The Five Fatal Flaws of BI

Over the last eighteen years, I’ve been associated with a large number of BI projects and have been able to see first-hand what behaviors correlate most closely with success and failure.

In particular, there are five main erroneous assumptions about implementing BI that can lead to failure. This list is condensed and a little simplistic: every single one of these bullets could be a blog posting on its own — and I hope to get around to doing just that one day…

1. BI isn’t about technology, it’s about people.

80% of the time and effort that goes into implementing BI is typically devoted to the technology and the data. But BI success is determined primarily by people, process, organization, culture, expectation setting, and leadership.

  • User adoption. Giving somebody a pencil won’t make them Picasso. Organizations typically under-invest in training and culture changes necessary to make the best use of BI. It’s easy to over-deliver to a small number of vocal, technical users that can clearly articulate their needs, and miss the greater value of a broad deployment to less technical users.
  • The IT/Business relationship. BI is meeting point between the tens of millions of dollars invested in IT and the business strategy it is supposed to support. There has to be an equal partnership between IT and the business. A “tough-love” approach that mixes firmness with diplomacy and establishes clear areas of control is the most likely to be successful.
  • Marketing the solution. Successful BI requires not just “promotion,” but an ongoing effort to match the “product” to the real needs of the users. Internal prizes for the best business use of BI can provide a win/win/win situation for IT, users, and executives.
  • Self-awareness. Many BI leaders have a background in technology. If they are uncomfortable with the people-intensive roles needed to make BI successful, these should be delegated to those who delight in them.

2. BI is a process, not a one-off project

  • There is no finish line. This is true of all IT projects to some extent, but especially for BI, because by definition as the organization uses it, you’ll discover new questions and new BI needs. An organization that doesn’t have constantly changing BI needs is an organization that isn’t using BI effectively.
  • BI is part of every solution, not an add-on. BI is dominated by architecture thinking: I’ll build the foundation (operational application) first, and then I’ll think about how to get the data out. But in real-life, the BI needs will determine the operational application deployments, and should be considered at the same time.
  • BI Methodology. Organizations should have a formal methodology with interlocking business and IT development cycles. What goes wrong: (a) business users aren’t on the hook for BI success, (b) the two cycles disengage, with IT incrementally adding to infrastructure that nobody uses while the business users turn to home-made solutions.
  • BI competency centers. A team dedicated to ensuring that the organization is prioritizing its investments in BI correctly and making the best use of the “information assets.” The ideal team is like Starship Enterprise: Scotty handling the engineering, Spock for data analysis, Bones for the relationship with the business users and Kirk for strong leadership. What typically goes wrong: (a) incentives: it’s clear that the business would benefit from the BICC, but no manager is incented to give up his or her resources to make it successful, (b) ivory tower syndrome: the group concentrates on technology instead of the users’ needs, and gets disconnected from business reality.

3. BI isn’t about cost, it’s about value

  • BI shows very high ROI — retrospectively. But because you don’t know what you don’t know, it can be hard to justify the ROI in advance. And because every computer layer that has ever been sold has promised the same thing: better access to information for the business. Suggested approaches: (a) use history to show what BI has done in the past, (b) link the need to minimizing risks, and give real-life examples, (c) link it to the speed of business, and give real-life examples, (d) explain the need for BI in relationship to the overall strategic goals of the organization, (e) play on the universal executive fear of having somebody say “what? you don’t know?”, (f) align BI along a key business process, (g) implement dashboards with your best guess about KPIs, and use them to lead discussion on what the organization should be measuring.
  • BI Extranets to customers, partners, and suppliers. These are perhaps the highest-ROI BI projects of all, but often the last to get implemented.

4. BI isn’t about data, it’s about insight

  • Nobody needs more “data”. We’re drowning in it, and things are getting worse. The cost and time for data integration and quality is systematically underestimated in BI implementations (the iceberg problem). Walking the CFO/CEO/COO through a big piece of paper showing the real-life mess that generates the figures they report to Wall Street can help generate awareness and funding.
  • Fragmentation. Fragmented data sources are the norm, not a temporary state of affaires. It will ALWAYS be necessary to integrate information from multiple sources in order to get a global viewpoint.
  • Benchmarking. What executives really care about is benchmarking against external data sources. Make sure this is part of the implementation. SOA architectures and “information on demand” is making this easier.
  • Trust. Business people don’t trust the data they are provided. Poor data quality is a given, but most organizations don’t know where or how much they are suffering — you need to shine a flashlight into the dark corners. And cleansing the data isn’t enough — the process and results must be transparent to the users (you trust Fedex to deliver, right? So why do you care about tracking?)
  • Poor Analysis Skills. Studies show that business people are not very good at analyzing data — more data can actually lead to worse decisions. A BICC with analysts on staff can help avoid problems, as can greater collaboration. (Did you know that 99% of teenage suicides had listened to rock music in the week before their death?)

5. BI isn’t about perfect planning, it’s about being pragmatic.

Planning is essential, but plans are useless. It’s not about doing it right in theory, it’s about dealing with real-life changes.

  • Executive sponsorship. This is essential, but you have the responsibility to get on the shortlist of things they care about. This requires (a) successful prior projects, (b) marketing and promotion, (c) linkage to company goals, (d) linkage to his or her personal goals/career.
  • Performance management. When implementing BI, there’s a tendency to try and measure the wrong things, in the wrong ways, and measure too much. People are not pigeons — i.e. it’s more complicated than giving simple treats for pecking in the right place. A great body of research shows that the way typical managers expect people to react to rewards and KPIs is just flat-out wrong.
  • Budgeting and planning. Successful strategy implementation requires performance management and BI, and that often passes by the budgeting process. The “budgeting game” can result in deeply dysfunctional behavior in companies. “Beyond Budgeting” is an alternate approach that essentially uses BI and benchmarking to run the organization.
  • Getting the time to do it right. (a) standardization and simplification, (b) do “less”, more successfully, (b) BICC efficiencies, (c) using BI and dashboards for IT, (d) software as a service
  • Other tips: (a) keep the project up to speed — if you get “tired out”, hand over to new blood, (b) small projects towards a strategic whole
    , (c) the ONLY cardinal sin is to be out of alignment with the business users, (d) admit problems fast.

Finally: successful BI requires a incredible diversity and level of general skills: mastery of technology, marketing and communications, diplomacy, project planning, deep business knowledge, leadership and people skills. Folks that implement BI are my heros. Good luck!





5 responses to “The Five Fatal Flaws of BI”

  1. […] some basic comments in the “notes” section and I covered the same material in a previous post. When I have time, I hope to develop the themes into more complete blog […]

  2. Dhiren Gala Avatar

    Operational BI has changed the scenerio what traditional BI created. Today BI is affordable, scalable, user friendly, highly interactive coupled with multi formatted visually stunning data presentation layers for business users at operational layer.
    Conventional BI have high price licensing policy which make impossible to deploy BI enterprise-wide.

  3. josephmartins Avatar

    The points you raise in this post are true for every aspect of business. One could substitute “Operating a business” for “BI” in the section titles.
    We’ve been preaching these ideas for years. We’ve made progress, but one thing is certain: there is no shortage of organizations in need of assistance.
    I’m glad to have found your site. One of the few worth bookmarking.

  4. Daniel Avatar

    I really enjoyed your presentation on this topic at Insight Europe – it was awesome!
    Hope to read more about this on your blog in the future.

  5. Forte Financial Blog Avatar

    Businss Intelligence: 5 [mis]Assumptions that Lead to Failure

    If you are contemplating a Business Intelligence initiative (or in the midst of one) I strongly encourage you to read this post by Timo Elliott at the BI Questions Blog. He lists five fatal assumptions about BI and offers insight