Thursday, January 29, 2009

Five Critical Criteria to start your BI Initiative

1.       Desire Intelligence

This may sound like a given, right?  Well, not necessarily.   Often times I have seen companies approach a BI initiative simply because it is a current industry trend, other CIO’s are doing it so why don’t we.  If our competitors are doing it then we need to stay competitive and do it as well.  WRONG!  Like many things in life, doing something because you feel like you feel like you are forced to will only result in a half hazard attempt and ending in a costly mistake.  So the first step, the first requirement to start a BI initiative is to desire intelligence.  You must crave it, want it, need it, hunger after it, you get the message.  What does that really mean?  You must have a passion for improving your organization through the gathering and analyzing data and applying intelligence in order to turn that data into usable, actionable, priceless information.

Example - While working for a BI vendor, we had a new branch manager come in and he started to immediate gather and analyze information on the current branch he just acquired.  Looking at contracts that were in place, looking at opportunities that were in the pipeline and most importantly looking at the employees.  All this to ensure that this branch would be successful.  During my interview with him, he mentioned to me that he was unsure of what to think about me because I did not have a long history of selling enterprise level software and as a sales engineer that is important.  Well after about an hour of discussion, he told me that he knew that I would be successful because I was extremely passionate about Business Intelligence and helping our customers achieve success.  He was less concerned at that point about what I have done in the past because he was confident of what I will do in the future.  This is an example of how we should approach BI, like the branch manager, come into the project with the desire to learn and analyze the data, recognize passion and don’t let the past be a stumbling block…we will get more to that point in criteria #3.

2.       Know your Business and your Industry

Okay, now I may sound like I am contradicting myself because earlier I said that you shouldn’t go after BI just because it is a popular thing to do or your competitors are doing it.  In context that is true, the entire process should start with desire to make your organization more intelligent.  Another thought here is, “Of course I know my business”.  Fair enough but many times when an organization is implementing some type of Business Intelligence solution, it is lead by the IT department.  While the IT group in your organization may be very familiar with your business and industry, it is only secondary to their knowledge of technology.  Those running the business, those responsible for the primary activities of the revenue generating functions of your business are really the ones who should lead these types of projects.  Without a business sponsor, the project is surely on a path of failure.

3.       Forget about limitations

Another critical reason for these types of initiatives to be driven by the business and not IT is it is much easier for the business to forget about limitations.  Business Intelligence is all about innovation, which I will be blogging about in the coming week (innovation that is).  A major adversary of innovation are limitations.  By first taking into consideration our limitations, we automatically limit the possibilities and success of our solutions.  If IT were driving this type of project, they would automatically be biased by technology limitations.  So know your thinking, “What good is it to come up with an idea that is impossible, that just wastes time and money.”  Oh contraire mon fraire, you see as humans we always limit ourselves by what we know.  Just because we do not know how to do it doesn’t mean it cannot be done.  I learned this lesson the hard way; I was the IT Director for a company whose CEO was constantly coming up with impossible ideas.  In the beginning, the phrase, “We can’t do that, that is impossible” was a common phrase being thrown around.  After repeating that over and over and after reading Bill Gates book “Business at the speed of thought”, I realized that I was too quick to make this statement.  This realization helped me create many solutions at that company that was years in advanced of what was commercially available, and believe it or not, at a fraction of the cost.  It is a natural human propensity to limit ourselves by our own knowledge.

On the business side, make sure you do not think also in terms of what is available, don’t limit yourself to knowledge you know is within your industry but rather information that may be outside your industry but has a direct or indirect affect on your business.  For example, I was working with a prospect on a potential solution, when learning their process for forecasting, I learned that they use over 25 different variables in order to forecast their product manufacturing.  They were able to look beyond their history, so in other words, they did not just look at past performance but rather measured that performance against other variables to establish a relationship and conversely apply that relationship toward future trends of those variables, for example consumer confidence, gasoline prices, new home sales, all of these examples require data that is most likely not controlled by your organization but by leveraging this type of out of our boundaries data you can make your organization much more intelligent.

4.       Don’t forget what you learned in grade school

I know you learned a lot of basic stuff in grade school but here I am referring to more specifically your science class, remember, the one Ms. Wilson taught, the one about the scientific method.  Just in case you do not remember, here they are ( :

a.       Ask a Question

b.      Do your Research

c.       Construct a Hypothesis

d.      Test your Hypothesis

e.      Analyze your data and draw a conclusion

f.        Communicate your results

Following this method will help you form what your solution should be.

5.       Break requirements up into must have and nice to have

The “Communicate your results” in the scientific method actually makes up this portion of the criteria of success.  You must document everything you have learned up until this point in order to gain support for your new BI initiatives.  This information will be vital in generating expected ROI.  This document will also be vital in the next phase of your BI implementation which is selecting a technology vendor.  In the coming week I will outline some guidelines in selecting a technology vendor, and you may be surprised by what I say.