How Best-in-Class Enterprises Solve BI Skill Shortages
Best-in-class companies are tackling the shortage of BI skills head-on, according to new research from the Aberdeen Group.
by Dave Hatch
The delivery of actionable information to the enterprise requires the ability to access and integrate data, apply business rules and relevance, and deliver information to people when, where, and how they need it. These goals are stated, tempting to shoot for, but very difficult to achieve. According to research conducted by Aberdeen Group in June and July of 2007, the business intelligence (BI) skill sets required to meet these goals are in limited supply.
In addition, many companies are struggling to integrate data from all necessary sources, and are unable to ensure data quality due to the disparity of data and the multiple versions of information that exist within applications, spreadsheets and data warehouses. This has prompted organizations to investigate strategies and enabling technologies and services to help alleviate the need for BI skill sets and the complexity of data quality and integration projects.
Aberdeen’s new benchmark study, “Delivering Actionable Information to the Enterprise: Does on-demand BI Solve the Skill Set Shortage?” focuses on the strategies, tactics, and technology investments and adoption plans that enterprises are taking to alleviate the scarcity of BI skill sets. The study benchmarks best-in-class organizations as being those that have:
- Decreased time-to-completion of BI application projects
- Increased on-budget completion of BI projects
- Decreased the cost per user of BI applications
- Shown direct impacted on revenue by increasing the number of people in the organization with relevant BI/IT skill sets
There is much to be gained from adopting a best-in-class approach to information delivery for the purposes of decreasing costs and project timelines, increasing on-budget project completion, and addressing previously underserved employees. The planned strategic actions, as reported by best-in-class survey respondents, show a more sober, institutional view of BI implementations. Companies are striving to find real business value before launching headlong into lengthy, complex BI projects:
- 61 percent of best-in-class companies are planning to review their content- and knowledge-management strategy
- 60 percent plan to establish a method for measuring ROI for each BI project
- 55 percent plan to measure the cost of BI application development and deployment
- 50 percent plan to establish a BI center of excellence or BI competency center
Survey respondents have clearly indicated that they desire more knowledge workers have access to a “one version of the truth” source of information, and the ability to accelerate decisions for improved performance. Of best-in-class organizations, 83 percent have seen an increase in enterprise-wide use of BI applications vs. only 65 percent of industry average and 45 percent of laggard companies (the three categories we use based on financial results).
Of this best-in-class group, 90 percent receive access to information within a day of actual business activity, vs. 49 percent of industry average and 37 percent of laggard organizations. In essence, as companies strive to achieve better performance with the implementation of BI applications, they also experience widespread and faster user access to information.
Survey results show that the organizations enjoying best-in-class performance shared important characteristics in delivering actionable information to the enterprise:
- 32 percent of best-in-class organizations report a direct impact on revenue through increasing the number of people in the organization with relevant IT/BI skill sets. This is more than twice the rate of industry average companies (15 percent) and four times the rate of laggards (8 percent).
- 39 percent of best-in-class companies deliver actionable information to a majority of stakeholders via a self-service environment (eliminating the need for IT department intervention). This is almost twice the rate of Average (22 percent) and three times the rate of laggard companies (13 percent).
The technology and service enablers in which best-in-class organizations are planning to invest address BI skill set pressures, and align with a desire to measure project success. The interest in on-demand BI solutions is growing, particularly among best-in-class organizations that are improving implementation time-frames, on-budget completion, and cost-per-user metrics.
- Of best-in-class companies, 16 percent currently use BI software applications accessed through a third-party (for example, Software as a Service, Hosted, on-demand, hosted appliance). This is twice the rate of industry average and laggard companies.
- One-third (33 percent) of best-in-class survey respondents have plans to utilize on- demand BI solutions, 11 percent of whom state they plan to do this within the next 12 months.
- While 74 percent of best-in-class respondents who state they are currently using traditional on-site installed BI applications, only 14 percent plan to implement in the next 12 months, and only 12 percent plan to do this beyond 12 months.
Interestingly, many of the providers of on-demand BI are the very same companies that also provide traditional BI implementations (Business Objects, Cognos, Hyperion, SAS). If this alone does not legitimize the emergence of the on-demand approach within BI, there are also several new, smaller BI technology providers who are offering on-demand BI solutions as a pure-play business model, or delivery option (Dimensional Insight, LucidEra, Oco, OnDemandIQ, SeaTab). Many of these organizations are receiving venture funding at rates that would suggest a degree of excitement in the market, particularly in light of recent successes that on-demand approaches have taken within other business application sectors.
Perhaps most interesting is the breakdown of best-in-class organizations by company size. The assumption in the marketplace, as expressed by many of the vendors at both ends of the spectrum, is that on-demand BI is an approach reserved for the Mid-Tier and smaller organizations. According to the research, this is not so. Of the best-in-class companies currently or planning to adopt an on-demand BI approach, 40 percent are over $1 billion in size. A future report from Aberdeen Group will provide in-depth analysis of this delineation.
Enterprise-wide delivery of actionable information is the “nirvana” that Business Intelligence has promised since its inception. While this has not been achieved fully, new technologies, methodologies, and organizational approaches are bringing the possibility of “BI for all” closer to reality. Aberdeen research indicates that there are still significant hurdles to cross, strategies to adopt, and technologies and services to consider.
Best-in-class organizations are focusing their efforts on building the BI skill sets (business users) and data integration capabilities they need to deliver actionable information to the enterprise. The strategies they employ revolve around the establishment of training programs and cultural changes that move BI forward from a departmental or project-based activity, to an enterprise-wide business practice.
The importance of measuring project success in terms of timeliness and ROI are being placed at or near the top of the list of defining success. Additionally, the traditional methods for information delivery are showing signs of diminishing in favor of new approaches that promise greater efficiency, faster implementation, and lower overall cost. Finally, the on-demand BI approach appears to be gaining momentum, and despite popular belief, is not reserved for the mid-tier or smaller company.
About the Study
Aberdeen Group examined the delivery of actionable information to the enterprise, the experiences, and investment intentions of more than 280 enterprises. Respondents completed an online survey that included questions designed to determine:
- The degree to which BI is deployed within the organization
- The effectiveness of existing BI implementations
- Current and planned investment in BI technology
- The benefits, if any, that have been derived from BI initiatives
A free copy of the study can be downloaded by ESJ.com readers from the Aberdeen Group Web site.
- - -
Dave Hatch is research director of Aberdeen Group’s business intelligence practice, where he benchmarks user organizations’ BI strategies, actions, and planned technology investments. His research focuses on the collection, assembly, and delivery of information throughout the enterprise. Dave holds a BA in Communications from the University of Massachusetts.