Business intelligence – crap data for the masses

Tuesday, August 14th, 2018

One of my clients has been approached by an old colleague who now sells software. Specifically, BI or business intelligence software.

It seems to be one of a raft of products aimed at SMEs and purported to help managers make sense of data. The salespeople (or avatars) usually refer to this as “big data”, whether it is or not. They do this while demonstrating lots of brightly-coloured graphs, each of which can be rotated, sliced and diced, drilled into, overlaid, reformatted…a salesperson’s dream. The business owner watches with glazed eyes – here, surely, is a cure to all those productivity problems and quality problems and control problems.

It is of course much simpler nowadays to find, extract, link and manipulate data from an organisations’s computer systems. Most cloud-based systems will have an application programming interface (API) that allows data to be extracted. Even clunky old systems like Sage (still used by many small businesses) have this sort of facility. However, there are one or two medium-sized elephants in this particular room.

  • Most source data will be really poor quality. Not only will the business owner face a significant task to clean it up, they will have to fix the processes that create the data to stop it going bad again. This is a good and valuable thing to do, but a non-trivial change that should take place in the context of changing the way the business is managed;
  • Most business owners don’t have a clear idea about what they should be measuring. Without a small number of simple key performance indicators (KPIs) that tell management exactly how the business is, and will be, performing, automatic report generation and sophisticated what-if analysis will at best waste everyone’s time and at worst lead to bad decisions. Management time would be much better spent thinking through what KPIs are required and finding some simple way of using these to run the business;
  • Most business owners don’t create a business case for introducing a new system and so don’t drive business change and benefit once the system is in.

Simply implementing a BI system on top of this situation leads to the sort of conversations I have with some clients.  When they proudly show me the output from the system (graphs usually – some numbers if you are lucky) I usually ask a couple of questions:

  • “Where does this line (or row of numbers) come from?”
  • “What does this line (or row of numbers) tell you?”
  • “What action are you planning to take as a result of this line (or row of numbers)?”

Depressingly often the answer is along the lines of “Ummm – actually, I’m not really sure.”

Now don’t imagine I’m against technology or data in business – I’m not.  I believe that to thrive businesses will increasingly have to be really good at using both.  I’m just against hard-pressed business owners being seduced into applying some glossy but inappropriate technology instead of doing some hard thinking.  That kind of sloppiness used to be restricted to corporates and governments but is now available to all.

If you would like to learn more about using KPIs to improve your business then you should register for our next event.

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