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Sam Horton
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" Am I drinking the industry Kool-Aid to think companies of all sizes need BI? " No, but for many SMBs the decision is pretty clear in any one year: spend on the business or pay more to the owners. And most SMBs, even in Pharma where budget is not really an issue, run up against two barriers: (1) inertia of existing staff, namely that they suspect BI will eliminate a job or two, possibly their job and (2) inertia not to ask for budget changes due to a strong focus on cost control and/or instant ROI. That is why it takes a year or more to sell any SMB BI, and that is why a clear sales presentation including career benefits to everyone at the table is crucial. The only exception I noticed to those SMB rules was compliance, specifically any area where a c-level person can be fined or jailed for failure to comply. (FDA/DEA)
"The problem with BI and analytics is that we don’t quite understand the nuances of the different ways that BI tools work and the distinct ways that they empower users." This happens when an organization is so large that it cannot utilize a COE approach fast enough to help line managers with budget authority understand what a vendor is saying and what really is possible with BI tools overall. The result is local approvals case-by-case leading to multiple tools. As for the CIO perspective, the pressure on reducing a top-line expense budget in total has to be reconciled with a group-level budget manager's perceived ROI of her/his current tool vs. a standard. I was never convinced that a standard saved money due to switching costs, particularly business disruption of any expensive/risky process. That said, the only time I have seen a company wipe out all but one tool (global metals firm, Philly) it was done using a two-pronged approach: (1) The CEO said so, and (2) all departments had a direct expense cap of $25K for any size project plus 2 years to convert. Very nice article.
In the F500, Controllership (Finance) was delegated the task of monitoring compliance and updates worldwide on behalf of purchasing, where the purchasing function reported to IT. That works because in many cases compliance is so complicated that it is itself an analytic task. (Why: Costs are allocated out by group utilization, so someone must consolidate it) As an OEM, the task fell to the commercial team and the vendor (Microstategy) was very helpful. In both cases, we had internal BI reports on license compliance a remittances for CIO/IBU review and budgeting.
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Feb 9, 2011