How to Implement a Successful Business Intelligence Strategy
Having the right business intelligence can be the difference in growth or stagnation.
An effective BI strategy can help your business: Remain competitive; Continuously improve; Increase profits; Grow or expand.
But having a BI strategy isn’t just about having the right technology or gathering big data.
It is about having an effective strategy. That means planning, gaining support, executing, reviewing and revising if necessary. It can even require some great Notion templates.
Let’s look at what that means for you and your business.
Why You Need Business Intelligence
What could be considered the first use of the term “business intelligence” was used in a document in the 1800s. It described banker Sir Henry Furnese, who gathered information and acted upon that information to increase his profits.
Now, BI is a system of strategies and technologies that gather and analyze data to provide historical, current and predictive views of business and its operation.
BI can comprise a wide range of data gathering and analysis, including the analysis of structured and unstructured data. This information helps to identify business opportunities and enhancements, providing business with a competitive market advantage.
BI is also most effective when it combines internal data, like financial information, and external data, like market information.
By combining different data and sources of information, businesses can get insight into possible new products, new markets, and analyze marketing efforts, to name a few uses.
Think of it like embarking on a trip without a destination in mind, a map or a GPS to find your way. You wouldn’t set out without the tools to help you get there successfully. BI is the roadmap for your business.
That’s the “why” of BI.
Let’s look at “how,” with 11 steps to implement a successful business intelligence strategy.
1 – Get Buy-In
Whatever the size of your organization, the first step in your BI journey is to get buy-in, starting with an Executive champion.
Having a leader from the Executive team who will champion the BI efforts is vital, for several reasons.
For one, it demonstrates to the entire business that the BI strategy is a priority. Secondly, the Executive champion can ensure resources are in place, both human and financial, from across the organization.
The Executive sponsor is the liaison with the leadership team to ensure communication lines remain open and that every area is supporting the initiative. Finally, the Executive sponsor can remove any roadblocks.
When considering the best position to be the BI leader, it doesn’t have to be the person in charge of IT. After all, BI is not a technology initiative. The Financial Officer could be a good choice, but the best option is the member who understands the business strategy and will champion BI.
2 – Focus on Team Collaboration
Next, you need to build a team around the Executive champion. Don’t assume that the entire organization will support the initiative. You will need a cross-functional team to bring together all the components of the business. You need to champion team collaboration, with the right collaboration software.
Members of this team will be the champions for your project within each area of the business, so make sure you look for some impressive resumes when hiring for this role. They must understand the BI needs of their area, and be able to communicate the benefits of the project to each area.
They will have to share the information once it’s available and help each area to implement any changes or enhancements that are derived from the data.
It’s essential that each area of the organization dedicate human and financial resources to the BI strategy. While the IT department will be a vital part of the team, they should not be the entire team. Each area of the business must own the program. They know the information that would help them, and they need to be able to access the information when they need it.
Be sure to include strategic, operational and tactical areas of the business. They each require different types of information to enhance their work and improve the business.
3 – Define A Vision and Goals
Your BI strategy needs to provide information to your business that allows you to analyze where you are, and where you need to go.
The vision and goals of the BI strategy must align with the vision and objectives of the company.
So, the BI team needs to consider: What does it want to accomplish with the BI strategy? What does the business need to grow? What data would help support business growth?
Thinking back to our road-trip example, the vision and goals will define where you want to go.
Your team’s vision could be as straightforward as “providing BI analytics that allows the business to understand and take action to improve key performance indicators.”
Your strategy will then create the map to get you there.
4 – Determine Current State
With your team in place, you can now analyze the current state of the business, from several perspectives:
What data are you collecting? What technology is in place for collecting the data? What sort of collection storehouse is in place for the data? Will you need a new plan for data storage? How is the data shared and used? That includes structures and processes. What works? You don’t have to start from scratch. What doesn’t work? What data isn’t being collected that would help?
5 – Define Key Performance Indicators (KPIs)
A KPI is a measurable value that will show progress towards or achievement of a business objective. KPIs will tell you whether you’re achieving your goals or lagging behind targets. KPIs must align with the company’s overall vision.
For instance, monthly sales growth, monthly sales performance, or the number of new customers in a month are all examples of KPIs related to sales. They must be measurable.
Think about industry KPIs, internal and external data, and any historical data about your company. As well, think about who will be using the information and how you can best deliver it to them.
Each business area will have its own KPIs. To start, you don’t need a lot of KPIs. Choose a few important ones, from various areas of the business, as you can always add to the list later.
This is where it gets good:
Your cross-functional team will be at the table telling you how they use the data, and who will use it, which will inform your strategy and the execution of the plan.
6 – Establish and Document a Common Language
Your KPI list needs to have a “dictionary” that goes along with it. This ensures everyone is on the same page when referring to KPIs like “gross profit.”
A definition of standard terms may seem unnecessary, but it isn’t. It’s part of creating consensus on the data, how it’s calculated, and how it’s used.
Every area of the business must agree on how terms are defined and, more importantly, how data is collected, calculated and analyzed.
Get in touch to start your BI strategy
7 – Find a BI Partner/ BI tool
Once you reach this stage, you can finally start thinking about a software solution or partner to work with your business.
Choose carefully, using free trials or demos to help make your decision. Look for a partner who lets you start small and scale the project as you get more experience.
You’ll also have to consider things like your budget, and decisions like a cloud-based versus on-site solution.
8 – Phase-In the Strategy
Similarly to identifying a few KPIs and adding later, consider starting small and adding to the project as you progress.
That means you can choose a few KPIs, gather the information, and build reports to share with the organization. Ask for feedback on the reports and make any improvements.
Continue this process by adding more KPIs, developing more reports, and gathering feedback. You don’t have to implement a major project all at once.
9 – Communicate, Communicate, Communicate
We can’t say this one enough!
While you may have buy-in from your BI team, you need to do the work to ensure buy-in across the organization. After all, the best BI data will be worthless if it isn’t understood and being used.
Use your BI team to roll out the results in their areas. After all, they are the best advocates. They understand what their area needs to know, and they understand the BI strategy inside and out. Get the Executive sponsor to be part of those sessions.
Consider doing “lunch and learn” sessions, to explain the process and the data to the business.
Ask for feedback, and listen when you get it.
10 – Review and Revise
Besides gathering and using feedback, you need to continually review your BI strategy and revise it as necessary.
An effective BI strategy doesn’t have an end date. Your business goals may change; new products may be introduced; team members may develop new KPIs.
Keep investing in your BI strategy. Do regular reviews to ensure the data is still valid and useful. Make changes, additions, and deletions, if necessary.
11 – Celebrate
While your BI strategy won’t have an end date, you should take time to celebrate as an organization. Your BI team and their business areas have done a lot of work, and that work has helped improve the business.
Take some time to thank everyone, and have a BI celebration. After all, everyone loves a party!
Implementing an effective BI strategy is not done overnight. It takes considerable effort, time and consideration to be done correctly.
But an effective suite of BI analytics will be valuable to your business in many ways. It can help improve internal processes. It can provide information on efficiencies. It can give insight into possible new products, or adjustments to existing products. It can even provide information on competitors.
Following the 11 steps we’ve outlined will help ensure your business will find success in developing and implementing an effective business intelligence strategy.
Danielle Canstello is part of the content marketing team at Pyramid Analytics. They provide enterprise-level analytics and business intelligence software. In her spare time, she writes around the web to spread her knowledge of marketing, business intelligence, and analytics industries.