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Treat Your BI Vendors as a Strategic Partner

BEYE LogoI just read a great article that I agree with wholeheartedly. John Myers writes a regular blog on BEYE website. Unfortunately he doesn’t provide a trackback, so I can’t easily reference his original posting, but here’s what he says:

The next time that I hear about how IT departments want to drive to a standard, I will forward to them either this Elana Varon interview with Gary Hamel, famed business strategist, or just send them in the direction of his new book.

Hamel rightly points out in Varon’s interview that too many IT organizations are moving toward a best practices model rather than a best for business model:

“So many companies are now running the same software platforms, whether Oracle or SAP or whatever. Increasingly, we rely on the same handful of off shoring companies or IT service companies. There are a whole lot of things that IT folks have to do to keep up as part of the IT arms race, but in the end the only thing that’s really going to make a difference is whether you’re using IT in a unique way to do unique things where you don’t find any other benchmarks. If you ask the average CIO what percentage of his total budget and headcount is devoted to things that are unique to his industry, I think it’s probably too small a number.”

For every opportunity to optimize business operations, those IT departments are taking one step away from maximizing the unique attributes of the business. In telecommunications, management needs to focus their strategies, and budgets, on what will break them from the pack of the “established” telecos (ie AT&T, Verizon, Vodafone, Telefonica) and position them for a unique position or offering that will provide competitive advantage.

Since I work for Business Objects, it’s my job to work with companies and help them to use Business Intelligence as a competitive advantage. The problem is that so often it’s the IT organizations that try and keep you at arms length. They treat you as “a vendor” and not as a strategic partner… and yet in my experience there are two key qualities which set companies apart:

  1. The Acknowledgment of BI as a technology to provide strategic, competitive advantages
  2. The mandate from upper management to realize those advantages

What companies so often don’t understand is that BI can be a GREAT vehicle for that competitive advantage. The marketing departments of every successful software company have articles about ROI, increased revenues, increased efficiencies, decreased costs, ROI, etc.

But what about long-standing competitive advantage?

This is especially critical in industries such as telecommunications where competition is fierce and we continue to see major innovations as these companies uses technology to set itself apart, but one of the biggest challenges is to know where you are today and were do you go from here? It’s amazing to me how many companies lack a comprehensive view of key corporate metrics. If you don’t know where you are, how are you supposed to know where to go next?

Do you know the answers to some of these key questions about your customers and products?

  • Should we focus on customer attrition or on customers who are spending less that they did previously?
  • How do targets affect discounts?
  • Which products are discounted the most? Why?
  • What is the spending profile of my different customer segments?
  • How much revenue came from new vs. existing customers?
  • Who is making the most revenue from the least number of sales?
  • What percentage of our customers deliver the top 25% of our revenue?
  • Why are customers moving from one segment to another?
  • How soon after the sale do customers call for help? What products do they need help with?
  • Did customers receive adequate training and information about the product?

Business Intelligence provides you a framework to answer all these types of questions. Most organizations have this data somewhere in their enterprise data warehouse or operational system but either don’t see the value or have yet to make the appropriate investments and having the data but not turning that data into intelligent information, is like burning money.

Burning Money

  1. November 28th, 2007 at 00:13 | #1

    Dave- You are correct. Many in telecommunications view Business Intelligence as simply a technology and not a framework for competitive advantage. How many times has BI been dismissed as simply “reporting” or “exception reporting”? Too often…

  1. September 14th, 2009 at 08:33 | #1