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The importance of a BI strategy and framework within an organisation

The importance of a BI strategy and framework within an organisation

Be strategic with your business intelligence, says Nelson Mandela University Business School research

If you are a decision-maker then new research from Nelson Mandela University’s Business School may help you to make the best use of business intelligence (BI).

Dr Sam February from Nelson Mandela University and Prof Hanlie Smuts from the University of Pretoria conducted the study, “A Business Intelligence Effectiveness Model: Enhancing organisations’ decision-making capability“.

Their research has identified elements that go towards the effective use of business intelligence, and the relationships between them.

“Organisations today generally use a technology-driven process to analyse data and this data gives actionable information that helps to shape business decision-making,” said Dr February.

“This process is referred to as BI and contributes towards revealing the position of an organisation in comparison to its competitors, market conditions, and future trends, as well as present demographic and economic information.”

However, said Dr February, to deliver value aligned with a business’s objectives and priorities, BI also should have well-executed methodology, processes, governance, and technology. If the portal, or tool, used to gather BI was not effectively doing this then the money and resources spent in this area would be wasted.

Prof Smuts and Dr February’s research therefore proposes a BI effectiveness model to enhance decision-making support – and key to this is to ensure decision makers receive the correct information at the right time in a usable format.

Their study followed a quantitative approach, sampling respondents within an organisation in the telecommunications sector. The results showed that the effectiveness of a BI department has a direct impact on an organisation’s decision-making capability.

One of the first steps in being effective is to identify the audience who will use the information to make decisions. For various reasons, however, said Dr February, BI departments often did not understand what decision-makers needed, which meant they were not as effective as they should be.

This meant that a company could make large investments with little or no benefits to the organisation.

The study highlighted three elements which had an impact on how effective a BI department is:

  • BI framework and strategy
  • Utilisation
  • Availability and usability

The study found that a clear relationship exists between all three. Moreover, the latter two: utilisation, and availability and usability, also further led to a more effective BI department.

The findings show that reliable and consistent supporting data alone is not enough, and that it is important to make sure that data is available in a usable format, and that it is actually used thereafter. If a firm addresses all three of these elements, the information it produces for decision-makers would be more effective.

Whether you labelled it as BI, data science, or management information systems reporting, every organisation could – and should – use BI processes, advised Dr February.

It drives the thought process of C-level executives, helping them with answers to key questions, empowering them to make informed decisions. It is therefore important to have a business intelligence strategy, or framework, so that its work could be tailored to their audience.

The starting point would be to have a clearly defined framework and strategy for the BI department.

And, as Dr February puts it, this should be geared towards: “providing the right information, at the right time, in the right format, to the right person”.

The research concludes that a BI effectiveness model should suggest focus areas for more effective information flow throughout the organisation. This would lead to improved information accessibility, improved decision-making and ultimately improved productivity.

By applying this BI effectiveness model, BI departments would be more effective in delivering decision-making support.

 

CLICK HERE  to view the full study:

A Business Intelligence Effectiveness Model: Enhancing organisations’ decision-making capability.