So, What's Your Business Model?

Posted by Karthikeyan Sankaran
April 12th, 2009

In my last post, I expressed the view that the world of BI is expanding at a rapid pace. Substantiating this hypothesis is the fact that there are many types of BI solutions possible.

BI systems:

  • Can have many different end points (My view here)
  • Can have different industry flavors (My view here)
  • Can have business process implications (My view here)
  • Are spawning new types of databases and data models (My view here)
  • Are grappling with many unconquered territories (My view here)
  • The list goes on and on….Ultimately this results in a vexing problem for BI practitioners who’s job is to advise organizations on the type of BI system to be built for them. BI consultants know that there is no cookie cutter approach to solving enterprise BI needs across companies but they are not very sure on where to start.

    This post tries to address the issue of – “If there are so many different types of BI solutions possible, what is that first question to be clarified so that the BI practitioner is on the right track to provide the best fit BI solutions for that particular organization”. In my humble opinion, the question should be, “So, What’s your business model”? If this question conjures images of white boards filled with arcane mathematical formulas, that’s probably because we don’t completely understand what a business model is. Business Model is anything but arcane – it is just a story of how an enterprise works.

    Business Model is a set of assumptions about how an organization will perform by creating value for all the players, on whom it depends, including its customers. Like all good stories, a business model relies on the basics of character, motivation and plot. For a business, the plot revolves around how will it make money. Characters are the different stakeholders (internal & external) in that business and each one of them acting in their own self-interest (motivation) makes the plot plausible and meaningful. All successful businesses have a twist in their plot (think of Google, eBay, Dell etc.) that has made them fantastically successful. You can read more about business models in the book by Joan Magretta titled “What Management Is”.

    From BI perspective, once the practitioner understands the business model of the company, many questions gets answered:

  • What drives the company’s success and how BI can help?
  • Who are the stakeholders and what information are they looking for?
  • What needs to be optimized and how it can be done?
  • What is the architectural blueprint and how will it evolve?
  • How fast should information get delivered?
  • How much data needs to be collated and how far into the past should one go?
  • What are the regulatory requirements for the company?
  • And many more….In essence, clarity on one aspect of the problem (business model) will go a long way in selecting the right kind of BI solution for that particular organization.

    So next time, you are on a BI consulting engagement, make this as your first question – “So, What’s your business model?”. Hopefully this would get you started in the right direction. Please do share your thoughts. Thanks for reading.

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