BI projects are amazing – complex, creative, and typically accompanied by a big-budget. Personally, I love them. I find it rewarding to dig into data and interpret it to show executives what’s really going on in their business. It allows us to have valuable conversations about their business strategy, how well it is being met, and whether a small pivot could create a big impact. That said, I often see five issues with the typical approach to BI projects.
1. It creates more information than we can absorb. When we are presented with more information than our minds can grasp, we instinctively disregard most of it during the decision process. This is something our brains do automatically, trying to help us make sense of the world around this. Unfortunately, this means that the real value of your BI project is often buried in data that is not analysed.
2. It does not create actions. BI projects increase the amount of data available, but it takes a human to draw actionable insights from it. One of the most valuable assets a business can have is an analytical expert who can advise business actions that are backed by data.
3. BI is not real-time. We live in a world that is constantly changing, and it is important that your data reflects that. I often advise executives who are solely reliant on historical data, which does not provide enough insight to make real-time decisions. One of the most challenging aspects for a BI project is the ability to use real-time data to capture trends, changes in client preferences, and other dynamic elements to predict shifts and act more quickly than your competitors.
4. It looks at the past. Understanding historical trends is important. I’m sure you’ve heard the aphorism, “history repeats itself”. However, as mentioned above, it is important for a BI project to go beyond looking backward. The true value of a data project is to harness information that allows you to analyse, predict, and act in ways that improve your future business.
5. It costs a lot. A BI project costs more than its software. Budget needs to be set aside to prepare the data and keep it updated. Before investing in a BI project, consider the P&L you want to achieve and consider how BI can help you meet that goal.
BI is crucial, of course. However, it is just the beginning of the digital transformation journey and, sometimes, it is not the answer at all.
Good luck in your data project!
Pablo Morales, CEO of London Analytics