Back in February, Dorothy Miller wrote a piece at IT Business Edge entitled, Measuring the Return on Investment for Business Intelligence. I wrote a comment on this, which I subsequently expanded to create my article, Measuring the benefits of Business Intelligence.
This particular wheel has now come full circle with Ann All from the same web site recently interviewing me and several BI industry leaders about our thoughts on the best ways to generate returns from business intelligence projects. This new article is called, Big vs. Small BI: Which Set of Returns Is Right for Your Company? In it Ann weaves together an interesting range of (sometimes divergent) opinions about which BI model is most likely to lead to success. I would recommend you read her work.
The other people that Ann quotes are:
||Vice president of research and analytics for consulting company BPM Partners.
||Founder of consulting company BI Metrics (and author of the article I mention above).
||Chief marketing officer for Information Builders, a provider of BI solutions.
||Industry analyst and author of the annual BI Survey.
Some differences of opinion
As might be deduced from the title of Ann’s piece the opinions of the different interviewees were not 100% harmonious with each other. There was however a degree of alignment between a few people. As Ann says:
Corcoran, Colbert and Thomas believe pervasive use of BI yields the greatest benefits.
On this topic she quoted me as follows (I have slightly rearranged the text in order to shorten the quote):
If BI can trace all the way from the beginning of a sales process to how much money it made the company, and do it in a way that focuses on questions that matter at the different decision points, that’s where I’ve seen it be most effective.
By way of contrast Pendse favours:
smaller and more tactical BI projects, largely due to what his surveys show are a short life for BI applications at many companies. “The median age of all of the apps we looked at is less than 2.5 years. For one reason or another, within five years the typical BI app is no longer in use. The problem’s gone away, or people are unhappy with the vendor, or the users changed their minds, or you got acquired and the new owner wants you to do something different,” he says. “It’s not like an ERP system, where you really would expect to use it for many years. The whole idea here is go for quick, simple wins and quick payback. If you’re lucky, it’ll last for a long time. If you’re not lucky, at least you’ve got your payback.”
I’m sure that Nigel’s observations are accurate and his statistics impeccable. However I wonder whether what he is doing here is lumping bad BI projects with good ones. For a BI project a lifetime of 2.5 years seems extraordinarily short, given the time and effort that needs to be devoted to delivering good BI. For some projects the useful lifetime must be shorter than the development period!
Of course it may be that Nigel’s survey does not discriminate between tiny, tactical BI initiatives, failed larger ones and successful enterprise BI implementations. If this is the case, then I would not surprised if the first two categories drag down the median. Though you do occasionally hear horror stories of bad BI projects running for multiple years, consuming millions of dollars and not delivering, most bad BI projects will be killed off fairly soon. Equally, presumably tactical BI projects are intended to have a short lifetime. If both of these types of projects are included in Pendse’s calculations, then maybe the the 2.5 years statistic is more understandable. However, if my assumptions about the survey are indeed correct, then I think that this figure is rather misleading and I would hesitate to draw any major conclusions from it.
In order that I am not accused of hidden bias, I should state unequivocally that I am a strong proponent of Enterprise BI (or all-pervasive BI, call it what you will), indeed I have won an award for an Enterprise BI implementation. I should also stress that I have been responsible for developing BI tools that have been in continuous use (and continuously adding value) for in excess of six years. My opinions on Enterprise BI are firmly based in my experiences of successfully implementing it and seeing the value generated.
With that bit of disclosure out of the way, let’s return to the basis of Nigel’s recommendations by way of a sporting analogy (I have developed quite a taste for these, having recently penned artciles relating both rock climbing and mountain biking to themes in business, technology and change).
A case study
The [English] Premier League is the world’s most watched Association Football (Soccer) league and the most lucrative, attracting the top players from all over the globe. It has become evident in recent seasons that the demands for club success have become greater than ever. The owners of clubs (be those rich individuals or shareholders of publicly quoted companies) have accordingly become far less tolerant of failure by those primarily charged with bringing about such success; the club managers. This observation was supported by a recent study that found that the average tenure of a dismissed Premier League manager had declined from a historical average of over 3 years to 1.38 years in 2008.
As an aside, the demands for business intelligence to deliver have undeniably increased in recent years; maybe BI managers are not quite paid the same as Football managers, but some of the pressures are the same. Both Football managers and BI managers need to weave together a cohesive unit from disparate parts (the Football manager creating a team from players with different skills, the BI manager creating a system from different data sources). So given, these parallels, I suggest that my analogy is not unreasonable.
Returning to the remarkable statistic of the average tenure of a departing Premier League manger being only 1.38 years and applying Pendse’s logic we reach an interesting conclusion. Football clubs should be striving to have their managers in place for less than twelve months as they can then be booted out before they are obsolete. If this seems totally counter-intutitive, then maybe we could look at things the other way round. Maybe unsuccessful Football managers don’t last long and maybe neither do unsuccessful BI projects. By way of corollary, maybe there are a lot of unsuccessful BI projects out there – something that I would not dispute.
By way of an example that perhaps bears out this second way of thinking about things, the longest serving Premier League manager, Alex Ferguson of Manchester United, is also the most successful. Manchester United have just won their third successive Premier League and have a realistic chance of becoming the first team ever to retain the UEFA Champions League.
Similarly, I submit that the median age of successful BI projects is most likely significantly more than 2.5 years.
I am not a slavish adherent to an inflexible credo of big BI; for me what counts is what works. Tactical BI initiatives can be very beneficial in their own right, as well as being indispensible to the successful conduct of larger BI projects; something that I refer to in my earlier article, Tactical Meandering. However, as explained in the same article, it is my firm belief that tactical BI works best when it is part of a strategic framework.
In closing, there may be some very valid reasons why a quick and tactical approach to BI is a good idea in some circumstances. Nevertheless, even if we accept that the median useful lifetime of a BI system is only 2.5 years, I do not believe that this is grounds for focusing on the tactical to the exclusion of the strategic. In my opinion, a balanced tactical / strategic approach that can be adapted to changing circumstances is more likely to yield sustained benefits than Nigel Pendse’s tactical recipe for BI success.
Nigel Pendse and I also found ourselves on different sides of a BI debate in: Short-term “Trouble for Big Business Intelligence Vendors” may lead to longer-term advantage.
 Dr Susan Bridgewater of Warwick Business School quoted in The Independent 2008