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Articles: business intelligence

Understanding Business Intelligence
Author: Mark Davis

In your article, 'Using business intelligence for competitive advantage' you mentioned the Japanese are masters of business intelligence. (1) Can you elaborate on this, and (1a) the history of early business intelligence in Australia?

(1) While studying my Master of Science at Bond University in the early 90s it was difficult to get business intelligence consulting work in Australia. However, my very first client was a multi-national Japanese company based in Melbourne. They were very interested in how BI could identify and improve their market share. Entry price into Australia from Japan was an expensive exercise so they needed business intelligence to provide that competitive edge. Understanding market share goes a long way to achieving competitive advantage. In particular, the ability to be highly competitive can be found in the public domain data sphere. For instance, by re engineering or breaking a product down into single components can help establish market share. Some components may be imported leaving a trace overtime and time to market can equal market share.

(1a) I would like to think that the start of my studies into business intelligence in the early 90s and my efforts to create a market awareness was probably the first formal introduction of BI in Australia. Competitor Intelligence was certainly in the market place more than 15 years ago. CI unfortunately represented only a part of the puzzle and dramatically restricted consultants work opportunities in Australia. Many businesses selling CI changed mid stream and shifted to BI but included a CI program. Business intelligence takes care of the whole business, especially risk mitigation etc, where CI obviously looks at only one aspect.

2. Is business intelligence widely understood in Australia?

For many years, say from 1990 to 1998 No. It may be improving through further and extended studies. Different messages have been distributed through major marketing programs by large IT companies re-badging software and philosophies to keep on top of trend management. However, the hype had a positive effect by providing the profile and drive for the curious to research the concept more thoroughly. The outcomes of my studies in the 90s indicated that the CEOs in Europe, America, Asia and Australia did have an understanding or an awareness of business intelligence, although Australian leaders fell well short of their counterparts with only a quarter of a holistic view of business intelligence.

3. What techniques or tools are used to collect the data?

The regime of data management for business intelligence is a complex one. It should be remembered that data reliability is the outcome of data management, and that data reliability is not the commodity but the result. Many exceptional tools were distributed to the commerce from the 'cold war' and in some form today are still around but embedded in off the shelf products and widely used. A former Prime Minister in this country was renown for being able to 'top the press' on most occasions. He was using this type of capture software that delivered data before the tabloids hit the pavement. The process for collection is the engine room for success and there are no easy answers. This is the business solution- a process that is dependent on the core drivers of the business. This area is well covered in my business intelligence paper on the knowledgepoint web site.

4. How significant is it that the intelligence is communicated to the right people? (4a) How does an organization facilitate this?

(4) We are now into the third wave - knowledge. Knowledge transfer driven by communities of practice is the current business ideology. Again, if the work has been done in the engine room it will be easy to understand what business information needs to be delivered and too whom. Initially the KPIs will be key along with other efficiencies to correct and improve the bottom-line. The bottom-line in Australia is the ultimate driver and on occasions innovation such as business intelligence has suffered. Fundamentally the size, population, culture and expected revenue from market segments in Australia drive this. Therefore it is highly probable that a program for business intelligence in Australia will have a few short cuts. (4a) By understanding knowledge creation, transfer and use layered with key drivers, and positioned in communities of practice, results will be achieved and acknowledged on a regular basis. There are a number of push/pull technologies available and the selection will be guided by needs versus revenue.

5. The role of technology/software in business intelligence?

Absolutely. As long as the people leading business intelligence programs understand that technology/software is an enabler. As an example, if we work backwards on this one; dissemination of the right data to the right people is paramount, prior we need to analyse, before that collect and before that again to understand our direction. Direction is the core business driver and needs to be managed as a project, which basically has very little to do with technology. However, analysis and dissemination does require an enabler. There are many software products available to achieve a successful outcome. Again, it will be dependent on the challenge at hand. For instance, to understand company structures it may be necessary to analyse, link and chart over one thousand entities and relationships very quickly, a commercial program exists that does this. Data visualization is a very potent process within the analysis phase.

Mark Davis is in his final year of PhD studies at Royal Melbourne Institute of Technology, Australia (http://www.bf.rmit.edu.au/bit/html/mark_davis.html) and is researching Knowledge Management and Intellectual Capital Management. He is also studying a Master Of Commercial Law (Deakin). Mark is a Master of Science (Bond University, Australia) and researched Business Intelligence. He also has a Postgraduate in Business Administration (ACU) and a Diploma of Project Management (AIPM). For the last 15 years he has consulted internationally in South Africa, Asia, United Kingdom and Europe for government (e.g. Australian, South African and Portuguese) and the private sector (Coles Myer Limited and the Olympic Games Knowledge Service etc).