BI Critical to Operations but Hobbled by Poor Data, According to Study

Sep 26, 2006

Executives recognize the value of business intelligence (BI), but are unable to apply it effectively to improve their operations, according to a new survey of 386 senior executives worldwide. The study highlights a number of hindrances to the use of BI-- defined as information about an organization's financial, operational, and business performance. These include data inconsistencies, poor data quality, and an ad hoc approach to installing BI systems.

The findings are published in Business intelligence: Putting information to work, a paper written by the Economist Intelligence Unit and sponsored by SAP and Intel. It finds that just 4% of respondents are "very satisfied" with their companies' data integration and analysis. Tools to gather BI are largely restricted to senior and middle managers, and information is stored haphazardly in multiple locations and formats across the enterprise. Eighty percent of the executives surveyed say that their organization's performance would improve if BI data were disseminated more broadly, and 40% say their workers often make poor decisions because of inadequate data.

Other key findings of the report include: Top-down direction of business intelligence efforts is lacking at most firms. Few companies impose a centralized strategy for managing their BI projects. Only 43% of executives say they usually install BI systems as part of a strategic mandate. Almost half use BI tools in isolation within individual departments or groups; Executives overwhelmingly call for consolidation and standardization of BI applications. Sixty-three percent of respondents say they would like to consolidate their information on fewer BI platforms, and an identical number say their current and legacy systems are sometimes incompatible. Separate and often conflicting systems from different vendors aggravate the problem. More than a third of the companies surveyed use two or three vendors, and 14% use between four and seven vendors; Significant barriers that executives cite include: improper association of performance measures with business processes (34%), inability to generate performance measures (27%), and a lack of monitoring of key performance indicators (26%). Only 55% of respondents say their companies effectively assess progress towards performance goals, and only 37% believe their companies effectively change processes that fall short of those goals. The study is available free of charge on the EIU website.