What is business intelligence? The first thing that may come to mind is a flashy dashboard with cool gauges, graphs and pie charts. Some people associate the term with complex multi-million dollar data warehouse projects. “Business Intelligence” is actually an umbrella term that includes aspects of the fields of data mining, data visualization, predictive analytics, cluster analysis, big data and even artificial intelligence. It’s used so broadly and so often that it is almost meaningless as a noun.
To me, business intelligence is a verb. It’s a process designed to improve performance by using data to make decisions. The outputs of a business intelligence initiative are often dashboards and reports that use data visualization techniques – but the outcome of a business intelligence initiative is the ability to make data-driven decisions to achieve strategic objectives.
Many associations are not really sure how to begin a business intelligence (BI) initiative. There is confusion about how to scope a BI project, as well as what to measure and how to determine the Key Performance Indicators (KPIs). My experience is that 80% of the work in a business intelligence project is not technical, but includes the less glamorous but absolutely critical components of data source identification, data definition, data cleansing, as well as the most important aspect: obtaining organization buy-in and educating the staff on the importance and benefits of the BI initiative.
I believe that when it comes to BI, Stephen R. Covey was right when he said, “begin with the end in mind.” I recently attained my Balanced Scorecard Professional certification from the Balanced Scorecard Institute because I recognize the importance of doing the right things right – and for BI that means starting with the organization’s strategic plan.
The Balanced Scorecard is a performance management system designed to align, measure and communicate how well an organization’s activities are supporting the strategic vision and mission of that organization. The most important thing that I learned is that every major initiative that an organization undertakes should tie directly back to their strategic plan (these are the “right things”) and should be measured (doing “things right“). Therefore, KPIs should measure those activities that support the four perspectives of the Balanced Scorecard: Customer, Financial, Internal Process and Learning/Growth (also referred to as Organization Capacity). In future posts I’ll explain the process of creating a Balanced Scorecard but the main point of this post is that successful business intelligence initiatives begin with the end in mind and start with the process of identifying those activities that support the organization’s strategic plan.
