Business Drivers

Without strong business drivers and without an alignment with the strategic business goals of the organization, the BI decision-support initiative may falter. For example, let us assume that the organization wants to increase revenue by decreasing time to market. This translates into building BI applications as fast as possible, no matter what other effects this might have (for example, as speed goes up, quality goes down). Further, let us assume that the BI application objective is to decrease operating costs by increasing productivity. This leads to building BI applications that deliver business process improvements no matter what it takes (for example, as quality goes up, speed goes down). In this example, the organization's strategic goal and the BI application objective are both worthy business drivers for building a BI solution. However, because the strategic goal and the BI application objective are not compatible in terms of speed and quality issues, it will be difficult to get management's support for this BI application.

This example illustrates the importance of understanding the organization's strategic business goals as well as the IT strategic plan and ensuring that the BI application objectives support both. This may be more difficult to do than it appears. Even some of the most sophisticated organizations often do not have easily accessible or well- articulated strategic business goals statements. Become a "detective" and review the organization's annual report, public statements, newspaper coverage, syndicated articles, and internal memos for valuable information.

Substantiate your business justification. Do not invent a business case where one does not exist just to get the BI project approved. Interview senior managers to confirm the organization's strategic goals, and interview business managers and business analysts to validate the BI application objectives.

Let us discuss an example of a valid business justification. An automobile manufacturer was rated near the bottom of a study on customer satisfaction and product quality. This hurt the manufacturer in two ways.

1. The warranty costs were much higher than those of an average automobile manufacturer. These measurable costs were directly impacting the organization's bottom line.

2. Unsatisfied customers spread the word about the manufacturer: "I'll never buy another car from that company ”and I'll tell all my friends ." The costs of damaged customer confidence and lost sales were immense but much more difficult to measure than the costs of warranty.

In this example, the strategic business goals were to retain the customers and to reduce the expenses on warranty costs. In order to achieve these two goals the automobile manufacturer had to be able to communicate the information about malfunctioning parts to the parts makers on a timely basis. If a parts maker did not improve the quality of a part, the automobile manufacturer would have to buy that part from a different parts maker. The automobile manufacturer also needed information about the customers who were returning the malfunctioning cars in order to contact them for "damage control."

This automobile manufacturer justified building a BI application to measure manufacturing quality and to relate the quality measures to loss of sales, customer complaints, and customer defection. Quality measures were to be captured at the time of assembly as well as from the warranty data. Since a major portion of overall product quality is based on the quality of the parts that go into the automobile, the quality measures were to be provided to the parts makers through secure Web access. By giving the parts makers this information, the automobile manufacturer believed the parts makers would be able to improve the quality of their parts, which, in turn , would improve the overall quality of the assembled automobile. In this case, the BI application objectives directly supported the strategic business goals.

Business justification is an iterative process. As difficult as it might be to justify the business case, realize that business managers are aware of the buzz about BI and would like to take advantage of any competitive benefit they can get. Reiterating the benefits will help crystallize the business justification and make everyone feel comfortable about funding the BI decision-support project.

Once the strategic business goals and BI application objectives are verified and matched, you can define the business analysis requirements for the BI application that will allow the organization to meet its strategic business goals.