Business Intelligence is a Diagnostic Tool, but is the "Patient" Willing to Listen?

Over the years I have found BI author and consultant Neil Raden to be a welcome voice of common sense, from advocating simplicity for successful BIinsisting on avoiding hype, to a healthy disdain for BI buzzwords (“I’ve reluctantly come to the conclusion that ‘analytics’ means anything the speaker/writer/vendor/analyst wants it to mean,” Raden said in a recent droll tweet).

Photo: ThisIsIt2 – Flickr CC

Somehow, until recently, I had overlooked a particular Neil Raden BeyeNETWORK blog entry which really struck a chord.  The title speaks for itself: You Cannot Fix a Broken Company by Measuring How Broken it is.  Neil Raden’s post goes to the heart of what Business Intelligence is, and what it is not.  From Neil’s post:

The BI industry has sort of casually sent the message that BI makes companies better. I’ve seen this in presentations, webinars, seminars, books and blogs from vendors, practitioners and analysts. But the question is, once you expose something that needs attention, what next? As a consultant and implementer of data warehousing and BI for many years, I never really came up with a good answer…

And here is an especially important comment:

Even when we did everything we set out to do [in a BI/DW consulting engagement], when approaching management about the next phase of the operation, to help the client start addressing the problems with employee morale, high turnover, inventory snafus, poor customer service, etc., the response was usually something like, “Neil, aren’t you the data warehouse guy? Shouldn’t we get McKinsey in here to work on that?”

I empathize with Neil and this ‘You’re just the techie’ brush-off, but management’s response to Neil’s inquiry raises much more serious concern: the first response by management to address serious business problems was to bring in outside consultants…?  Was the accidental point of the response that the company’s executives perceive they cannot effectively address, on their own, the issues identified by Neil Raden’s BI solution?

One more quote from Neil’s post:

In short, if you’re involved with BI, you may have as good or even better insight into what is going on in the company, but you clearly lack the portfolio to do anything about it…

After reading Neil’s observations, a medical analogy came to mind.  Like a medical device designed to identify illness and disease, BI is also a diagnostic tool that can identify performance “illnesses” in an organization, but cannot in itself be a “cure.” (This is an incomplete analogy, of course, as BI can help identify ‘good’ things too, like uncovering positive new business trends, etc., but it matches the experience shared by Neil Raden).

Extending the BI/medical diagnostic tool analogy:  Many years ago I spoke with the founder of a start-up medical device company.   He told me that in order for a medical diagnostic system to be successful, a course of treatment has to also exist.  For example, he explained that (at the time) there was no course of treatment to reverse the effects of osteoporosis; therefore, existing medical devices to measure bone density were of relatively nominal value or benefit.  In other words, once the data (i.e., substantial bone density loss) is uncovered, there was no corrective action for the patient to take.  (Today, thankfully, this is no longer the case.)

The good news for practitioners and developers of BI/DW technology is there are indeed “courses of treatment” to reverse the effects of low employee morale, high turnover, inventory snafus, poor customer service, etc.  These courses of treatment, however, require strong leadership dedicated to rolling up their sleeves, and actively use BI tools as part of a culture of data-informed decision-making.

In contrast, if management is so hands-off that its default is to halfheartedly “sub out” addressing pervasive business problems to outside consultants – or, even worse, chooses to deny certain problems exist at all – no amount of BI may be enough to effect authentic change.  It’s a bit like a doctor showing a chain-smoking patient an x-ray of his damaged lungs, and yet the patient, so disengaged from the very process of maintaining his own good health, keeps right on smoking.

I’d like to point to the University of Maryland, Baltimore County (I very much enjoyed working with UMBC, a customer of a former employer; see my case study here) as an excellent example of an organization embracing that essential culture of data-informed decision-making.  This culture is actively advocated from the top, by the University’s President, Dr. Freeman Hrabowski.  It’s no coincidence in a University Business article that President Hrabowski emphasizes the importance of a “culture of critical thinking” and the need for a “deliberate effort” to engage in conversations and problem-solving with others.

The bottom line is BI can inform management like a diagnostic tool, but management in turn has to believe in the efficacy of the “courses of treatment” – that is, buying into and publicly committing to a culture of data-informed decision-making, and, for that matter, a managerial culture that does not regard practicing good business health as somehow being someone else’s responsibility. 

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2 thoughts on “Business Intelligence is a Diagnostic Tool, but is the "Patient" Willing to Listen?

  1. Neil,

    Thanks for your message. Good question! Meanwhile, I now realize I haven’t followed you on Twitter yet (fixed) 🙂

    Mike

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