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The secrets of good business intelligence

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16th Aug 2010
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KPMG’s Herman Heyns reveals the six steps to BI failure and how organisations can avoid wasting their money on projects that don’t pay off.

In a recent article for AccountingWEB, I revealed that one in two senior managers don’t have confidence in the numbers given to them or have access to the right information at the right time. In a highly competitive post-recession marketplace the ability to make smart decisions quickly, and with confidence, makes the difference between peak and poor performance. The secret to success is good business intelligence.

According to KPMG research, one in two organisations plan to adopt new business models over the next three years; new technologies and new ways of working are stimulating a growing need for reliable, up-to the-minute data. How else will management have the insight and agility to stay ahead of the competition?

Used correctly, business intelligence (BI) makes real sense: reducing costs, adding value and making an organisation sleek and efficient. Widespread belief in BI’s potential is seen in positive reactions from the financial markets to investment in BI over both the short and long term.

It’s no surprise then that AMR Research estimated over $57 billion was spent on BI in 2008 and that in Gartner surveys CFOs and CIOs regularly rate BI their top priority. What is surprising is that many organisations get it wrong.
Six steps to failure

According to recent research from the University of Cambridge commissioned by KPMG, half of all BI projects are failing. This is because organisations are:

  • Failing to use BI to revise organisational and technological infrastructures simultaneously.
  • Approaching projects as ‘an IT issue’ instead of engaging people across the organisation to put business strategy into action.
  • Dealing with legacy IT systems that are not up to scratch, or are failing to cope with multiple databases in various locations due to recent M&As.
  • Failing to address underlying data issues or challenging the status quo of measures and reports.
  • Still trying to use outdated models of management, some developed in 1970s.
  • Failing to get the basics right by implementing BI without due thought given to the design and role of data across the organisation.

Six steps to success
KPMG Performance & Technology has identified six steps organisations need to take to capitalise on BI’s full potential:

Business strategy alignment

  • What information is key to delivering strategy?
  • How can it be deployed in a way that maximises business performance cost-effectively?

Governance

  • What are the principle processes and the organisational structure required to ensure integrity and the continuous alignment of information to business needs?

Performance management process and reporting

  • How can financial planning and business performance management be improved?
  • What are the key performance indicators (KPIs) and reporting requirements of the business?
  • How can the financial consolidation be best executed?

Integrated information management

  • What is the information content and data model required to support reporting requirements?
  • Where are the value creation opportunities in standardising KPI and master data?

BI platform

  • What is the right application to support information delivery, financial consolidation, planning, and performance management?
  • How can the application’s implementation be delivered successfully and make the overall solution really deliver value to the business?

Infrastructure

  • What does all this mean from a technical infrastructure viewpoint?
  • How can security, access and performance of the solution be ensured?

These steps can be applied individually but maximum return on investment comes from enhancing organisational and technological infrastructures at the same time.

In the wake of the global financial crisis, successful BI means companies can examine and identify what really matters, reduce information processing costs and keep focus on core priorities. It also helps mitigate risk and increase agility.

Herman Heyns is partner at KPMG Performance & Technology.

 

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