One of the biggest myths surrounding business intelligence is that only large enterprises can fully implement, use and gain value and competitive advantages from BI platforms and tools. In this excerpt from the book The Shortcut Guide to Achieving Business Intelligence in Midsize Companies, written by Don Jones, readers will learn about some other common BI myths. Jones also explains how midsize companies can reap the benefits of business intelligence.
Table of Contents:
* Looking at the benefits of business intelligence for midsize companies
* Myth: Midsize companies need specialized business intelligence skills
* Business intelligence cost concerns shouldn’t stop midsize companies
Chapter 3: Debunking the Top-Three Myths of Business Intelligence for Midsize Companies
There is definitely a pervasive belief that midsize companies simply can’t afford, can’t handle, or can’t appreciate business intelligence (BI). I even run into executives at midsize companies who absolutely believe that companies the size of theirs don’t need BI and can’t benefit from it. It simply isn’t true, and in this chapter, I’m going to play “Mythbusters” and address the most common misinformation regarding BI as it relates to these companies.
Before I do so, however, I want to get one of the most harmful pieces of misinformation out of the way, which is this: Midsize companies can’t benefit from BI. That’s patently false; it’s like saying that midsize companies can’t benefit from customer relationship management (CRM), accounting software, payroll software, or any other common business tool. Although it’s true that many of these technology solutions began in extremely large companies, the fact is that any company can run itself more effectively and efficiently when these tools are available. It’s also true that the CRM solutions (to take one tool as an example) used by giant enterprises are built differently than those used by midsize companies, but that doesn’t mean midsize companies don’t benefit from their particular versions.
In fact, that’s one of the common themes you’ll find in this chapter: Midsize companies can and do benefit from the same business tools and capabilities as giant enterprises; those tools are simply built specifically for the midsize market, and are often easier, less expensive, and faster to adopt and use than the ones designed for giant enterprises. On to the myths.
Myth 1: BI Can Be Disruptive
I find that there’s definitely a belief that BI can be disruptive to the business, or at least that the process of implementing BI can be disruptive. I’ve certainly worked with customers who have had dedicated project teams work for many, many months at bringing a BI project to light, and the entire process certainly was disruptive to the business in many ways. But those were gigantic companies, and many of the problems they dealt with were ones you’d only run into inside a really large enterprise. Let’s focus on some of the major aspects of the “disruptive” myth.
Specialized Tools and Training Required
One objection I hear from midsize companies is that they fear they’ll need to purchase expensive tools, and undergo extensive training, in order to begin planning and deploying a BI solution. It’s easy to see where this “myth” comes from—because I can confirm that it really does happen—inside huge enterprises.
But this is hardly true only with BI projects. Look at nearly any major, enterprise-wide project in a massive company and you’ll typically see the need for specialized tools, extensive training, and so on. How many major companies haven’t been through an exhausting implementation for accounting software? I remember when one past employer—a 22,000-employee telecommunications division—implemented new financial software and “specialized tools and training” was an understatement. Horror stories abound for CRM and Enterprise Resource Planning (ERP) solutions, as well, and I’ve seen those projects (in one case I got roped into one). There was a ton of specialized tools and training floating around. But again, that was in a very large company.
Here’s why: Large companies tend to be extremely diversified. They have a lot of things going on, and they have departments and divisions that operate almost as autonomous businesses. Simply figuring out what an accounting system needs to look like or how a CRM solution needs to work requires some very specialized experience. BI is probably an extreme example of this: A truly enterprise-wide BI system wants to touch every piece of data the company has so that all that data can play a role in dashboards, reporting, analysis, “what if” scenarios, and so on. Figuring out where all that data lives, who owns it, how it works, and how it will be loaded into a data mart or data warehouse are complicated tasks. The tools used to design the resulting data warehouse are complicated and can be expensive; the tools used to gather information and requirements are equally specialized. But that’s in a very large company.
So if “specialized tools and training” are a truth for large enterprises, why are things any different for a midsize company? I don’t want to come across as suggesting that midsize companies are somehow more generic than larger enterprises, because that isn’t true. But the fact is that most midsize companies do operate by a more common set of rules and practices than large companies do. That isn’t a downside of being a midsize company; it’s a benefit that most large enterprises often wish they still had. Bear with me for a moment while I explain.
Start by considering payroll. Most midsize companies have fairly basic and common payroll needs: You pay employees, you keep track of paid time off, you account for tax withholdings, and you likely extract some money for benefits. No matter what line of business you’re in, payroll tends to look the same—so much so that midsize companies often outsource their payroll entirely or use off-the-shelf software packages that all work the same way. Midsize companies don’t often have a massive cadre of HR folks, and so those companies tend to keep their payroll within the realm that can be handled by outsourced companies or by off-the-shelf payroll packages. When you get to be a huge company, however, and you build up a huge HR department, it starts to be easier to do different things with payroll, and so payroll becomes almost a side business within the enterprise—specialized to the enterprise’s needs.
What about accounting? Midsize companies tend to follow Generally Acceptable Accounting Practices (GAAP), and there are numerous off-the-shelf software packages that provide perfectly acceptable accounting capabilities. Midsize companies do accounting because they have to, not because they especially enjoy it; therefore, they tend to keep their accounting practices within the domain that an off-the-shelf (or lightly customized) accounting package can handle. Sure, midsize companies could start doing complicated things with accounting, and they’d save some money—but they wouldn’t save enough to make it worth the extra complication. Large companies, however, can see bigger savings from more complicated and detailed accounting practices, and so those large companies invest in specialized software, specialized processes, and so on.
This same trend continues through just about every business tool: Midsize companies could have the same level of complexity as a giant business, but there’s not a huge return in doing so. Therefore, midsize companies tend to have back-end systems that all look and work in a very similar way. Those systems, to a degree, drive (or at least influence) the company’s business processes and workflows, meaning that most midsize companies look—from a back-end perspective—if not identical, then at least very similar. There’s an important truth here that I want to emphasize: Midsize companies often steer clear of very customized tools and processes because those customizations add complexity that are not justified—to a midsize company—in terms of their added value.
So how does this affect BI implementations in a midsize company? The reason a massive enterprise needs specialized BI tools, skills, and training is because every single massive enterprise looks entirely different from the others. They’ve all adopted their own customized accounting, payroll, ERP, CRM, and other practices. Designing a BI infrastructure that utilizes all those data sources will, obviously, be a customized undertaking and will require specialized skills, tools, and training.
A BI solution designed specifically for midsize companies still requires specialized tools and training, but because midsize companies look so similar on the back-end, those specialized tools and training come into play once, when the BI solution is initially created by its vendor. After that, the same pre-made BI solution will—with perhaps some light customization—be suitable for most midsize companies simply because most midsize companies are using the business practices and patterns that were taken as assumptions when the BI solution was created in the first place. In other words, a midsize company can do without the specialized tools and training simply because a midsize company will tend to steer clear of the customizations that make the tools and training necessary for an individual BI deployment.
This is an important concept for debunking many of the BI myths in this chapter, so I appreciate you bearing with me through this explanation. Let me try and wrap it up with a non-business analogy, just to make sure I’ve made this important point.
Consider a NASCAR car. That car requires some expensive, specialized tools, and its driver requires extensive, specialized training. Why? Those tools and training can bring the hundredths-of-a-second advantage that means a win. Most normal drivers—like you and me—don’t need a hundredths-of-a-second advantage, so we make do with cars that don’t need highly-specialized tools. That means we can very feasibly purchase and own a car without having any specialized tools or training. The cars we buy are designed to work in a standardized fashion, even though the cars available to us vary widely in specific features and capabilities.
That’s basically why midsize companies don’t need specialized tools and training to do a BI implementation: Pre-packaged solutions that are designed for the way most midsize companies already work have the specialized tools and training built right in.
Long Implementation Times
I was on a BI project in a 40,000-employee company that took 2 years to complete. No kidding. We spent the first 9 months on requirements gathering, something like 3 months designing reports and data warehouses and such, and a year on the actual production implementation and the inevitable, “oh, can it also do this?” requests from the system’s users. Why so long? Well, it was a huge company. Data was everywhere, and we had to reverse-engineer how the company worked in order to build an effective data warehouse. That’s kind of a worst-case example, but it serves to illustrate the point that BI can take a very long time. In big companies.
I won’t belabor the point I made in the previous section any further, except to say that because most midsize companies use similar back-end tools and processes, it doesn’t have to take nearly as long to implement a usable, effective BI solution in those companies. Sure, this still isn’t a case where you double-click Setup and are done—but it’s closer to that than the implementation that giant companies undertake.
In many cases, prepackaged midsize BI solutions are “all in one” packages. You install a single piece of software and you get a place for a data warehouse, Web server, data-loading components, in-memory analytics, reporting, dashboarding, and everything else a BI system needs. You just point it at your existing business data and let it go to work. I’ve seen implementation times of a few weeks or so, using the existing IT staff. Some companies might be able to get a BI solution up and running in even less time, especially if the solution is initially only addressing a single division or department within the company, simply because that means fewer data connections that have to be made.
Impact on Other Business Processes
I think the first two pieces of this myth pretty much handle this third one. If midsize companies can implement a prepackaged BI solution in a few weeks, using their existing IT staff, and without having to offer extensive training to half the company employees, well, then the BI implementation isn’t going to be very disruptive.
Most of the “disruption” in a large-scale BI deployment comes from the discovery and requirements-gathering phases, where BI project team members invade every corner of the company trying to figure out what data lives where, how everything fits together, and so on. The IT staff gets distracted with new hardware, complicated new software, complex data connections, and so forth. With a prepackaged BI solution, there’s simply no opportunity for any of that to occur: You don’t have a months-long discovery and requirements-gathering phase, and the IT staff is usually dealing with a single, simpler piece of integrated software that’s much more within the scope of what they’re used to dealing with.
More on the benefits of business intelligence for midsize companies:
- Continue to the next section: Myth: Midsize companies need specialized business intelligence skills
- Download a free PDF of this chapter: The Shortcut Guide to Achieving Business Intelligence in Midsize Companies
- To purchase the book or similar titles, visit the Realtime Nexus website
- Read other excerpts from business intelligence books in our Chapter Download Library