The Effect of the BI Application on Business Performance

March 1, 2006 from DM Review - "Over the last couple of years, most of the business intelligence (BI) vendors have relabeled their products as performance management solutions. Their definitions of performance management have varied, depending on what products they happen to include in their suites, but they usually fail to demonstrate exactly how their products have helped the business performance of their customers. Even if they tried, it would be very difficult for them to show how the particular features of their products generated superior business performance compared to competitive products...

The latest OLAP Survey had an even larger sample than the four previous editions: data from 2,100 participants in 95 countries was used to analyze dozens of aspects of the purchase and use of more than two dozen OLAP products. In total, 5,551 people responded, but some were not yet users, others were vendors using their own products and some were unable to answer questions. This is by far the largest independent survey of BI users ever carried out.
How Do You Measure Business Performance? Because of the wide range of products included, The OLAP Surveys don't compare features of products - how could you compare the features of Hyperion Essbase and Oracle Discoverer? Instead, since the second edition of The OLAP Surveys in 2002, we've used a benefits-based benchmark. After all, why would you buy any BI product if you weren't hoping to gain business benefit?

We came up with a basket of eight possible business benefits. They cover various areas, focusing on aspects such as reduced costs, increased revenues, improved customer satisfaction and greater internal efficiency. We also allowed respondents to add a ninth if they thought it relevant. Few did, and because no consistent ninth benefit has emerged, we continue to use the same standard list of eight benefits:

• Saved headcount in IT,
• Saved headcount in business departments,
• Reduced external IT costs (hardware, support, consulting or software licensing),
• Saved other non-IT costs (e.g., inventory, waste, financing),
• Faster or more accurate reporting,
• Increased revenues through better sales and marketing analysis,
• Improved customer satisfaction through enhanced product quality and/or service levels,
• Better business decisions through more thorough or timely analysis...

The OLAP Survey uses the business benefit index to measure the effect of numerous factors, including:

• Product choice,
• Methods of product selection,
• Architecture (MOLAP versus ROLAP),
• Input data volumes,
• Server platform,
• License fees paid,
• External consulting costs,
• Type of lead implementer,
• The extent of Web deployment,
• Deployment time,
• Data load/aggregation time,
• Query performance.

Of all the aspects evaluated, query time turned out to have the biggest impact on the business benefits achieved. Others, such as data volumes and server platform, had remarkably little impact on the BBI. This year, even product choice had little impact, though it was higher than in previous years.

180 View - The author has focused his attention on Online Analytical Processing (OLAP), which is but one component of corporate performance management systems. The other components - strategic planning, scorecarding, budgeting and forecasting, and consolidation - would have a much bigger impact.