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Economic considerations are at the heart of any business decision. They not only affect how we implement business intelligence (BI) solutions but also what we can do—and we give up other opportunities in the process of doing so.

Here are three principles I have discovered during my work in the BI space.

1. Trade-offs (and opportunity costs) are everywhere. Organizations face many decisions associated with various strategic or tactical goals. It is usually unrealistic to expect that all of these goals can be accomplished at the same time.

Within the context of a BI program, these trade-offs are even more pronounced. A small group of users may want self service and control over the report creation process, while another group wants nicely formatted reports, preferably in Excel and received via e-mail. Aligning the technical tools with these requirements is usually at cross-purposes.

Another trade-off happens along the lines of efficiency and equity. An efficient BI program will maximize the benefits realized by the user community, but an equitable program will fairly distribute resources among the users.

Recommendation: I have always found it useful to educate the user community continuously and clarify that the resources at the disposal of a program are limited (even scarce). Identify all the user needs, catalog them, and show continuous progress in terms of building blocks for the solution. We must do this often enough so the user community stays engaged with the program.

2. Marginal thinking is important, as is providing incentives. Decisions are rarely black and white, especially when it comes to a BI program. Move the program forward and implement the technical architecture in such a way that users can maximize the benefits they derive from the solution.

If a report or dashboard is going to reduce several operational cycles for many end users, it needs to be given higher priority and resources. The tangible benefits, such as reduction in cycles, also result in solidifying the return on investment for the BI program. Rational decisions are almost always successful if the marginal benefit from the decision exceeds the marginal costs. This holds true, especially for capital investments and the agility with which these decisions have to be made. Purchasing an enterprise-level BI tool set may not be necessary at any given point in the program cycle, yet you may feel compelled to consider it. The noise created by marketing efforts can, at times, be overwhelming, and can cloud the decision-making process. Remember, it’s the benefits and the costs that drive the process, not the marketing promotions.

Incentives, such as reduction in cycles spent, data quality, and higher grade of dependable data, all affect how end users derive benefits from the program. Agility in delivering smaller projects (one- to three-month cycles) that further the strategic goals of the program should also be viewed as an incentive.

Recommendation: Involve the user community in the decision-making process early and often. Clarifying strategic as well as tactical goals is important. Ensure that work streams are smaller and can be built into “products in use” in smaller cycles. Educate the user community about the tangible and intangible benefits they will derive when the project is complete.

3. Data governance, especially a steering committee, holds the master key. Data governance (both people and processes) are an important—yet often ignored—factor. Some entity has to provide a platform for a variety of communities to come together and enforce the rules that these user communities should follow.

With a strong governing council and steering committee, a BI program can promote efficiency and equity. This is especially important for a large BI program that intends to bring a variety of organizations together.

The platform provided by the governing council and/or steering committee also provides concrete, actionable direction to the BI program. The data governing/steering committee will not always solve the efficiency and equity problems, but the forum helps every stakeholder stay engaged.

Recommendation: Make judicious use of the governance framework and the steering committee to promote efficiency and equity. Use these mechanisms to foster acceptance and use of the solution(s) already built and drive consensus for future projects.

Mangesh Mharolkar [mmharolkar@xtivia.com] has worked for over 17 years with information systems and currently heads the BI practice at XTIVIA, Inc. He has worked in various roles for client firms of all sizes, including Fortune 500 companies, building industry-leading data warehousing and BI solutions. He practices a hands-on, practical approach to both strategic and tactical decision making with BI initiatives.

“This article was originally published in TDWI FlashPoint, October 3, 2013.  Republished with permission.  Visit tdwi.org for more information.”

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