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Q&A: New Book Looks Closely at Value of BI, Big Data

With exclusive survey data and case studies, well-known analyst Cindi Howson shows how highly successful companies are deploying BI for competitive advantage.

"From an organizational point of view, company culture is one of the two biggest factors that can hold companies back in BI," says BI analyst Cindi Howson. In her new book, Successful Business Intelligence: Unlock the Value of BI and Big Data, she discusses why that is and how companies can work toward a culture that fosters successful BI. In this interview, the first of two parts, Howson discusses some of the factors that distinguish the use of BI at highly successful companies, including the importance of culture and incentives.

With 20 years of experience in business intelligence and management information systems, Cindi Howson is the founder of BI Scorecard, which advises clients on BI strategy and tool selections. Her site, BIScorecard.com, provides independent research and product reviews of BI software. Her latest edition builds on her 2008 book, Successful Business Intelligence: Secrets to Making BI a Killer App. Howson is a TDWI faculty member and writes and blogs for TDWI.

BI This Week: What's different with your new book, Successful Business Intelligence: Unlock the Value of BI & Big Data, compared to the first version? The earlier book came out six years ago, which is a long time in the technology space.

Cindi Howson: This new book asks the same question the first book did: Why are some companies successful with BI while others don't achieve the full vision? There are very few actual failures, but the question is: What's holding companies back from achieving a big impact with BI?

The framework and the mindset behind [the new edition] is the same. We examine both technology and organizational factors and look at different measures of success. We also again use a survey to see what's changed in terms of BI adoption, impact, and so on, and to again measure the importance of certain factors.

We have some new case studies and updates to the original ones. In the first book, Dow Chemical Company was a great case study, as was 1-800 Contacts, and Emergency Medical Associates. Those case studies have been updated as we follow along on their BI journey. There are also some new companies, such as Netflix, Medtronic -- a medical device maker -- and Constant Contact, and I love the Learning Circle example -- they are using BI in education to really make the world a better place.

From a technology point of view, a lot of technologies didn't even exist in 2007. The iPad didn't exist, so we look at the role of mobile computing. Hadoop was in its very early development phases, so we look at the role of big data and the cloud in a number of these case studies.

What organizational changes impacting BI have occurred over the last several years specific to some of those companies?

Organizationally for many of these companies, there have been big changes in the business environment. Mergers and acquisitions have had a huge impact on how companies manage their BI programs.

Dow is an interesting example. I got my start in BI there back in the early 1990s when Dow had a custom-developed data warehouse. They had a lot of joint ventures coming on line and needed a more flexible solution, so they were looking at re-architecting their entire data warehouse environment. That was a good time to assess whether should they be using SAP-BW [SAP Business Information Warehouse]; they decided not to. At the same time, they acquired Rohm and Haas, which was using SAP-BW extensively. That, in turn, caused them to pause and re-evaluate whether they were making the right decision.

Any time there's an exogenous event like that, it forces companies to really reassess whether they're leveraging technology the way they should be, or whether there's a better way of doing things.

Medtronic is another good example of the effect of organizational changes. Medtronic is really about making sure that customers -- who are really patients in the end -- who are using their devices have everything working as it should be. If there is any concern, Medtronic has a huge comments database that customers can access. Medtronic also has a new CIO who brings a culture of innovation -- which brings me to another difference in the new edition, which is culture....

Yes, what is the effect of company culture on BI success? You talk in the book about the importance of an "analytic culture."

Culture is another big change in the new book. In the first book, I talked about it a little bit more as a contributing factor. We've now moved culture front and center; it's one of the first organizational issues that we discuss. Culture is about fostering an analytic culture; we also discuss the huge role that leadership plays. Leadership means not just the CIO but also the CEO, the lines of business, the COO, and the VP of marketing. Culture and leadership are closely related, and it's hard to separate one from the other.

In the book, I write about Facebook, with Mark Zuckerberg showing up on Wall Street in a classic hoody sweatshirt – that is reflective of his company's culture, which is so very different from the banking industry.

How important is company culture in BI success, and has that always been true?

Culture has always played a role, but I think it's now one of the biggest factors that can hold companies back in BI from an organizational point of view. There are several factors at work there, but I certainly think culture is one of the biggest. Often, companies have a lot of data, and certainly they value the data, but there is sometimes a fear of sharing it. Once you start exposing the data, somebody's job might be on the line, or it can show that someone made some bad decisions. Maybe the data will reveal that you've spent millions of dollars and you're not really getting the returns that you thought you would in pursuing a particular market segment or product.

It's very hard when you start exposing those things; that's always been a problem. That's true in two world-renowned case studies I often mention. The first is the space shuttle Challenger, which we studied in business school as a case study about errors in decision-making. In fact, the data was there to say that the O-rings weren't going to stand up to the cold temperature during the launch that morning. The data was there, but it was deeply buried because of fears of losing funding and things like that. The same thing was true with the BP oil spill -- the data was there. Although there is some argument about who the prime contractor and sub-contractor were -- but the data was there saying that there was a problem with the pressure on one of the gauges.

If data is more freely available and it's used appropriately, it can certainly help the decision process. This is where the Learning Circle, a company in public education that I profiled, is a great example. If data is used to punish, that's a problem. The Learning Circle had data on a certain class of students that was performing great [with one teacher] and not so well with another teacher. They knew it wasn't the students that were a problem, it was something about the teaching method. If you have a culture where a principal or superintendent is going to sit down and say that you're going to be fired unless you turn that around, nobody is going to share the data. They're going to do everything they can to discredit the data. In the worst circumstances, they will manipulate the data.

What if you look at the data from a different point of view, and instead say, "Here's what it's showing us. What are we doing differently in terms of teaching methods that's either working or not working?" Then you have a chance to improve that metric, which is the ultimate goal.

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