Back in January of 2008, SI ran this now classic post by Eric Strovink, formerly of Opera Solutions, BIQ (acquired by Opera Solutions), and Zeborg (acquired by Emptoris, which was acquired by IBM). While writing tomorrow’s rant, the doctor was reminded of this classic post and how most companies and people screw up the basics of BI and spend analysis. Since this will put you in the right frame of mind to understand tomorrow’s post, the doctor has decided to repost it.
Baseline recently put a slide show on their site illustrating “5 Ways Companies Screw Up Business Intelligence — And How To Avoid The Same Mistakes,” with data drawn from CIO Insight. The slides are an excellent example of how mainstream IT thinking misses the essential problems of business data analysis.
Let’s take the “screw-ups” one at a time:
- Spreadsheet proliferation (97% of IT leaders say spreadsheets are still their most widely used BI tool.)
Spreadsheets are one of the most valuable business modeling tools available, and IT might as well understand that they’re not going away. The problem is when spreadsheets (and offline tools like Access) are used inappropriately, to manipulate transactional data rather than drawing it in the right format from a flexible store. The solution provided by Baseline is to “cleanse and validate your data, then migrate the information to a central server/database that can be the backbone of any BI strategy.” Bzzt! Sorry, a central database won’t solve the analysis problem, and at the end of the day you’ll have just as many spreadsheets as before. That’s because a fixed schema data warehouse is a lousy analysis tool, and might as well be on planet Neptune as far as usability for the business analyst is concerned. There’s nothing wrong with a reference dataset, but business analysts need to be able to manipulate its structure as easily as a spreadsheet, or they will simply extract the raw data from it and manipulate the data offline, with the same slow, expensive, and uncertain results as today.
- Systems can’t talk to each other (64% of IT leaders say integration and interoperability of BI software with other key systems such as CRM and ERP pose a problem for their companies.)
Right! Except that the Holy Grail of trying to extend a “centralized” database umbrella over completely disparate systems is both incredibly expensive and nearly impossible. Baseline suggests “[partnering] with a reputable systems integrator.” Good for them — at least they dodge this bullet rather than getting the answer completely wrong. The right answer is that business analysts should be able to construct BI datasets on their own, as needed, from whatever data sources are useful/appropriate, and it shouldn’t be difficult for them to do so. Concentrating all of the information under one umbrella isn’t necessary; many umbrellas can do the job, and if they’re easy to deploy, they’re both inexpensive and provide a better and more flexible answer.
- No centralized BI program (61% say they don’t have a center of excellence of the equivalent of BI.)
And they’d be well advised to tread carefully, because BI systems have a track record of poor performance and poor customer satisfaction. Why? Because the analyses you can do with a fixed data warehouse are limited to the views set up a priori by IT or by the vendor, and those views are largely immutable. Baseline dodges this one, too, suggesting the “[creation of] a data governance and data stewardship program.” Can’t argue with that in principle, but a governance and stewardship program doesn’t actually put any meat on the table. How about putting tools into analysts’ hands that they can actually use? Right now?
- Data lacks integrity (57% say poor data quality significantly diminishes the value of their BI initiatives.)
Hmmm, I wonder why the data are of such poor quality. Could it be that the BI system doesn’t really provide much insight? Could it be that the fixed schemas set up by IT or by the vendor don’t have any applicability to day-to-day questions? Could it be that the inability of the BI system to re-organize and map data on the fly causes errors to persist over time? Baseline recommends spending more money on data cleansing, which might make a cleansing vendor quite wealthy, but won’t help much. It typically isn’t cleansing that’s the problem, it’s (1) the fixed organization of the data, which is guaranteed to be inappropriate for any analysis that hasn’t been anticipated a priori, (2) the ad hoc reporting on it, which has to be easy to accomplish, as opposed to requiring IT resources (see below), and (3) the fact that cleansing can’t be accomplished on-the-fly (as it should be) by the business analysts themselves.
- Managers don’t know what to do with results (58% say most users misunderstand or ignore data produced by BI tools because they don’t know how to analyze it.)
Even when BI is in place, nobody knows what to do with it. Baseline recommends that “IT staffers… should work closely and regularly with business managers to ensure that measurement, reporting, and analysis tools are supporting business goals.” But this is precisely the problem. For business analysts, BI systems are difficult to use and set up, it is difficult to create ad hoc reports, and it is impossible to change the dataset organization. It is also politically impossible to change the dataset organization if it is being shared by hundreds or thousands of users. How are you going to get them into the same room to agree on the changes?
So, Baseline is proposing (in essence) that IT resources sit cheek-by-jowl with business users, to ensure that they can get value out of a system that they otherwise could not use. This is certainly a “solution” of sorts, but it’s not practical. Either business analysts can use the system on their own, or the system will be of marginal value to them. It’s that simple.