As CIOs will attest, information isn't in short supply. What they and their organizations really need is better
business intelligence (BI): the ability to analyze discrete pieces of information and use them to gain a competitive edge.
This sounds simple enough, but experts say the concept of BI has not been widely understood by employees below C-level management. Typical of many organizations is the phenomenon of data in isolation: information buried within discrete ERP, customer relationship management and other data systems of individual departments.
"If you've got 100 people pushing around spreadsheets and Access databases, you can't audit [the information], you can't track it … and you can guarantee that at some level, there are going to be mistakes," said Scott Sognefest, a BI expert at Deloitte Consulting LLP in Chicago.
Fears of regulatory failure, coupled with increased global competition and the rise of Internet technologies, are changing how some CIOs handle the training aspect of BI. During the past few years, more and more enterprises have launched -- or begun to consider -- formalized training organizations known as Business Intelligence Competency Centers, or BICCs.
Normally comprised of cross-functional teams of people from IT and business units, a BICC sets the stage for "evangelizing" BI to end users, said Dan Vesset, an analyst at research firm IDC in Framingham, Mass.
BICCs take various shapes, from the formalization of a new department to an informal group with dotted-line responsibilities, to initiatives sometimes spearheaded by only one or two people. However it is designed, the goal is often the same: deliver a "self-service environment" in which people run their own reports and queries.
More than half of large organizations (those with more than $500 million in annual revenue) have implemented BICCs or plan to do so, according to a joint survey last year by Computerworld, BI software company SAS Institute Inc., and Intel Corp. Smaller organizations -- those with yearly revenue less than $500 million -- aren't quite as eager: only 6% have BICCs, although 17% are likely to launch similar training initiatives during the next 12 months, according to the survey.
CIOs' renewed focus on BI training stems from two major realizations: unmanaged costs and legal risk.
"The competency centers are a growing realization by CIOs and CFOs that they don't have the people who understand the kind of information the business needs," Sognefest said.
Also, CFOs are putting pressure on CIOs to get a better return on IT investments. "They're realizing how much money they spend [cumulatively on IT projects], and it is way more than they ever imagined," Sognefest said.
TD Meloche Monnex Inc., a large property and casualty insurer in Montreal, runs perhaps one of the most mature BI competency centers in operation. Since launching it in 1999, TD Meloche has saved about $1 million a year by automating the financial reports it files with regulatory agencies. In addition, the company has reduced the number of reports used throughout the organization, from 260 originally to between 10 and 20.
"It is not sufficient to provide new reports; we also needed to stop non-necessary reports," said Carl Lambert, TD Meloche's vice president for forecasting and business intelligence.
Recently, TD Meloche used BI software to reduce customer churn. Lambert's BI team analyzed several control groups of customers, trying to predict which might be likely to switch carriers. Using that analysis, sales and marketing teams were able to zero in on those customers and woo them with special promotions.
"We were able to retain about 35% to 40% more of those customers" than if the analysis had not been done, said Lambert.
BI represents one of the fastest-growing sectors of the IT software market. IDC says the business analytics market accounted for $18.25 million in global revenue in 2006, and is forecast to grow at a compound annual rate of about 10% a year during the next five years.
But BI training primarily is about people, not technology, said Betsy Burton, an analyst at Stamford, Conn.-based Gartner Inc. Internal discussions about BI training should lead organizations to review their business processes, as well as their people's ability to execute them.
"Organizations are trying to shift from tactical responses for reporting to [address] more strategic questions, like 'How do we teach people to use information to drive our business?'" Burton said.
That shift is pushing decision making beyond senior executives to lower levels within organizations. Once people understand which information is critical and how it can be used, then CIOs can decide about applications and platforms, Burton said.
"Business intelligence is not a project; it's a process and an evolution. It's a matter of making your organization, over time, much more analysis- and information-driven."
For BI training to really take hold, CIOs should start at the top. So said Wayne Eckerson, director of research at The Data Warehousing Institute in Seattle. "Once a CEO starts using the output of BI tools, everyone else in the organization will follow suit."
Garry Kranz is a freelance business and technology writer in Richmond, Va. He can be reached at email@example.com.