Gartner Business Intelligence Summit: Donald Feinberg on the CIO's View of BI

IT budgets will be flat -- at best – in 2009, but CIOs continue to view business intelligence as their top investment priority. This is one of the key findings of a January survey of 1,500 CIOs that analyst Donald Feinberg will share at this week's Gartner BI Summit in Washington D.C. In this Q&A interview, Gartner's veteran database guru shares highlights from his keynote presentation along with recommendations for responding to the economic crisis.

The economy is obviously on the top of everyone's mind, so what's the advice you'll share this week for coping with current conditions?

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Well, you'll obviously have to focus on top-priority projects and you need to deliver value. Forget cost cutting. That may give you a side effect -- maybe -- but chances are it's not going to really produce a big benefit. The real value is in delivering bottom-line results, so pick short-term, small projects that are clearly doable.

What are some of the "top priorities" and "doable projects" that you're seeing out there?

Simple dashboards for senior managers are a good example. If you have a data warehouse, develop a set of analytics and dashboards using corporate performance management (CPM) software. Then you can walk into the CEO's office with a flat-screen TV with a real-time management dashboard that they can put up on their wall. That's a priority because it helps senior executives be more proactive about managing the business. Plus, when executives can physically see the value of IT, they are going to give you more money for the next project. It's all about getting funded for more projects. So "high priority" means that it has an impact for the company. "Value" means that is shows the value of IT to senior management. And "short term" means you're sure you can do it relatively quickly.

Some say BI pros should focus on anything having to do with improving cash flow or visibility into cash flow. Would you agree?

Yes, I would, and it just so happens that most CPM software has to do with cash flow and how to improve internal processes. If you look at the top priorities that CIOs identified in our survey – improving business processes, reducing enterprise cost, managing change initiatives, expanding current customer relationships – most of them are fairly short-term, high-bang-for-the-buck initiatives that you can do with the aid of BI, analytics and CPM. These are the kinds of projects you want to do next.

Why do you dismiss cost cutting?

I don't dismiss it, but to start with, I don't like the term because it's negative. I'd call it cost optimization because cutting implies that you lose. I want to find a way to reduce the costs in my IT department for day-to-day operations so I can increase the money that I'm spending on new processes, new applications and new support for the businesses.

Your 'CIO's View' presentation has a recommendation to "ensure there's a focus on valuable information." What do you mean by that?

You have to have the right information and it has to be accurate. That means you want to use sources of information for these projects that you can trust. Otherwise you're going to have to embark on a data quality program, which costs money and takes time. If you can find something short-term where you know the data quality is good, then stick with that.

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Your tenure in BI dates back to the last recession. Are you seeing any differences this time around?

The big difference between today and the last economic downturn, which was 2002 and 2003, is that BI wasn't as strong within organizations as it is today. CPM was pretty much nonexistent back then. Now we have out-of-the-box software that actually provides valid dashboards for CEOs, CFOs, senior managers and sales executives. They can see the business and in many cases they can see changes on a minute-to-minute basis. I've visited companies where they have dashboards running live on the CEO's office wall. Companies can do things with BI and analytics like precise inventory control. Most retailers will tell you that they're using things like analytics to be able to precisely order for every store so that they keep minimum inventory but they're not running out of things when people need it. We're optimizing our businesses like never before because we have a statistical history in the data warehouse that we can use with sophisticated analytics to really understand buying patterns. If a retail store can turn its inventory one more time in 2009, it could be the difference between red and black. That goes right to the bottom line. If a manufacturer can get better forecasts based on historical orders and let their suppliers know about their building cycles, they can do a much better job of just-in-time inventory, which again goes right to the bottom line for the manufacturer.

So I guess it's not surprising that CIOs named BI as their number-one priority for the fourth year in a row, but the survey also laments that 74 percent of BI initiatives continue to be lead by IT. Why is that a problem?

The biggest culprit with failing BI initiatives is that it's still being driven by IT and not the business units. If you want BI to be successful, it has to be a combined effort among IT and all of the business units -- not just some of them. And I don't mean just talk to the business units; I mean work with the business units. BI projects should be managed by the businesses, not by IT. BI competency centers (BICCs) are the way you do that. The BICC is made up of people with analytic skills, people with IT skills and people with business skills from every business unit. The BICC isn't there just as an advisory board; these people should be managing the projects. That's what working together and collaborating means.

Gartner has been preaching about BICCs for years, yet they're not all that commonplace. Is a BICC really essential to succeed?

You can be successful without a BICC, but you absolutely will not fail if you have an effective BICC. The higher the level of the executive sponsor, the more effective and successful the BICC will be. If the BICC is sponsored by the CIO, nothing is going to happen because it's IT-driven. But if the CEO says, "this is what we're going to do," everybody falls in line. The other point I'd make is that executive corporate management should be involved, but the BICC, as a group, should be engaged in setting and implementing the strategy for BI.

Despite predictions of flat IT budgets, demand for data warehousing products still seems to be high. Is that what you're seeing?

Demand on the data warehousing side is definitely strong. Even in this economy, we're not seeing a reduction in demand at all.

Is it just a matter of mushrooming data volumes forcing companies to invest?

It's about growing data volumes but these companies are also seeing the value of the warehouse through some of the CPM software and analytics they're using. These people are saying, "we're not slowing down our data warehousing strategy; we're going to increase our focus on it and move to an enterprise data warehouse as quickly as we can. We're going to get the information that we need so we can use it to survive in this economy.