Image: Tim Marshall
Most businesses collect an ocean of data these days, and it’s easy to drown in it. For a lot of executives, once you’ve got a few million data points, you realize that you may as well have none, because you still feel like you don’t know how to respond to it all. "Business Intelligence" (BI) systems are supposed to help. But there's a lot of confusion about exactly what BI can and can't do.
It would be amazing if some app could take your historical data and give you clear instructions for managing the future. So amazing, in fact, that a lot of executives end up buying BI software because that's what they're hoping for. But they're missing something critical.
What BI actually does is pull together structured and unstructured data, from practically any source, to put it into charts. "Charts" is almost a misnomer for what some of these applications can produce – "visualization" is a better word. You can see the computing power behind these visualizations. They can be enormously powerful, beautiful even, but one of the real problems executives face when trying to harness that power is figuring out what to look at in the first place.
BI software can't come up with the chart for you. Even with the best BI systems available, you still have to come up with what to visualize. When you can incorporate any data from any of your systems, figuring that out can be a formidable challenge. On the floor you’ve got your ERP system tracking throughput. In your sales department you’ve got your CRM system. Marketing has a COS system packed with data. Even Human Resources has its HRIS system. The list goes on. You want to break down those silos. You want actionable insights.
So where do you start? This is so difficult that one of the largest players in the BI market actually asks its users to explain to its other users what data they should chart and how to interpret it. Since BI can only visualize existing data, and you want a plan of action, you want to make sure your baseline is compelling so your trendlines are meaningful. But it's important to remember that all BI can do is calculate trend lines. Even if it does it in three dimensions and with a colorful animation, it's still a projection based upon assumptions.
Sometimes the visualization can give you a clear insight into a process that you can use to change your plans for the future. But most of the time, that's not the case. This can be frustrating – especially when the expense of many BI systems is taken into consideration. Executives expect (and some BI companies lead them to believe) that powerful visualizations will, unto themselves, produce a return through greater efficiency. The hope is that a visualization will unlock some unseen relationship between one process and another outcome, which will become an opportunity to earn a return on the software.
BI accomplishes none of this on its own. You had to come up with a meaningful visualization. You had to understand its implications. You had to find a way to earn a return off of it. So if an executive gets BI software to better prepare for the future, they will soon discover that visualizing data isn’t the whole solution. It's certainly helpful. But really, “business intelligence” requires “intelligence,” and intelligence still comes from people.
More than one player in the BI market calls themselves a "business operating system." They want to give the impression that their powerful visualizations will put you in a position of control, where you'll be able to see everything that's going on and direct it confidently.
Creative visualizations can help, so long as you remember that the data you're visualizing represents the real-life efforts of real-world people who care about your company. Every data point in every visualization represents the efforts of your employees. This is where the promise of BI comes down to earth. An "operating system" manipulating only data may miss the human element that created the data in the first place.
Which brings us to the critical factor that many executives miss when considering BI software. If executives collaborated with the people who created the data they're trying to visualize, it's far more likely that they will come up with visualizations that are truly meaningful – and actionable. The key to earning a return on your BI software might be the people whose future you're trying to manage.