The BI-Driven Organizational Transformation

As many businesses face rapidly declining revenues and gloomy market outlooks, those who adapt a more proactive approach to 'doing more with what we have' will come out of the current crisis as clear winners.

In spite of capital expenditure budgets axing many BI technology implementations, there is much that can be done to prepare the business for BI, and to gain significant operational and strategic improvement at the same time.

Business Intelligence is well recognised for its ability to optimize both the cost and revenue activities in an organization. What is less recognized is the power of BI as a process transformational tool.

By using a Business Intelligence driven design approach, enterprise transformation programs can dramatically increase their chances for attaining pre-defined business value.

This occurs at several levels:

1. BI ensures that all processes are directly linked to strategic objectives
2. Information embedded into processes ensures that intelligent, evidence based decisions are made
3. Alerts and automated decision making can significantly speed up a deliverable cycle
4. Processes monitoring and feedback via dashboards ensures a continuous improvement cycle is effective

This extends the value of BI far beyond the capability to extract, aggregate and analyze data.

Using BI to enable enterprise processes and other supporting technology can fundamentally change the way an enterprise responds to its organizational design challenges.

BI and the Enterprise

Most OD initiatives are driven by cost and revenue-optimization goals that support the recognition that to become leaner, more effective and more competitive, the organization must by defined by strategic value chains, rather than functional activity areas such as Finance, Marketing, Logistics, HR etc

With the massive volumes of data generated by companies today, integrating BI into Enterprise Resource Planning (ERP) and Enterprise Data Warehouse (EDW) technologies, enables this data can effectively release intelligence about the company's internal and external operations.

Building on the BI principle of ‘one version of the truth’, enterprises can meld BI with other corporate methodologies such as Balanced Scorecard and Six Sigma to provide a complete design, optimize and monitor framework.

BI-Driven Process Design

A BI-driven design approach supports enterprise goals of creating horizontal, standardized, streamlined and effective business processes.

This is achieved by:

1. Define Processes into Logical ‘Subject’ Activity Areas - identifying core master data; independent of organizational lines
2. Identify Vusiness Value Drivers – related directly to specific corporate objectives, and defining the KPI’s to measure success.
3. Create a Conceptual Model - that supports the business value drivers, using the key dimensions and master data elements.
4. Map High-level Requirements to the Dimensional Model – validated by gap analysis to ensure all aspects are addressed by the dimensional model. The dimensions provide the various 'views' of the data used by different activities - for example, sales, product development, customer support. This creates a matrix of data sets with activity areas.
5. Identify System Impacts – of the proposed model on current systems, to identify any required changes in configuration or capability in both technology and business processes. Such gaps naturally occur where required data is not created within the target transaction system or is created in inappropriate structures for BI. The result is a full BI-driven data model.
6. Identify Master Data Issues – commonly a spin off project to manage issues around Record of Origin (ROO) creation and definitions, such as how the master data is created within transactions impacts the business process.
7. Define Detailed Requirements – a logical data model that reflects the concept of connecting business processes with technology support. The resulting model reflects both strategic and operational components that define the optimal transformation success.

By focusing the business on subject areas, and the data that supports it, organizational barriers are made invisible, helping to mitigate the normal ‘territorial’ change management issues that commonly arise in OD transformation.

It also ensures that the organization is designed to meet its strategic objectives, and not driven by processes inherent in transaction systems.

By forcing the business to identify its unique Master Data, and the value it provides to many different areas of the business, boundaries between traditional functional areas are broken down and individuals become more aware of how the activities within their role sphere impact right across the organization. For many, this is highly motivational and often the first time they have had visibility of the value of their role within the entire scope of the enterprise.

Thus, the focus on building the enterprise Master data before any independent business transformation programs are initiated is absolutely critical to the overall success of such programs. The master data drives the architecture layer configuration, which in turn supports process transformation.

Governance

Establishing BI and Data Governance is absolutely essential to both the success of the transformation, but also to subsequent BI and technology enhancement.
Whilst the logic of this approach is more evident to IT than to the business, once the ‘light bulb’ moment occurs, the barriers between IT and the business are also weakened, and a solid bridge of collaboration can be fostered.

Now that the business has delivered key information into master activity areas, business users are better equipped to make fast decisions with a much higher success rate.
For many, this new evidence-based decision making is somewhat uncomfortable, in spite of studies confirming the high percentage of poor decision making based largely on the lack of current relevant information.

However, once the BI strategic framework is created, ongoing education helps to change the perspective around both the role BI plays in the transformation and in ongoing operational and strategic effectiveness.

This also helps to establish BI as more than just a media rich reporting solution.

Conclusion

Business Intelligence is a powerful framework for transforming businesses into more efficient, more effective and more competitive organizations.

Harnessing powerful business data to support processes and decision making, BI breaks down generations of barriers amongst organizational functions to focus the business on strategic value streams. This provides a dynamic and flexible framework that better equips the organization to respond to changes in the market place and ensures a more sustainable and highly competitive future.

The BI driven transformation dissolves many traditional change management challenges and is a powerful motivator towards self managing performance.

©Gail La Grouw. Learn more about how performance measures are used in The Logical Organization™ to build performance dashboards and scorecards and dramatically improve performance of your organization.

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