Course Name: Business Intelligence
Year: 2009
Leading and Managing Business Intelligence
21st Meeting
Source of this Material
(1).
Williams, Steve & Williams, Nancy (2007). The Profit
Impact of Business Intelligence. Chapter 5
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A Leadership Perspective on Business IntelligenceDriven Profit Improvement
From a leadership perspective, BI-driven profit improvement is largely about
vision and cultural change, whether at the enterprise level, the business unit
level or the functional level.
• Changing The Culture of Information Usage
The culture changes that leaders must drive to realize the value of investments in BI
include the following:
 Redefining the role that information plays in the organization
 Changing the way that information requirements are defined
 Changing behaviors in using information
Companies that meet the leadership challenges presented by BI-driven profit
improvement initiatives will reap the business and economic benefits that BI can
provide. The process of BI-driven cultural changes can be viewed as a journey along
a predictable development path that we think of as a BI maturity model with three
stages, as shown in Figure 21-1.
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A Leadership Perspective on Business IntelligenceDriven Profit Improvement (cont…)
Figure 21-1
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A Leadership Perspective on Business IntelligenceDriven Profit Improvement (cont…)
•
The Three Stages of Business Intelligence-Driven Cultural Change
As Figure 21-1 suggests, the process of changing an organization’s culture to benefit
from BI usually follows three distinct stages, To manage the change process
effectively, you need to understand each stage of the process, as well as what you
can and can’t accomplish during the stages.
 Stage 1
Information focus: “What” do the users want (lists of data elements)
ROI potential: Limited
This early stage of BI maturity looks a lot like information usage before BI. There has
been no redefinition of the role of information. Information requirements are gathered
much like report requirements and typically consist of lists of data elements provided by
business users to the BI team.
 Stage 2
Information focus: “Who” (some), “what”, “when” (some), “where” (some),
“why”
ROI potential: High
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A Leadership Perspective on Business IntelligenceDriven Profit Improvement (cont…)
The middle stage of BI maturity is a great improvement over the early stage.
During this stage, the company recognizes that to reap the benefits of its
investment, managers must rethink the role of information in the
organization and go beyond the status quo.
 Stage 3
Information focus: “Who”, “what”, “when”, “where”, “why”, “how”
ROI potential: Optimal
The final stage of BI maturity improves further upon stage 2 by looking at
overall organizational processes that are in place for using information. It
does not stop at delivering the right information to the right people at the
right place and time.
•
Steps for Advancing Business Intelligence Maturity
To accomplish the required changes depicted in Figure 21-1, leaders can apply a
change model such as the one advocated by John Kotter, a highly regarded expert in
the field of change management (Kotter, 1995). Adapted for BI, the cultural change
approach consists of eight steps:
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A Leadership Perspective on Business IntelligenceDriven Profit Improvement (cont…)
 Step 1: Establish a Sense of Urgency to Change the Company Culture to
Leverage Business Intelligence
 Step 2: Create a Coalition to Drive Business Intelligence Use into the
Company Culture
 Step 3: Develop a Clear Vision of How Business Intelligence Will Be Used
for Profit Improvement
 Step 4: Share the Vision of How Business Intelligence Will be Used for Profit
Improvement
 Step 5: Empower People to Clear Obstacles to Business Intelligence Use
 Step 6: Secure Short-Term Business Intelligence Wins
 Step 7: Consolidate Business Intelligence Wins and Keep Moving
 Step 8: Institutionalize the Change in How Business Intelligence is Used
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A General Management Perspective on Business
Intelligence Driven Profit Improvement
The general management focus for BI-driven profit improvement must balance
considerations of business strategy, BI strategy, business infrastructure and
processes, and BI infrastructure and processes. This concept is shown in
Figure 21-2, which is adapted from “strategic alignment: A model for
organizational transformation via information technology” (Henderson and
Venkatraman, 2005). The model, adapted for BI, shows that fully leveraging BI
requires integration and/or alignment at four key points, which are numbered
accordingly in Figure 21-2. These integration and/or alignment points are
between.
• Business strategy/BI strategy
• Business strategy/business infrastructure and processes
• Business infrastructure and processes/BI infrastructure and processes
• BI strategy/BI infrastructure and processes
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A General Management Perspective on Business
Intelligence Driven Profit Improvement (cont…)
Figure 21-2
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A General Management Perspective on Business
Intelligence Driven Profit Improvement (cont…)
•
The Program Plan for BI-Driven Profit Improvement
At the applied level, the BI program plan must guide and coordinate systemic
development of BI competencies that advance your company along the BI maturity
path. Accordingly, the company has embarked on a BI program aimed at providing all
levels of operations management with more timely and relevant business information,
as well as with appropriate analytical tools so that managers can consistently improve
productivity and service. This particular program plan has seven elements. This
particular program plan has seven elements.
 Element One: Business Strategy for Leveraging BI
Deploy business information and business analysis tools that provide frontline
managers with more detailed, timely, and specific information about productivity.
 Element Two: Program for Developing BI Core Competencies
To achieve the business strategy for leveraging BI, the company is evolving toward a
COE approach, which is a systematic way of developing and exploiting BI core
competencies to improve profits and business performance. These core competencies
are shown in Figure 21-3.
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A General Management Perspective on Business
Intelligence Driven Profit Improvement (cont…)
Figure 21-3
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A General Management Perspective on Business
Intelligence Driven Profit Improvement (cont…)
 Element Three: Risk Management
BI readiness assessment is an excellent tool for indentifying risks in advance. The
specific risks to be managed differ from company to company. The BI program plan is
the place to identify and describe the risk management techniques that will use to
mitigate them.
 Element Four: Business Process Re-engineering
To capture the business value of its investment in BI, company must leverage BI-driven
reengineering skills, that is, the ability to use introduce and standardize the use of BI
within business processes that affect profits and performance.
 Element Five: Program and Project Management
To succeed, a BI-driven profit improvement program must have effective program
management and project management.
 Element Six: Information Technology Infrastructure
A BI-driven profit improvement program may require changes to the existing IT
infrastructure, depending on the company and its starting position with respect to BI and
DW.
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A General Management Perspective on Business
Intelligence Driven Profit Improvement (cont…)
 Element Seven: Information Technology Operations
It is critical that IT operations support both the production operations of the data
warehouse and the BI applications it supports.
•
BI-Driven Profit Improvement is a General Management Responsibility
If consider the business and technical challenges outlined above in our discussion of
BI-driven profit improvement programs, it’s clear that, many of the challenges are
cross-functional between the business and IT. IT does not have the power to force
the business to engage or to change business processes to leverage BI.
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BI-Driven Profit Improvement Is Crossing
The Chasm
The order of adoption follows a predictable pattern: technology enthusiasts are
first, followed by visionaries, pragmatists, conservatives, and skeptics. If the y
succeed, the highest incremental profit goes to the early adopters-enthusiasts
and visionaries. The majority of the market consists of pragmatists and
conservatives, who take less risk but consequently reap lower rewards.
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“Strategic Planning, Benchmarking, Pay-for-Performance, Outsourcing, Customer Segmentation,
Reengineering, Balanced Scorecard, and Total Quality Management are among the many
management tools that companies have experimented with in recent years. Do companies using
these tools do better than the ones who don’t? The is no equivalent of the Consumer Reports for
management to use in evaluating the tools available to them.”
-Daryl Rigby, “Management Tools and Techniques: A Survey.” California Management Review,
Winter 2001.
End of Slide
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