Velocity - The Root Cause for BI Explosion

Posted by Karthikeyan Sankaran
Comments (2)
July 6th, 2011

Question – What is the fundamental reason for the unprecedented demand for Business Intelligence & Analytical solutions?

Answer – Velocity!

Let me explain a bit in this blog post.

Across the spectrum of industries there is so much talk about Analytics, Business Intelligence, Information Management, Performance Management, Big Data etc. that it is probably safe to say that we are experiencing an unprecedented demand for BI in its broadest sense. I had this eureka moment a couple of days back when I realized that the answer to that question could well be the – “Increase in Velocity of Business Decisioning”.

In this context, Velocity should be construed as the tremendous speed with which businesses are trying to make decisions and also ensure that their decisions are in the right direction (i.e. positive impact and reduced risk). Sample this from Vishal Sikka’s key note address on SAP HANA during the recent SAP event at Boston.

1) Global CPG company reduced Real-time Profitability Reporting from 6 minutes to 736 ms
2) Large Manufacturing company reduced Customer Reporting from days to seconds
3) Financial services company reduced the time taken for running the Cross-Sell analytical model calculations from 45 minutes to 5 seconds
4) An Automotive company is able to perform Real-Time Analytics on 233 Million vehicles

And many more. Bottom-line is that ‘Organizations have started realizing that speed of decision making is directly proportional to the magnitude of competitive advantage for their firms, in this globalized world’. All things remaining constant, faster the decision making cycle greater is the competitive advantage. I remember reading a book called the ‘Age of Speed’ by Vince Poscente some years back but never realized that BI will be so intimately touched by it.

But for an organization to truly thrive, Speed by itself is just a necessary condition but not sufficient. The sufficiency condition is that the direction of decisions made needs to be constantly evaluated (Think Performance Management) – Does it create positive impact? Is there a cultural fit? Are the decisions in line with the regulatory framework? Do my customers get the intended value? etc.

So ‘Speed with Direction’ for which physics helps us with a nice descriptor called ‘Velocity’ is my answer as to the root cause of what is causing this explosion for BI & related services. At Hexaware, the company I work for, we are very conscious of this need in organizations to increase the speed and accuracy of decision making and have created specific solutions to address this need.

On a different note, I did some research to create a mind-map showing the different dimensions of BI. You can access the mind map at this link – Please do take a look and send in your feedback. Thanks for reading.

Comments (2)

Karthikeyan Sankaran - July 15th, 2011

Siva - I agree to your points. Infact you have nicely articulated the thoughts of Dr. Richard Hackathorn, who said that there are 3 fundamental latency factors involved in decision making: 1) data latency - the time it takes to get the data organized for analysis 2) analysis latency - the time it takes to analyze and interpret the results 3) decision latency - the time lag between deciding what to do using BI and the actual decision taken in the real world. The tolerance for these latency factors depends on the business context and the organization itself. Coming back to the blog post, the perspective is that, there are relatively far more areas / departments within organizations for which speed (or velocity) of decision making is assuming significant importance from a competitive advantage standpoint and that is driving BI adoption on a large scale.

Siva - July 15th, 2011

Karthikeyan, interesting observation. However, my view is that orgs. should not get too obsessed with the speed of decision making as it comes with an associated cost as well. Also, the time lag that is present between the output to the the actual decision making is also important. Why have my data available real time if its weekly sales data that I am interested in?

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