How to Implement a Successful BI Strategy
Whatever size your business, having a successful business intelligence strategy is important. Business intelligence (BI) can include a wide variety of data, but basically it is a set of processes or methodologies that take data and turn it into meaningful information. This information allows a business owner to make more effective strategic and operational decisions.
To be its most effective, BI data should include information from the business marketplace, or external data, as well as internal data such as financial or operations information. Examples include external info like the pricing information of competitors, or internal information like ROI or customer support costs.
The ability to collect valuable information and react to it properly is at the heart of business intelligence. Collecting and combining information can make it more valuable than any one source of information looked at in isolation.
BI data can help a business look at new markets, new products, or reduce support costs, for example. It doesn’t have to be “big data” like that gathered in a customer management system. It can be small data like customer comments provided by email.
But like any aspect of your business, it needs to be aligned with your business goals. The collection and analysis can’t be done in a haphazard manner, and it isn’t simply about finding a BI solution. Its planning and implementation needs to be strategic, providing you with a roadmap, to ensure you get the right information and can understand and use it.
Now that we understand BI, let’s look at how to implement a successful business intelligence strategy.
Build a BI Team
The size and makeup of your team will vary depending on the size and type of your business, but it’s important to have a cross-functional team to determine your BI strategy and implement the program. BI is not an IT responsibility, although they need to be at the table. Here’s who else has to be there:
1. An Executive Sponsor
A high-level decision-maker has to sponsor your initiative, for a variety of reasons, most importantly that it shows the entire organization the importance of the BI strategy.
Like any successful project, your BI initiative needs an Executive sponsor:
- To ensure support at the Executive table;
- To remove roadblocks;
- To be a visible and vocal champion of the project, and;
- To arrange for the financial and human resources to ensure the success of the initiative.
Which Executive officer should be chosen is again dependent on your business. It could be the chief information officer, or the chief financial officer, or another officer with bottom-line responsibility for the project.
But whichever Executive is chosen, he or she needs to understand the organization’s broad strategy and goals, and be able to translate that mission into Key Performance Indicators (KPIs). They also need to be able to communicate effectively at the Executive table and with the project team.
2. Cross-Functional Representation
While IT needs to be part of the team, there is also a need for members across the organization. That includes strategic (such as the Executive sponsor), tactical (those who will implement the solution or gather the data) and operational (those who will need to understand and use the data). Stakeholders from across the organization need to be involved from the beginning.
Having cross-representation also ensures that human and financial resources are dedicated from across the organization, and not just from the IT budget.
3. Business Owners Who Use the Data
By this, we mean those who are on the ground, who know what information will support their work, and how to use that data to make improvements. Knowing what information is needed, who will use it, and how often it needs to be gathered, will support your decision-making throughout the project.
An example is salespeople, who will understand what customers need and what information will support decision around pricing, marketing and other sales-focused areas of the business.
Examine the Current State of Data
Once the team is in place, take a look at your current data sources and determine which will be useful for your BI strategy. Just because you’re embarking on a BI plan doesn’t mean all your current data isn’t useful. Perhaps it just hasn’t been shared across the organization, for instance, and can form part of your new BI dashboard.
As part of this, take a look at how the data is stored and shared. It may be necessary to look at new storage options or reporting requirements.
It’s also important to carefully define data sources and what they mean, so that everyone has a shared understanding. For instance, do the different areas of the organization have a shared definition for “profit margin”? While it may seem like that should be true, it may not be, and shared understanding of the terminology is important.
Define Important KPIs
Now that you know the current state of your BI data, the imperative KPIs need to be determined. KPIs are the heart of your BI strategy, and will show how well your business is meeting its objectives. The KPIs must be aligned to the business goals.
Here are some examples of KPIs:
- Sales revenue
- Landing page conversion rate
- Organic traffic
- Cost per lead
- Traffic-to-lead ratio (also known as new contact rate)
- Customer value
- Inbound marketing return on investment
- Social media traffic
Important KPIs will vary based on the nature of your business and your business goals. There doesn’t need to be a long laundry list of KPIs. Start with a few important ones as they can always be modified, changed or added to later.
Select and Implement a Solution
While some may think this is the most important part of a BI program, the previous work needs to be done before this step. The solution must fit with the strategy, not the other way around.
Solutions now are not cumbersome, and can provide access to your data in almost real-time. Building dashboards and providing reports can be done much simpler than in the past.
Implement in Phases
As the project is proceeding, consider implementing in phases. Start with just a few KPIs, prepare dashboards for sharing, and gather feedback from the users of the information.
There are a few factors to consider when selecting which phases to begin with:
- Select and phase-in by business area.
- Select the business area that will benefit most from being the first out of the gate.
- Select the area that is most likely to use the information immediately.
- Select the area that is most likely to adopt the new reporting tool and be most open to the change that comes with the new information (they can be champions with the rest of the organization).
- Select the area that’s the least complex, and leave the most complex area to the end.
A phased approach will allow you to make adjustments, but will also support users from a change management perspective. Not everyone will be on board with having to analyze and use information, particularly if it’s new information. Using effective change management such as information, training and feedback sessions will help bring users along in a positive way.
Utilize the Information
The true value of your BI strategy lies in using the information to make effective decisions and drive growth of your business.
For instance, you can analyze promotional campaign outcomes and use the data to prioritize future campaigns, such as a social media campaign, or to tailor promotions based on what’s worked.
Or, examining customer feedback may help you make decisions on product improvement, which in turn increases sales and reduces support costs.
Using the data to make informed decisions will increase ROI for your business.
Adjust and Adapt
Once you’ve completed the implementation of your BI strategy, your work isn’t done. That means continually revising as needed, whether that’s the data collected, the reports, or the processes of your business based on the data.
Businesses of all sizes and types can benefit from an effective BI strategy. Implementing a BI program that aligns with your business objectives will provide you with the information you need to make effective decisions.
Whether you run a restaurant chain, an online shoe store or a multi-city clothing operation, BI can and will enhance your decision-making ability and allow you to make changes that positively impact your bottom line.
About the author: Danielle Canstello is a member of the content marketing team at Pyramid Analytics, a provider of enterprise analytics. In her spare time, Danielle writes around the Web to spread her knowledge of the marketing, business intelligence, and analytics industries.