The business intelligence payoff is here, reveals BusinessWeek/Knightsbridge survey
CHICAGO, IL, Sept. 19, 2006 – Companies adopting implementation best practices are reaping substantial financial success from their investments in business intelligence (BI). According to a new BusinessWeek Research Services survey released today, 62 percent of respondents said recent large-scale or strategic BI initiatives returned the value they expected. And, one of the key drivers to achieving business value was the extensive involvement of C-suite executives, including the chief executive officer (CEO).
Commissioned by Knightsbridge Solutions, the study, “Getting Smart About BI: Best Practices Deliver Real Value,” examines BI implementation practices within organizations and the primary reasons business value is achieved. While other research showed overall value of BI, this report found a strong correlation between adopting specific best practices and business benefit.
Rod Walker, president and CEO of Knightsbridge Solutions, said, “That so many companies achieved value from their BI initiatives confirms our long-time belief that smart, strategic investments in BI coupled with implementation best practices enable organizations to reap significant rewards in terms of improved decision-making, regulatory compliance and overall competitive advantage.”
According to the 359 survey respondents from large and mid-sized companies, the most important prerequisites for BI success are:
involvement of top business executives
viewing data as a valuable corporate asset
adoption of five best practices for BI implementation
Executive sponsorship and involvement in BI projects ranks as the most important role for success—38 percent of the respondents cited an executive sponsor as crucial, while 15 percent of those surveyed ranked a senior IT manager as the most important role.
While other research indicates executive sponsorship is a key role for BI success, the extensive involvement of CEOs was not expected. “Today, senior business executives are highly involved in BI,” said Larry Marion, research consultant at BusinessWeek Research Services and study leader. “The key players are not just IT executives, such as CIOs, but also CEOs, presidents, CFOs, and COOs.”
“In fact, the survey respondents said that CEOs were more likely to be involved in large-scale or strategic BI projects than CIOs.” Almost six out of 10 respondents said their company’s president or CEO is involved in BI decisions, while around half said their company’s chief financial officer (CFO) and chief information officer (CIO) are involved.
One CIO participant in the research, Jim Honerkamp of The Hillman Group, a manufacturer of fasteners and other hardware products, noted that top managers only paid “lip service” to BI initiatives until the CEO began quizzing them on data from the BI-generated reports. “Having that kind of strong, high-level sponsor made all the difference,” he noted. “Otherwise, it can be very hard to get people to change their habits and processes.”
The survey also indicated a strong correlation between how companies view and treat data and the likelihood of achieving business value. More than half of the respondents said their organizations view data as a corporate asset, but almost two-thirds of the companies that have achieved greater than expected value from their BI systems viewed data as a corporate asset.
“And to take this correlation a step further, the survey revealed that companies implementing five BI best practices to optimize the value of their data were significantly more likely to achieve the expected business value than companies that didn’t,” Marion said. The five best practices include:
Business information governance programs
60 percent adoption by companies who have achieved BI success versus 51 percent overall
Enterprise information strategy
66 percent adoption by companies who have achieved BI success versus 54 percent overall
Information quality programs
69 percent adoption by companies who have achieved BI success versus 54 percent overall
Enterprise data warehousing
66 percent adoption by companies who have achieved BI success versus 59 percent overall
BI competency centers
48 percent adoption by companies who have achieved BI success versus 39 percent overall
Darren Taylor, vice president, Information Access Division of Blue Cross Blue Shield of Kansas City said, "Our vision was to become an information-driven organization. To compete effectively with national health plans, we needed to leverage our information resources. Knightsbridge worked with us to define and implement an enterprise information strategy, enabling us to leverage our information assets to become more efficient, launch new services and proactively engage with our customers and partners."
According to Knightsbridge client Michael Landis, head of Information Architecture for BP's integrated supply and trading, "Our Information Management Program is transforming the way data is managed in our business. We are treating data as a corporate asset and making it available to applications and analysts in a timely, consistent and reusable manner to drive transparency and integration across a disparate application landscape. Our enterprise information strategy incorporates many of the BI best practices, including data governance, data quality assurance, and enterprise data warehousing initiatives. By implementing this vision, we will improve our efficiency, control, and competitive advantage and keep BP at the forefront of the industry."
BI success and value hinge primarily upon executive sponsorship, business and IT collaboration and implementation of these five best practices according to the study findings.
The study reveals BI failures occur for several reasons. Lack of user adoption was the most frequent reason along with two others including incomplete or inaccurate business requirements and disconnect between BI and performance management in the organization.
“All three of these findings are indicative of a lack of alignment between the needs of the business and the solution that IT produces, and sometimes we observe this phenomenon with our clients,” Walker added. “It’s our job as strategic advisors to avoid these pitfalls and help clients achieve success using an integrated approach of three fundamental capabilities–business enablement, information management and program management. The survey results demonstrate a clear link between maturity in these capabilities and the BI business value that companies realize,” commented Walker.
“Getting Smart About BI: Best Practices Deliver Real Value,” the survey and research report, is available on www.knightsbridge.com/bi_bestpractices. A webcast to present the findings and the Knightsbridge response will be held Thursday, Oct. 19, 2006 at 10 a.m. PT/1 p.m. ET.
About Knightsbridge Solutions LLC
Global 2000 companies and large data-centric organizations turn to Knightsbridge as the leader specializing in business intelligence solutions for their most difficult data problems—problems rooted in massive data volumes or complex information challenges. Knightsbridge delivers actionable and measurable business results that inform decision-making, optimize IT efficiency and improve business performance. Focusing exclusively on the information management disciplines of business intelligence, data warehousing, data integration and information quality, Knightsbridge delivers practical solutions that reduce time, reduce cost and reduce risk. Knightsbridge serves as a trusted advisor, strategic business partner, and expert implementer in such industries as: communications, consumer products, energy, entertainment, federal government, financial services, health and life sciences, insurance, manufacturing, media, retail, technology, and other industries. Visit Knightsbridge online at www.knightsbridge.com.
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