The Business Intelligence Chasm

The term Business Intelligence was first coined by IBM researcher Hans Luhn (in the IBM Journal of Research and Development, October 1958) and then used in its modern sense in 1989 by then-Gartner analyst Howard Dresner, who defined BI as an umbrella term to describe concepts and methods to improve business decision making by using fact based support systems.Both these definitions were quite prescient for its time – Mr. Luhn’s concept of ‘action points’ in the organization and Mr. Dresner’s reference to ‘business decision making’ ensured that BI has direct business relevance to go along with its very interesting technology façade.

BI & Analytics, in some sense, represents the holy grail of computer based applications, i.e. the use of technology to solve real world business problems. Clearly, there are 2 distinct aspects to BI –Technology and Business and both have to work synergistically to deliver on the overall promise.

As we step into 2013, my contention is that we as BI practitioners are doing fairly well on the technology front by assimilating many of the new developments (In-memory, Appliances, Columnar storage, Big data processing etc.) into mainstream data management, reporting and analytics, while we lack the skills required to integrate all this in the broader business context. Let me substantiate that statement.

Decision making in / for an organization is a very involved activity. One needs to have an understanding of the enterprise business model, customer needs & wants, value creation process, industry structure, competitive positioning, profit models, nature of products and services to start generating the relevant options to aid decision making. Business Intelligence, in the way, it is practiced right now, shows little appreciation to the art & science of decision making in organizations, thus creating the ‘BI chasm’ as show below.

Figure 1 – Current State of BI

For BI & Analytics to really have an impact in delivering better business outcomes, this has got to change. The envisaged future (2013 & beyond) is one where technology improvements are synthesized with decision making and decision validation capability thus creating a comprehensive case memory for the organization.

Figure 2 – BI in 2013 & Beyond

Those practitioners and organizations that can integrate the technology and business decision making aspects would thrive in the coming years. It is with that confidence; we at Hexaware have created the BI consulting practice to help our customers in their journey towards ‘Actionable Intelligence’.

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Wish you all a very happy new year 2013.