool is the face of BI, masking the data, technical infrastructure and information processes. Whether via a dashboard or other interface, the tool is the domain of IT's most important constituents: the users.

Yet for every successful BI project, you'll find it was achieved with different BI tools. So, if it's not the tool choice, what really makes--or breaks--BI? What do successful projects have in common? With business users' high hopes putting BI pros under intense pressure to create competitive advantages, you can't rely on technology alone to get you to the promised land. It takes more.

In this article, we'll discuss the seven "pillars," or factors that support the best BI implementations. To determine these factors, we talked with three award-winning organizations. In addition, Intelligent Enterprise conducted a survey with ASK (Analytic Solutions Know-How). Finally, we'll also look at what readers feel can help or hinder BI projects.

1. Measure Success

Companies struggle to measure BI success. Some measures, such as return on investment (ROI) show explicit, tangible benefits. Others point to "softer" advantages. These include whether users perceive the BI project as mission critical, how fully key stakeholders support the projects and the percentage of active users.

Many organizations go with ROI. However, ROI gives you a precise number based on imprecise inputs. If revenue increases by 10 percent, how much of that is directly attributable to the BI project? Market conditions, employee training and other factors such as a competitor going out of business could be just as responsible. Cost savings offer a more precise input--and have given companies much to brag about when it comes to BI. Here are some examples:

•Allstate Insurance, since it began a data and BI tool consolidation project in 2002, has saved tens of millions of dollars by eliminating redundant reporting systems.

•ENECO Energie, the third largest provider of electric and gas utilities in the Netherlands, saved $3 million in its customer contact center and billing department, raised conversion rates in campaigns and gained market share.

• 1-800 Contacts, a provider of direct mail contact lenses, estimates that its BI solution provides $50,000 per month in improved revenue, productivity and--most important--customer service.

Although it is generally difficult to calculate and apportion BI success using financial measures, organizations can tally the number of licensed and active users. Unfortunately, few companies do this--and BI vendors historically have not provided adequate tools to do so. However, high numbers of users tend to indicate success. In our reader poll, we found out that on average, only 24 percent of companies' total employees have BI licenses. But companies that described their projects as "very successful" report a much higher ratio (42 percent) of licensed users.

Differences in survey results highlight something interesting about expectations for how far BI can grow. Not surprisingly, nearly all the vendors will tell you that 100 percent of employees should have a BI license. However, The Data Warehouse Institute (TDWI), a leading industry association, reported in a recent survey that 41 percent of those whom respondents identified as "potential" BI users already have a license. This figure is nearly double what our ASK- Intelligent Enterprise survey says; we classified "all employees" as potential BI users.

Recent innovations discussed in Neil Raden's "BI Megatrends," BI vendors' partnerships with Google and other search technology vendors--will extend the reach of BI. Ten years ago, few would have said that every worker (let alone every teenager) needed a cell phone. Similarly, differences in perception among industry analysts, market prognosticators and vendors tell us that a range of opinions exist about BI's potential, and that many still do not view BI as part of the mainstream office tool portfolio.

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