Does Business Intelligence (BI) really make a difference?

The practice of Business Intelligence (BI) has certainly stood the test of time. It’s history traces back to pre-technology era. In his 1865 work, “Cyclopedia of Commercial and Business Anecdotes”, Richard Miller Devens, actually uses the phrase “Business Intelligence” to describe activity that is very akin to what we know of as BI today. In particular, he noted that a banker, Sir Henry Furnese, beat competition by gathering and analyzing information at his disposal . Clearly, the idea of BI goes far back and is still going strong.

What Sir Henry recognized all those years ago is that there is “intelligence” in empirical data that can be used to out-perform organizations that were just using their leaders’ experience in decision making. This ushered in the scientific method to business (to an extent). Today, there is no question that this is true.

In a recent report published by Capgemini Research Institute titled: “Data Powered Enterprise”, the key takeaway was clear — Organizations classified as “Data Masters” outperformed their peers in the industry (Shown in the figure below)

“Data Masters” were those organizations that had a mature data and BI landscape. The research institute uses characteristics like advanced reporting, robust master data, good collaboration between business and IT, and democratization of data to define data maturity of organizations.

It is no wonder that BI is a multi-billion dollar industry that has many players, as is evident in the magic quadrant published by Gartner in February 2021 (shown in the figure below).

At this point, it is important to note that BI industry here generally refers to the tools that enable data visualization, which ultimately leads to decision making. But there are plenty of other technologies that enable BI. From data warehousing to Analytics engineering etc. Of course , the market is much bigger if you include these. Some of the vendors you see in the Gartner quadrant do play a role in the enabling space as well.

Over time the practice of BI has evolved and even though it has become a crowded space with many tools, there are general patterns that these tools try to address and differentiate themselves. We will delve into these patterns and the myriad tools in subsequent articles.

So, it seems to be a clear verdict — BI does make a difference.

1. It has stood the test of time.
2. organizations with mature BI programs translate it to better financial performance.
3. There are many vendors vying for the multi-billion dollar market.

Ok, it makes a difference but, can it continue to grow? What are some of the challenges?

There were plenty of other takeaways as well in the Capgemini report. A case in point — In the figure below, we can see that many business executives really do not trust the data they are seeing even though many technology executives providing the data think they do.

Trust and the related data quality is a big issue that impedes data based decision making. The chart below is further evidence of this.

Alignment of data and business strategy also seems to be a challenge.

There seems to be one common thread in all the charts, business executives do not agree with the technology executives’ optimism. Clearly, alignment has to be established through better collaboration.

In conclusion, organizational decision making is a collective task and consensus building is critical. Future BI tools should enable this, to be more successful, and there is some evidence that there are tools in the ecosystem that are trying to address just that.