Aligning Strategy, Business Intelligence and Analytics

Today, business intelligence and analytics tools are playing a critical role in transforming the way organizations gather, store, analyze and interpret data for strategic business decision making. In this information age we are now living in, managers need to start viewing information as an important strategic resource that if used intelligently will improve the company’s performance and competitive advantage. The volume, variety, velocity and veracity of data affecting the organization’s operations and bottom line continues to increase on daily basis and not all of this data is relevant for strategic decision making. Managers must therefore be able to separate the clean from the dirt if they are to successfully execute on their strategies.

Basing decisions on a wrong set of information is a sure recipe for failure. On the contrary, when the business possesses relevant facts and knows how to use them, improved product innovation, customer relations and operational excellence will be achieved. Fully knowing and understanding full potential inherent in business intelligence and analytic tools is the starting point for those companies that strive to repair the broken link between business analytics and strategy. Investments in business intelligence and analytic tools if not well researched and planned for can actually cost the company financially, time, resources etc.

Not all business intelligence and analytics tools are the same for all organizations. It is therefore important that prior investing in any tool, concrete research, assessment and evaluation of tools out there is done. Having chosen your system to aid strategic decision making and build your data warehouse, the idea is not going out there gathering each and every piece of data that you come across and chuck it in your data warehouse. As I have said above, not all data is important. Remember data collection and storage can be a very costly and time-consuming exercise. What must you do then to ensure you’re not wasting your time and other resources on non-essential data? As a manager, you must first establish your company’s competitive parameters within its operating markets and doing so will then help you decide which information to focus on.

To successfully execute your company’s strategies, your strategy should be based on information. In other words, information should be used to as a strategic resource to determine your company strategy. This means business analytics supporting strategy not only at the functional level but also at the strategic level. In some organizations, business analytics supports strategy performance only at the functional level, monitoring the individual function’s achievement of targets. There is nothing wrong with this. The problem arises when there is no feedback to the strategic level. It is therefore important to define targets based on the company’s strategy and the process is made easier if the managers have access to relevant facts that can be used to determine the kind of information relevant for the strategy development and monitoring of performance.

In organizations where business analytics tools give feedback to the strategic level and information is used as a strategic resource, if one department learns to improve its processes through the use of information, the strategy team receives the news and spreads the message throughout the organization as best practices. Use of information should both be a bottom-up and top-down process. For example, information should flow down from the top via strategy maps and back up via scorecards and business performance management solutions. When there is this flow of information up and down, deviations from targets can be measured and analysed and in turn the strategy is adapted and changed to accommodate changes in the market and within the organization itself.

Dialogue between the strategy and business analytics functions is therefore highly encouraged. When there is dialogue, there is improved coordination of efforts which can lead to the identification of the organization’s critical success factors, development of KPIs and the definition of who is responsible for the various KPIs. Repairing the broken link between business analytics and strategy and in turn linking business analytics and strategy can help provide information about which products create the business’s income over its entire lifetime and information about relevant product attributes to develop for the different customer segments. Furthermore, investing in business intelligence and analytics and using information as a strategic resource can also provide management with the relevant information and knowledge about which business processes to strengthen and develop in relation to the company’s strategy and competitor’s strengths and activities.

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