Is BI Standardization a Myth?

Despite some people dismissing it as a myth, BI standardization is alive and well in organizations around the world. Here’s a quick primer on what, why, and how.

What is BI Standardization?

The phrase “BI standardization” often gets a negative reaction, because people equate it with choosing only one tool to the exclusion of all others, and taking away existing products from happy business users.

My definition is this:

Pragmatically implementing BI standards to reduce overlapping tools, lower costs, and maximize the benefits of BI.

The definition explained:

• Pragmatically. It’s not about architectural elegance, it’s about business benefits
• Reduce overlapping tools — it’s about having a rational portfolio strategy, not a single product from a single vendor.
• Lower costs. This is the reason organizations start talking about standardization
• Maximize the benefits of BI: This is why reasons should be looking at implementing BI standards

Other terms that could be used include “BI rationalization,” “BI consolidation,” or “preferred BI vendors” — whatever the language used, there are clear benefits.

Why BI Standardization?

Why do organizations implement BI standards?

• To save money. The first, clearest, and most obvious benefit of standardization is that you can save money in every area of implementing BI projects. You can avoid unnecessarily duplication of the costs of evaluating, purchasing, implementing, and maintaining multiple overlapping BI tools.
• To increase business insight and alignment. The more BI tools you have, the harder it is to get a full understanding of  the business. A single standard makes it easier to establish common definitions of your key performance indicators. You can spend less time arguing over the data, and more time arguing over what to do.
• To reduce risk and confusion. Implementing standards makes it easier to ensure that you’re following data and compliance rules. Having the same tools for financial reporting, risk management, and budget tracking make it easier to spot anomalies.

For more detail, see my 2005 white paper on “Benefits of Business Intelligence Standardization“.

How to Implement Standards?

All organizations have explicit or implicit tiers of IT standards, running the continuum from “we don’t care” all the way through to “don’t even think of using something else”. As business intelligence has matured and become more widespread in organizations, it has slowly climbed the ladder.

BI standards are typically initiated by procurement teams. Noting that the organization is purchasing the same products across multiple departments, they step in to purchase in greater volume for the organization as a whole, driving down the average per-user purchase price.

Note that this only directly saves money on software license costs — typically a tiny proportion of the overall costs of implementing BI. Getting the full benefits of standards requires a team that can persuade various different BI projects to work together for the greater good of all: a BI competency center (see “fixing the BI tragedy of the commons”).

Note that most organizations will never reach their standard, because there are inevitable trade-offs between efficiency and local flexibility — but heading for a standard is obviously better than accepting chaos.

For more information, see my 2005 white paper on “Implementing BI standards — a Field Guide“.

What’s the Future of BI Standardization?

There will always be procurement benefits of buying products in greater volume, but the hard part is standardized metadata and semantics across the breadth of data sources that real-life users are interested in, including personal and non-structured data.

As the business intelligence industry adapts to a services-oriented world, there may be the potential for organizations to be able to mix-and-match different solutions and still retain a coordinated overview of the business as a whole. See “Will BI Sparql Thanks to the Semantic Web“.