Of course, you have thoroughly thought about your business intelligence (BI) strategy and have it available …. on ONE slide! Your strategy for execution, business needs, governance model, BI objectives and needs, information categories, components and architecture, sponsorships, measurement, training, support and metadata management … they all fit on your magical one-slider. Please allow me to smile :)
I don’t want to dwell on the importance of a solid BI Strategy; there has been plenty written about that already. No, this blog is about how you can kick off a solid strategy in just a few clearly outlined steps. All it takes is a few days – not weeks or months! – to build a rock-solid base for your BI strategy.
The BI strategy foundation I help customers with, is based on four key steps:
- Current BI needs baseline analysis
- BI strategy & execution baseline
- Gap analysis
- Compose your BI strategy foundation
1. Current BI needs baseline analysis
Step 1 is about creating a baseline for the BI needs in your organization. The objective of this step is to create a high-level insight into the BI needs by Line of Business (LOB), and their expected impact on the company’s performance management. To gather the required information, I have a 1-hour interview with the representative decision-takers per LOB (i.e. HR, finance, sales, purchasing), discussing what they need to optimize their LOB’s performance. After the interviews, I produce an overview with:
- Business challenge and degree of priority/pain on a scale of 0-10
- Business impact and degree of impact on a scale of 0-10
Example of a sales LOB:
Business challenge: Our sales reporting is not holistic. We need to quickly see overall sales performance and to identify differences in performance in specific teams, per location or by individual sales reps. Degree of priority: 8
Business impact: This will help us easily increase revenues, immediately identify competitive inroads, and give us the ability to quickly and appropriately reward our outstanding teams/individuals. Degree of impact: 7
Per LOB I typically end up with 10 to 20 business challenges and business impact statements. I use a simple spreadsheet to log my challenges and impact, together with their individual scorings. Visualization tools like SAP Lumira easily allow me to share detailed insights on the `BI needs baseline’ with my customers. If you, for example, use scatter-chart with degree of pain plotted against degree of impact, one can easily spot the key domains that require focus.
2. BI Strategy & Execution baseline
I then assess the customers’ existing BI strategy, define their components, their completeness of execution and business impact. More specifically, the BI strategy and execution baseline includes five categories of strategy components, each of which is examined on three key aspects: existence, execution and impact:
a) Objectives: This describes the extent to which the history, key reasons and objectives for the BI strategy have been documented and to what extent the objectives have been executed. Degree of documentation definition on a scale of 0-10.
b) BI needs: This describes the extent to which the business needs and the future state have been defined and executed, in terms of the business requirements and corresponding KPIs. Degree of KPI definitions on a scale of 0-10.
c) Business case: This describes the extent to which the benefits of implementing the BI strategy have been articulated and quantified. Degree of articulation on a scale of 0-10.
d) Information and Technology: This addresses the types of information that are, and/or will be captured, and the technology that is or will be put in place to meet the BI needs. One of the methods I use to define this is the BI Component selection tool.
e) Organization and implementation: This describes to what extent the organization is ready to implement the BI strategy and is on track to execute. Degree of execution readiness on a scale of 0-10.
This step requires a bit more effort than step 1; my experience is to allocate 2 to 3 days for this to get a fair insight. I log everything again using a spreadsheet with the above-mentioned domains each rated.
Remember that we create a foundation for a BI strategy, and not a detailed strategy execution plan. Detailed strategy plans require steps 2b, 2d and 2e to be further explored. Our foundation is the perfect framework to do so.
Note that, I keep the registration of the above steps simple and with a single rating degree on 0-10 for ‘existence’, ‘execution’ and ‘impact’. If properly done, one can very easily generate a visualized insight into the execution baseline like a radar chart with the three metrics.
3. Gap analysis
As you will have already guessed, the gap analysis in this third step is basically the delta between the two first steps. The objective is to prioritize the gaps and document the benefits of addressing them. The Gap Analysis prioritizes the insights, thus giving customers a clear understanding of where to focus their BI efforts. It also provides an understanding of the value of addressing unmet business needs, which is crucial input to the customers’ investment decisions. The gap analysis will help answer these extra questions for my customer:
- Which gaps will drive the biggest benefit for our enterprise?
- What BI needs are causing the most disruption – and the highest business pain for decision-makers?
- How can or should identified gaps be prioritized to ensure the maximum enterprise impact?
Again I use a very simple spreadsheet to document the individual gaps and their scores. For the score I reuse the degrees from the previous steps. Below a version of the outputs that has been detailed a bit more.
4. Compose your BI strategy foundation
Finally, I create a recommended capabilities map to resolve the business pains from step 1. I use the outcome of the previous thee steps and visualize them in clearly digestible overviews and infographics. Basically, I leverage them to recommend on:
- Strategy recommendations
- Descriptions of the solution and the value of closing the gaps caused by the pains/needs.
- BI category and solution description – what are the BI solutions required for addressing this pain?
If you have rated your degrees consistently, radar and scatter maps will quite clearly indicate what the key needs are, what the current and future capabilities to address those needs are, and – as a result – what the prioritized gaps are.
The above approach works very well for me and especially my customers. Having used it now on several occasions, I see these as the major benefits;
- Easy to use: especially a consistent use of rating the degrees helps to visualize the customer’s situation
- Results in immediate, actionable insights: the prioritized gap analysis can be actioned upon immediately
- Takes reasonable time efforts – most of the time I completed the full exercise in less than 5 days
- Can be used iteratively: one can perfectly apply this approach on a departmental level and later widen the scope to cross-departmental or corporate level
If you want to take your BI strategy one step further, SAP can be used to access our strategy management assistance. Read more about it .