Every business needs a brain. This brain — or business intelligence — needs to gather data such as customer, product and organizational information, then process, categorize and act upon it to make successful business decisions. The data also must be stored and used properly to help businesses obtain and maintain a competitive advantage in the market.
But many businesses are unable to move from gathering data to translating it into information and knowledge. The amount of data on corporate hard drives doubles every six months, and much of it is not easily accessible or tied together, resulting in a confused organizational brain.
“It takes hard work to build and maintain business intelligence,” says Charles E. Downing, Ph.D., Walmart Professor in Enterprise Technology Innovation in the Department of Operations Management & Information Systems at Northern Illinois University. “A full cooperation of people, processes and technology is necessary for success.”
Smart Business spoke with Downing about the risks and benefits of business intelligence, and how to incorporate the business intelligence process into your company strategy.
What are the risks and benefits of business intelligence?
The benefit is getting faster and better answers to business questions, which saves time and money. The biggest risk is undertaking the process halfway. Many executives believe that they can simply install a piece of software or push a button to have business intelligence. But getting data in a format that can be used for business intelligence is hard and challenging work. Large data warehouses can also be very expensive and take years to build. Every dollar spent on technology may lead to spending $5 to $7 more on consulting and other services. A halfway commitment and effort could lead to wasted money and disappointment.
What steps are involved in the business intelligence process?
The first is building the brain, which includes planning, analysis and design of what the business intelligence needs are. Next is obtaining knowledge, which involves deciding what data is being captured and stored, when this happens in the business process and by whom, and how it is organized. The last is using that knowledge to make strategic decisions that enhance your competitive advantage. The long-term objective is to build a data warehouse that is clean and current, and that can be used for analysis leading to business intelligence. The warehouse needs to stay current because it won’t be useful if it contains stale data.
