Thursday, May 17, 2012

Redefining BI

In the March 2012 edition of IT in Europe,'s Brian McKenna presents a simplified definition of BI:

Business Intelligence is ripe for defamiliarisation as a term. For IT professionals, the temptation is to understand it to mean query and reporting tools from the BI megavendors. But for one of the finance professionals quoted in this issue of IT in Europe: Data Management & BI Edition, “business intelligence means trying to make money out of data.” [Emphasis added.]

I like this definition, because it takes us closer to first principles. It takes us back to strategic objectives.

When we get set in our ways, comfortable and complacent in the status quo, we start to mistake the practice for the objective. Why do we do things the way we do them? Because that's the way we've always done them.

But the imperative to optimize the top and bottom lines of an enterprise requires us to re-examine our practices on a continuous basis. Can the practice be improved to bring us closer to our strategic objectives? Can a practice be said to be a best practice if it is not connected somehow to the realization of a strategic objective?

As I said, I like the redefinition. However, I don't think it goes far enough. I'm in the Peter Drucker school of thought on this one. Drucker was suspicious of the profit motive as a primary business driver. The purpose of a business, according to Drucker, is to create a customer. By measuring the success of the company against the ongoing relationship with the customer, we create a business that is first and foremost sustainable, but also mutually profitable.

BI's potential contribution to the pursuit of strategic objectives is obvious but not inevitable. BI professionals need to take a progressive approach ‑ to look for ways to achieve strategic objectives through better utilization of the BI platform.

In an article dedicated to the centenary of Drucker's birth, Oliver Marks notes another Drucker maxim: "Knowledge has to be improved, challenged, and increased constantly, or it vanishes." For the BI professional, it's not just about improving knowledge, but about improving the way knowledge is stored, managed and disseminated.

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