My post a couple days ago on Business Intelligence got the ire of people in the technology world. Most wanted to tell me how wrong I was about what Business Intelligence (BI) was about. However, the definition of BI must be fuzzy to these folks too . . . the answers I received were all different.
Information is not knowledge let’s not confuse the two. – W. Edwards Deming
I reject the purported fact some used to say that BI was about making better decisions. Data may tell me how many, but tells us nothing about “why” or even give us context around how many.
Case in point: If I ask how many units I sold in the last year, I might conclude (wrongly) from data that this is representative. What if I was out of stock for 6 months? Would I miss demand that was there, but I failed to see?
Other objectors pointed to how BI ties multiple data warehouses together or keeps IT out of the loop of “getting data.” But is that really intelligence of any kind?
One person told me that management was hungry for more data . . . and BI vendors are ready to take their money. We already have way too much information and with it not necessarily the right information to make better decisions.
One BI defender wrote this:
Like it or not, the business world revolves around numbers. And businesses, rightly, set targets around the numbers they want to achieve. Without data, businesses would be unable to measure performance against targets, judge success of strategies, and implement corrective action. – From the BI Journal Blog
They rightly set targets? He obviously hasn’t learned about systems thinking and that targets become the defacto purpose of managers and workers when they should be serving customer purpose.
Further performance against targets is dictated by the system in place. The work design, structure, technology, management, measures, etc. If an organization is operating at a certain level it will continue to unless the system changes and that should be managers focus – improving the design and management of work. More data is just keeping score (at best).
You see, a lot of the BI techeads (those that use technology to solve every problem) have bought into the command and control mindset that decision-making should be separated from the work and that targets improve performance. The reality is neither of these work very well (for other elements see command and control vs. systems thinking).
A better way to achieve better decisions is to go to the work and get knowledge and first determine what the customer purpose is (i.e., what matters to customers). Armed with knowledge of customer purpose we can derive customer measures.
These customer measures I have found are always (so far) different from what organizations think is important like costs and productivity. Once an organization has customer measures that matter costs and productivity take care of themselves as they experiment with method and innovate.
BI does not lead to innovation, experimentation with method leads to innovation and this needs to be done with knowledge and with the work. BI is becoming more of a distraction to getting on with business improvement.
So my BI friends, I stand by the fact that data needs context and alone does not help make better decisions.
Leave me a comment. . . share your opinion! Click on comments below.
Make the new decade a profitable and rewarding one, start a new path here. Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at firstname.lastname@example.org. Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.Share This: