Homepage Gartner newsroom

Gartner Identifies the Fatal Flaws of Business Intelligence and Advises Organisations on How to Avoid them

Announcement posted by Gartner 05 Feb 2005

Presenting at Gartner Inc.s Business Intelligence Summit in London this week, analysts warned that although Business Intelligence (BI) offers great business opportunities, most enterprises are still failing to use it strategically. Gartners leading BI analysts identified the most common pitfalls of BI implementations and advised an audience of more than 750 attendees how they might be avoided.
A Gartner survey of 1300 CIOs in more than 30 countries around the world has revealed that CIOs plan to increase spending on BI by an average of 6 percent this year. As companies move away from cost cutting initiatives, CIOs believe strategic use of business intelligence, combined with a focus on improving business processes, will be most significant in delivering IT's contribution to business growth in 2005 through 2008.
If you ask organisations what they want to use BI for, better decision-making is the top answer, said Frank Buytendijk, Research Vice President at Gartner. But most organisations are not making better decisions now than they did five years ago. The pressure from cost cutting and compliance has put a greater focus on BI, but businesses are still using it very tactically. Successful organisations realise that having a real vision for BI is the key to business performance and they use information as a resource implemented in their business culture.
Gartners leading BI analysts highlighted seven major flaws inherent in BI and outlined Gartners best practice for avoiding them.
Flaw 1 - If we build it, they will come
Gartners Research Director Bill Hostmann pointed out that data is fundamental to BI, but how the data warehouse is set up and run is also critical. Data warehouses are often created by the IT organisation with little or no business involvement. Consequently, users within the organisation often perceive them to be of low value.
Too many IT departments build a data warehouse based on the assumption that once it is built, users will automatically see the benefit, he said. BI applications require a clear and intimate understanding of the business itself and it is only by working on business and IT issues in tandem that the real value of BI is realised.
Flaw 2 - Managers need to negotiate the numbers
According to Mr Buytendijk, too many people hide behind spreadsheets because they are used to them and because they know how to manipulate the numbers to satisfy the politics of their organisations. He advised enterprises to use the pressure of compliance to achieve greater things, such as cleaning up the many data silos, creating more ownership around performance data and eliminating many of the thousands of spreadsheets.
Flaw 3 - Data quality problemwe dont have one
Gartner predicts that through 2007, more than 50 percent of data warehouse projects will have limited acceptance, or be an outright failure, as a result of lack of attention to data quality issues. Furthermore, many organisations fail to see that they have an issue with data quality, focusing rather on identifying, extracting and loading data.
Mr Hostmann is clear that data quality issues need to be addressed on an ongoing basis and that enterprises need to accept that these are not just IT issues.
Consistency and accuracy of data remains the responsibility of the business departments operating the systems, not just the IT department, he commented. New regulations and corporate governance have increased the demand and attention for data quality. The problem is that most companies continue to take data quality as a given.
Flaw 4 Our enterprise applications vendor will deliver the best solution
All too often, enterprises assume that a one-stop shop solution will be both the most cost effective and best solution for the business, said Gartners Research Vice President Lee Geishecker.
She warned attendees at the summit not to assume that major enterprise application providers offering BI solutions and tools will always address all of the information requirements. Although some enterprise application providers can save you money overall, it isnt always the case. Always compare your enterprise application vendors solution with that of a market leading specialty vendor, she concluded.
Flaw 5 - Darwin was right - BI projects need to evolve
Business demands projects to be short and simple, and to have an immediate return. However, Mr Hostmann said that this could easily lead to the wrong scoping of projects.
Just as using the same templates time after time mean plans rarely evolve, building in the same limitations in to a new system is one of the greatest inhibitors to success. BI needs to evolve but BI projects should not - they should start and stop and not evolve, he added.
Flaw 6 - We can outsource the whole thing
Gartner predicts that through 2006 less than 10 percent of enterprises, where outsourcing could be a viable strategy, will be ready or able to outsource their BI applications and operations completely. Gartner said enterprises must define their BI key competencies and capabilities in order to determine what to in- or outsource. As ever the golden rule of outsourcing applies; avoid the temptation to outsource everything and only outsource things that are not a core competency, Ms Geishecker warned.
Flaw 7 - Just give me a dashboard!
A management dashboard should be seen as the finishing touch. Mr Buytendijk said, Companies must have a solid and stable BI infrastructure in place first. They should then create a networked approach where these new technologies are able to communicate with other BI technologies inside and outside the organisation, as well as with other technologies such as business process management and application integration.
Gartner provided three key recommendations that follow five years of study drawn from thousands of customer interactions and codified in Gartners BI Framework.
1- Make sure you have senior level business sponsorship for BI
2- Have a unified BI infrastructure
3- Leverage existent wisdom and evolve your BI initiatives
For more information about the Gartner Business Intelligence Summit 2005, please visit www.europe.gartner.com/bi.
About Gartner
Gartner, Inc. is the leading provider of research and analysis on the global information technology industry. Gartner serves more than 10,000 clients, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company focuses on delivering objective, in-depth analysis and actionable advice to enable clients to make more informed business and technology decisions. The Company's businesses consist of Gartner Intelligence, research and events for IT professionals; Gartner Executive Programs, membership programs and peer networking services; and Gartner Consulting, customised engagements with a specific emphasis on outsourcing and IT management. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has more than 3,500 associates, and including more than 1,000 research analysts and consultants, in more than 75 locations worldwide. For more information, visit www.gartner.com.