Intelligent Business

BI projects are just a start…

How many times have you attended a meeting where the other attendants brought their own Excel-sheet showing conflicting figures? Probably way too many times… You wish for everybody to use one source, one definition, and maybe even one report or dashboard for their information needs in this meeting. Eventually a small business intelligence project is started to make some of these reports, but along the way you discover that the information quality is not okay, sources have to be integrated, uniform definitions have to be made and so on. The project scope is creeping and the budget is overrun… Familiar?

Especially when the BI project is initiated top down and organized centrally, information between different information islands (applications, business units or processes) have to and will be shared and exchanged. Both socially and technologically this can enable many consequences in the organization that are all too often not anticipated in the beginning of the project. There is more to the eye than meets the eye…

This is where information logistics come in. A couple of years ago I wrote a master thesis on the role of information in supply chain management. As you might know information is exchanged between buyers and suppliers in the supply chain in order to move goods as efficient and effective as possible to the end-consumer [1].  Besides efficiency and effectivity, exchanging information in a supply chain has many more consequences, but also needs some prerequisites… To start with the exchange of information between buyers and suppliers is only done when a certain amount of trust and collaboration is in place between the involved parties.

While on another level, it is here I see an analogy to aforementioned information islands in an organization that kick started the BI project. Just like organizations in a supply chain, information islands in the organization can be considered as business entities that exchange information in order to operate as efficient and effective as possible. The model I developed for my thesis can be put to good use here.

Namely, these islands will only share information with each other when they have a collaborational relationship and trust each other [1,3]. When they exchange information, transparency is created between them (and possibly other business units). Another side effect is that so-called white spots appear. Some information is not available, or of poor quality. To improve on this, information has to be integrated in uniform definitions or by introducing organizational or industry standards (such as XBRL) [1]. In addition, this can result in information systems that are integrated (in this case for example a datawarehouse, datamart or reporting layer) [2]. Because organizational units are gearing their activities to one another as a result business business process integration takes place which in turn will lead to increased collaboration and trust (in each other and the information) [3]. In doing so a reinforcing loop comes into existence.

So, going back to the BI project, why is it more often than not more encompassing then anticipated? Simply, because it is often not anticipated that initiating a similar project not only creates centralized reports, but as information is the lifeblood of an organization it has both technological, social and organizational effects.

Please let me know if you would like more information on the model or the thesis.

[1] Lee, H. L. and S. Whang (2000). “Information Sharing in a Supply Chain.” International Journal of Technology Management 20(3/4): 373-387.

[2] Aubert, B. A., B. Vandenbosch, et al. (2003). Towards the measurement of process integration. Scientific series. Montreal, CIRANO (Centre Interuniversitaire de Recherche en Analyse des Organisations.

[3] Premkumar, P. K. (2000). “Interorganization systems and Supply Chain management: an information processing perspective.” Information Systems Management 17(3): 56-69.

Add comment October 29th, 2008