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Panaceas for the World's Problems
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Panaceas for the World's Problems
Author:
Steve Anderson
7/1/2009
We have all heard the expression “If it sounds too good to be true, it probably is not true.” We heard it first from our parents, admonishing us about an expensive but ultimately disappointing purchase we had made at an age when we really did not have the resources to justify it. We heard it from our doctor warning us that ‘there is very little proof of the efficacy’ of a new drug or treatment. And we have or will deliver it to our own children when they decide to invest in a company that is really no better than its peers, despite its claims. Wow – we really are as cynical as our parents and grandparents. But intrinsically we all know that they were right to be suspicious; just as you should be suspicious when you browse a three page advertisement in a major publication boasting the wonders of business intelligence. (By the way, we are not focusing on one company – we have seen this from at least five different vendors with virtually the same messaging).
The most recent ad we saw was in the Wall Street Journal two weeks ago. It was released by one of our most respected partners, with an incredibly successful history in computer hardware. But claiming that their business intelligence solutions can solve energy, food, automotive, financial, healthcare, education, technology, innovation, and the rest of the world’s problems has got to make a cynic out of all of us. We all realize the value of great information. We have belabored this point in recent blogs. But for business intelligence vendors to say that their solution can solve the world’s most complex, controversial and intransient problems is analogous to a drug company that claims that they have magically created the wonder drug that will cure all cancers. We are not saying that both are impossible, and we certainly do not want to deter their innovative efforts to achieve these dreams. In fact, we will be so bold to say that we believe both are possible and achievable in our lifetime, along with a whole lot of other dreams that people and their companies have followed. What we are saying is no different than what anybody would say to a victim of a beguiling ‘snake oil’ salesman pawning a new product – “next time, make sure you kick the tires, look under the hood, and take it on a test drive.”
After being in the business intelligence space for over 10 years, and serving over 300 companies, we have two concerns. First, we do not believe that any of the business intelligence solutions in the market today are robust enough to provide the wonder drug that companies and our economy needs. In the business intelligence arena, the panacea would generate information that can do the following: – 1) track true cost and profitability of every aspect of your business; 2) measure your efficiency across all of your processes; 3) predict market demand for your new products; 4) estimate the impact of your strategic decisions; 5) make it obvious what decisions to make; 6) can be understood by all parts of your organization; and 7) can be easily and automatically generated across the enterprise.
Second, we do not believe the client companies (the patients we are trying to cure) have the right data that will make these solutions workable. That is not to say they don’t have data – they have plenty of it. What we have witnessed is that the data may not be well integrated. Most companies we have worked with have financials that don’t match operational / transactional data. For example, when we totaled the revenue in the transaction file (sum the product of quantity x net price), this number did not match the total revenue on P&L. We have also run into companies with three to four different ERP systems across several divisions and hundreds of facilities. We have found inconsistent units of measure, and an absence of data for entire departments (e.g., sales, marketing, research). Net-net: companies don’t lack data, they lack great data.
We do believe that great business intelligence is within all of our grasp - just like we feel about cleaner energy, better drugs, more reliable cars, and more transparent financial controls. We recommend that companies ignore the advertisements, and focus first on ensuring your company has great data. Paraphrasing the words of Paul Woods of IBM, ‘building systems on top of bad data accelerates bad decision making.’ With all of the changes going on in our economy, we cannot afford to let promising innovations like business intelligence become the modern day snake oil. And we want to make sure that existing business intelligence solutions are used for what they were intended to be used for and not stretched to solve ALL the problems in a company, let alone in our world. (We have certainly seen our fair share of BI tools, designed for one thing, but being used for another - such as a planning and forecasting tools being sold to do complex cost allocations.)
Finally, in the immortal words of John Beckwith of Wedding Crashers: “ I'm not standing here asking you to marry me, I'm just asking you not to marry him.” In other words, we are not suggesting you not implement business intelligence, we are just suggesting you be cautious and kick the tires.
Tags:
business intelligence
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