How to Link Business Intelligence to Business Strategy

How to Link Business Intelligence to Business Strategy
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Business intelligence (BI) techniques can help identify weaknesses and opportunities in your operations. Aligning BI efforts with business strategy is essential to maximizing the benefits. Here are five questions to consider when assessing how well a BI project supports business strategy.

1. What are the driving business questions addressed by the BI project?

This is an obvious question, or at least it should be. The allure of data warehousing techniques, big data and the chance to work on challenging analytics can sometimes lead us to think more about technology than business. One telltale sign of this problem is convincing yourself that "if you build it, they will come." In other words, if you work out all the technical challenges and give your users access to tools and data, they will think of something to do with your data warehouse. If you are lucky, this might just work but this is a risky, and potentially costly, way to build a data warehouse.

Without a set of specific business drivers in mind, you risk collecting data that is not needed and organizing it in ways that are either difficult to use or useless. For example, if you build a small data warehouse based on sales transactions, you can assess sales over time, by geographic region and by salesperson. It will not help you understand profit margins of particular products unless you include labor and other operational cost data. 

2. What metrics and measures are made available by the BI project?

With a driving business question in mind, you should understand the measures and metrics that structure the answers to your question. Measures are readily quantifiable attributes, such as the average number of products sold in a transaction or the total salary costs of a department. Metrics are more abstract and somewhat subjective in the sense that multiple measures can be used to assess a metric.

Customer satisfaction is an example of a metric. It can use measures such as the number of complaints, volume of negative reviews online, or number of product returns. How you combine measures can be subjective; for example, you might put more weight on complaints and negative reviews than returns. There is not a single correct way to combine measures to assess business metrics, but you should have a method in mind as you design your BI application and database.

ABOUT THE AUTHOR

Dan Sullivan is an author, systems architect, and consultant with over 20 years of IT experience with engagements in systems architecture, enterprise security, advanced analytics and business intelligence. He has worked in a broad range of industries, including financial services, manufacturing, pharmaceuticals, software development, government, retail, gas and oil production, power generation, life sciences, and education.  Dan has written 16 books and numerous articles and white papers about topics ranging from data warehousing, cloud computing and advanced analytics to security management, collaboration, and text mining.

See here for all of Dan's Tom's IT Pro articles.

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