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Half of business intelligence projects fail, but why? As it turns out, it’s a complex combination of a number of things. So just how can your enterprise avoid becoming another statistic when it comes to making your data work?

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By  Ben Furfie Published  September 13, 2010

Half of business intelligence projects fail, but why? As it turns out, it’s a complex combination of a number of things. So just how can your enterprise avoid becoming another statistic when it comes to making your data work?

Business intelligence at its most basic is all about data. It’s about using an enterprise’s data to make sense of historical trends. It’s about using that same data to plan for times ahead. It’s about enabling enterprises to find out exactly what the state of the business is. This very second.

Yet despite the simplicity of the concept, half of all businesses implementing business intelligence fail to do so effectively. There are, of course, a huge number of factors governing why many business intelligence projects fail to take off. However, according to many analysts, the one common theme behind the high failure rate is a misunderstanding of what business intelligence actually is and who it is for.

Recent research by the University of Cambridge on behalf of international auditors KPMG found that all too often business intelligence is viewed as ‘IT’s problem’ despite the fact that the technology side of the business process is only a small part of it. According to its findings, those companies that find business intelligence failing to help them have more often than not thrust responsibility for the entire implementation process on to the CIO. KPMG’s findings make it clear that failing to recognise that business intelligence is part of a wider picture is a surefire way of ensuring it fails, more often than not costing the business a lot of money in the process. It says that business intelligence needs to be embedded within all of a company’s processes and not just those of the IT infrastructure if it is to be successful in its aims. Many of the processes that need to be addressed are simply beyond the remit or influence of the CIO.

The business case behind the process is well understood. Take the data you already have and leverage it to make your company more efficient and to spot the opportunities in the market you’ve been missing. The problem appears to not rest with the IT department, but with the CIO’s fellow executives, many of whom refuse to accept their part, says KPMG.

“The need for business intelligence and reporting is being driven by the high importance of needing to know how your business is doing,” explains Ali Hosseini, director of professional services at GBM. “However, it is often initiated by other members of the business, and frequently falls to CIOs to implement it on behalf of the company.”

According to Hosseini, the introduction of business intelligence is driven by forces outside of the IT department in 80% of cases. “Only rarely is it initiated by the IT team, as more often than not it won’t be them using the business intelligence.” He says that it is a dangerous precedent and one of the main reasons why business intelligence comes to be viewed as a technology project – which it isn’t – rather than a change in the business processes.

One of the earliest signs that a business intelligence implementation is failing is poor uptake amongst those employees who can benefit from the information provided. By then, often it’s too late.

“The biggest problem with business intelligence software is that it doesn’t get adopted very well,” reveals Yassir Khokhar, business group lead at Microsoft Gulf’s Information Worker division. “Approximately only 17% of users actually use business intelligence software despite it being available to them.”

That inability for CIOs to drive changes in staff procedures in other parts of the business is one of the reasons that business intelligence implementations fail, and a lack of uptake is a very obvious symptom of that.

However, things are changing according to some. The lessons of the recent financial crisis are driving a wholesale change in the role that the average IT manager has within the business. “Because of the transformation of business processes in the wake of the recent financial crisis, enterprises are waking up to the reality that it isn’t enough to have these numbers available to them: they need to also use them,” explains Hosseini.

One of the biggest changes that needs to happen argues KPMG, is a shift from being reactionary to proactive when it comes to using data. The auditor argues that the challenge is for companies to move away from an analytical mindset and begin to look at ways that the data can be used to create strategic insight and plan for the future.

Another major issue faced by business intelligence in the modern workplace is antiquated hardware and procedures. While the hardware issue is easily resolved, either now or at the next major refresh, the issue of use is less easy to resolve. The main reason for this is because it requires a wholesale change to how all IT users interact with the infrastructure, whether that is through using their PC to write a simple letter, through to how network managers back up information.

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