Reaping business intelligence's harvest

David Braue ZDNet Australia

Published: 05 Jan 2004 11:59 GMT

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If you've been working in business for any length of time, you would have heard countless war stories. There was, for example, the one about the notebook manufacturer whose salespeople won a contract for 600,000 systems only to find its parts department couldn't source more than 300,000 notebook keyboards to make them.

Or the sales manager who set himself up for a bonus by setting conservative sales targets that were easily beaten -- until it came time to deliver, when manufacturing was struggling to meet real sales because the production manager had set her strategy based on the low sales forecast. And what about the toy manufacturer that forgot to consult its logistics provider when ramping up production, ending up with loads of unshippable orders that kept shelves empty two weeks before Christmas.

These sorts of stories reflect the type of all-too-common problems that can result when different parts of a company simply can't communicate properly. This was almost understandable years ago, when business managers used to plan strategies based on gut instinct and information that was often months out of date. Yet with the wealth of information available to today's managers, the problems have simply morphed into a different form as managers have come to rely on information systems that often reflect only part of the whole truth -- and, in so doing, drive poor business decision making.

Business intelligence (BI) software was, from its inception, designed to fix that situation by allowing first executives, and eventually large numbers of middle managers, to analyse data pertaining to activities that were not within their immediate control. This allowed the correlation of figures in a way that recognises the implicit interconnectedness of the operating divisions of modern business: nobody operates in a vacuum, and BI reflects that fact.

Sort of. The importance of good business reporting has helped the BI segment enjoy strong demand regardless of the varying fortunes of IT on the whole, yet most of the estimated 80 percent of businesses that have implemented BI systems have done so in what analysts like to call a "stovepipe" or "silo" manner.

You'll probably call it something else, though, after you realise the system in which your department has invested months of time -- and tens of thousands of dollars -- isn't giving you a complete picture of what's happening in the parts of the business outside your immediate control.

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