The other day I had the opportunity to review a platform & service that purports to reduce the inventory of cash in the ATM network. Cash transactions and end-of-day levels were recorded and sent to an analytics engine. The information so collected is subjected to analytics algorithms and some manual analysis.
What happened when the analytics engine detected any sub-optimality? It flashed specific recommendations on the frequency of refills in each ATM, the bill denominations and amount at each refill. The analytics service is measured by the reduction in the inventory of cash in the ATM network, not by the number of reports that it generates.
Shouldn't this be the way Business Intelligence and analytics works anyway?
The tragedy of BI / analytics today is that it is seen as technology to present information, and is often disconnected from operational systems. It rarely provides insights or recommendations for specific action.
Peculiarly, the biggest impediment to progress in not intention but organization design. I discover most services companies have flawed organizational designs - and hence progress in this area continues to be limited.
Keeping the above in mind, I have the following suggestions and ideas:
- If you are considering BI and analytics in your business, centralize your data management and datawarehousing functions but embed analytics and BI into your lines of business function. For example, the risk guys should have their own analytics, the fraud their own, procurement their own and so on.
- If you are an IT/Business consulting services player, differentiate the plumbing and foundations that are more technology centric from business intelligence and analytics that are closer to business. Consider creating Data Management/ Datawarehousing as a line of business focusing on foundations - data management, ETL, appliances, high performance computing, latency, physical data modeling and optimization. However, create Business intelligence and analytics as closely aligned to the industry oriented business units.
- Consider business intelligence and analytics as an incubator for new ideas in your industry business units. After transactions systems have been perfected, the next set of performance improvements will only come from data. Remember - none of these great ideas will take off until you business units own them. So let them drive it.
- Enhance your business consulting with the above capabilities. There is a huge capability gap in the industry. The gap is NOT on technology. The gap is around blending 4 elements to achieve enhanced business outcomes. These 4 elements are - understanding of the business, understanding mathematical modeling, visualization, and IT foundations. The best guys to "get it" are business consultants - I opine these guys are sharp and can learn what is needed to transform business as opposed to leaving it to the technology fraternity.
- If you are a pure-play business consulting player, consider creating a business analytics offering positioned as "using information to enhance business outcomes". Side-step IT services players as providers of plumbing and foundation technology.
Posted October 5, 2010 7:11 PM
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