I recently read a discussion from the CIOs.com: Chief Information Officer Network group on LinkedIn called What’s missing from Business Intelligence? (Please note you will need to have a LinkedIn account and be a member of this group to view the discussion for yourself)

The conversation was kicked off with a claim that 54% of organizations do not realize the desired benefits from the Business Intelligence (BI) solutions they have implemented. The community was polled for their plans to overcome the common business and technical challenges of BI implementation and their thoughts on what’s missing from BI.

Having been a part of several large IT initiatives that have both succeeded and failed, I had my own ideas about the cause of BI failures. I have found it is easy for people to get so caught up in the features and functionality of the system being implemented, that they lose sight of the purpose for which the system is being implemented in the first place.

What Are You Trying to Accomplish?

A perfect example of this can be seen in this blog post where the author was approached by several different people at a conference asking for his advice on choosing a vendor for a Master Data Management (MDM) solution. In his words (paraphrased a bit), each request went something like this:

Which MDM vendor should I choose?

What are you trying to accomplish?

<Some conversation about features and functionality>

So, what are your priorities?

We know we need MDM, but our company hasn’t really decided what MDM is. Since we’re already a [Microsoft/IBM/SAP/Oracle/SAS] shop, we just thought we’d buy their product…so what do you think of their product?

This scenario perfectly illustrates what I have seen in IT failures. There seems to be a sincere belief that success can be achieved with the right vendor or set of technological features without first figuring out what you’re doing or why you’re doing it or what it really means to the company’s mission, purpose, and strategy.

Now, back to our LinkedIn discussion.

I felt the topic of “What’s Missing From Business Intelligence” was a perfect opportunity for a technology-centric conversation. I was sure there would be lots of comments about the must-have features and cutting-edge technology. I wondered how many comments there would be before anyone spoke to the business purpose and strategy side.

Intelligence First

To my surprise (and much to my pleasure I might add) it wasn’t long before I saw comments that spoke about the need to understand what you’re trying to accomplish from a business perspective before you can hope to be successful with BI technology. One comment by Carol Rizzo came early in the discussion and really set the tone for future comments. Here is what she had to say:

In my opinion, there are no tools that can provide insight if you do not know which questions to ask, and cannot identify which information/data is relevant to getting you the answers, or what you might do differently if you had the information. This may today be called BI, but the same issues exist in CRM and previously in EIS (Executive Information Systems).

Call me old fashioned, but I have built realtime information systems for traders. They don’t know the answer but they generally have a good idea of what data is in the mix and what patterns or ranges or contrarian behavior they need to see in order to make good decisions and change their strategy or know when their strategy is beginning to fail.

Sometimes, I think we fail to look at the obvious. If you don’t know the question and which data is key, how can you possibly get the benefit of any business information system. As anyone who has built an expert system will tell you, you model how people make decisions… what information they use and what are the triggers for either gathering additional information or making a decision. YOU NEED THE INTELLIGENCE FIRST!

Respectfully…

“Intelligence first”…I like that!

It’s BI…not AI

Another excellent comment came from Patrick Walker , who explained how some business users may have unrealistic expectations of what BI is and what it can do. Here is what he had to say:

I have worked fairly intensely with corporations on creating “Business Intelligence” systems from the old DSS environments through ERP and CRM into Knowledge Management and differing hybrids.

From this understanding, the problem that I most often face is that the Business seems to have a differing perspective to BI than the technology industry. The business user’s perspective is closer to the perception of “Artificial Intelligence” being BI than just the ability of a system to crunch numbers, scenarios and what-if statements.

Quote from Dr. Mark Humphrys, University of Edinburgh

What is AI? In some sense it is engineering inspired by biology. We look at animals, we look at humans and we want to be able to build machines that do what they do. We want machines to be able to learn in the way that they learn, to speak, to reason and eventually to have consciousness.

Therefore the business user is looking for BI to be informative about what does the business need to know, rather than the business asking the question.

BI for the business seems to mean “Tell me something”, I shouldn’t have to ask, where my profit losers are, and the systems should tell me when it happens and why.

The business seems to want a system where it, the business, doesn’t have to programme the information or knowledge, just the raw data and the knowledge and information and how to use them are magically produced by the system. We dot think, the machine does it for us.

Therefore, until we can explain to the business that BI is a co-operative, symbiotic relationship where business needs to provide as much intelligence and the system will produce improved intelligence,there will never be a happy understanding of BI and it will always fall short from a business perspective.

Summary

So, how do you succeed at Business Intelligence? Start with the business (purpose, mission, strategy, etch.), add intelligence and stir. Seriously though, if you are considering implementing BI, consider the following before discussing tools and technology:

• Define your questions – What are the strategic decisions in your business that you need to be smarter about? What questions, if answered, would make those decisions better?
• Define your action – What would you do differently if you had the answer to your question? You can’t expect to gain business value from a BI initiative if you don’t plan to take action based on the knowledge you gain.
• Identify the data needed to answer questions – Resist the temptation to begin a BI initiative data-first. Start with the questions and then identify the data that will be helpful in finding the answers because…
• “Business Intelligence” is not “Artificial Intelligence” – Don’t expect to simply throw raw data at BI tools and have them “tell me something”. Manage business user expectations accordingly.

Now it’s your turn. What has been your experience in implementing Business Intelligence? What helped your success? What was the cause of failure? What would you do differently if you had to do it over? Please share your experience and reactions in the comments area.

Do you consider the role of the CIO as focusing on creating value through technology, or first and foremost running an efficient IT shop?

This is the question that was posed to a CIO discussion group on LinkedIn. The discussion was extremely lively and there were tons of insightful, intelligent responses favoring both sides of the question. Below is my take on these responses and my reaction to them.

Core IT First, Add Value Second

Many replied that a CIO must focus on running an efficient IT shop FIRST, or else he/she will never have the credibility and trust with the other C-Suite executives and board members to get approval for “value add” activities. There is some truth to this statement. Certainly credibility can be damaged if users are constantly frustrated with unreliable systems and poor support. However, generating business value through technology is not some lofty goal that can only be achieved AFTER core IT processes are perfected. On the contrary, business value should be the driver for all IT activities. For example, suppose some IT systems supporting complex, unique back-office functionality are not running smoothly. A lot of time and energy can be expended focusing on getting these systems to run smoothly. A focus on business value allows a CIO to evaluate the business processes themselves and not just the IT systems that support them. If these unique processes are not differentiators for the business, business value can be generated by simplifying and standardizing these complex processes instead of supporting them with complex IT solutions. Of course, that same CIO will need to be equipped with some good communication and persuasion skills in order to convince some IT consumers within the business to part ways with these pet processes.

CIO Is Strategic, Managers Are Operational

Many comments stressed generating business value through technology as the most important job of the CIO. Many commenters agreed that the business value-focused CIO should delegate operational aspects of IT to a capable operations manager. In other words, the “real” job of the CIO is to generate value for the business through technology while day-to-day operations are a distraction. While I agree the “real” job of the CIO is to generate value for the business, I disagree that the CIO gets to have all the fun! Generating value for the business is everyone’s job – not just C-Suite executives. The next great innovative idea to reach new customers, offer new products, or expand to new geographies may exist in the mind of someone lower in the organization than the executive level. It would be a shame for the business to lose out on these great ideas because the CIO is a “business value hog”.

The Conflict Resolved

Because of the way the question was posed, many of the responses favored one side or the other. Some commenters recognized this fact and pointed out that the question is really a false dichotomy. Many agreed that running an efficient IT shop and generating value for the business through technology are harmonious goals that need not be placed at odds with each other. Running an efficient IT shop generates value. If you truly focus on business value, you will not ignore running your IT shop smoothly. Although the question may not have been perfect, it was good to see so many willing to take a step back and exchange ideas on IT leadership.

Now it’s your turn.

What do you think should be the primary focus of a CIO?

In a recent blog post, Andrew McAfee suggests a model for developing superior business processes may have been discovered in the world of chess.

In 1997, IBM created a computer that was able to beat the world champion Garry Kasparov for the first time and it only cost them $10 million to do it! Today, because of computing advances, commercially available chess programs running on standard hardware can consistently beat even the best human players. The cold, calculating precision of the machine is just too much for the human player.

Our deep-rooted mistrust of the coldness of machines prohibits us from turning over our most trusted decision-making to them. In the 2004 movie I, Robot, Will Smith’s character, Detective Del Spooner expresses this sentiment while describing an incident where he was rescued from a sinking automobile by a robot. The robot decided to save the detective instead of a young girl in the same situation based on a calculation of chance of survival. Regarding the girl’s low chance of survival compared to his own, Spooner says:

11% is more than enough. A human being would have known that.

Is there any reconciliation between man and machine? Surprisingly, McAfee points to recent research that a partnership between man and machine is not only possible, but may be the most powerful combination available. In chess competitions allowing any combination of humans and machines, it was found that a human plus a weak laptop were able to consistently beat even the strongest computers.

McAfee’s post is fascinating and worth a read. I encourage you to check it out.

Did Garry Kasparov Stumble Into a New Business Process Model?

So what do you think? Is it possible for humans to embrace a partnership with computers?

I’ve recently been introduced to a useful tool that helps me make better decisions based on business strategy and value. The great thing about this tool is you don’t have to be a manager or executive in order to use it. People at every level of an organization make decisions in their day-to-day activities that can have profound effect on organizational success. This tool is called the Purpose Alignment Model and it was created by CIO Niel Nickolaisen. Using this model, teams can discover the purpose and strategy of their overall organization, and then make decisions based on that purpose.

The Purpose Alignment Model

The model consists of two axes with regions divided into four quadrants. First, the “‘market differentiating” axis displays the degree to which a particular activity differentiates you in the marketplace. In other words, this activity helps you gain market share. These are the things that make you “different” or “special”. The second axis is the degree to which activities are mission critical. In other words, while they don’t help you gain market share, these activities are important and the business will be put at risk if they are not done well.

About the Quadrants

• The highly differentiating, highly mission critical activities are the truly differentiating activities of the organization. These are the activities where the organization needs to excel and innovate and be the best. Creativity and experimentation in tactics and analytics to measure the success of these activities should abound in this quadrant.
• The highly mission critical, low differentiating activities are “parity” activities. While these activities are highly valuable to the organization, they do not derive their value from being unique or special. On the contrary, these activities derive value from adhering to industry best practices and standards and being simplified as much as possible.
• Highly differentiating activities that are not mission critical require some thought to determine if they should be taken on or not. These are opportunities to partner with another entity to add this capability and eventually move it into the “differentiating” quadrant.
• Finally, anything that doesn’t differentiate you and isn’t mission critical is something you should stop doing.

Applying the Model

The first thing you have to do is determine the one or two things you do that are truly differentiating for your organization. Yes, it will be only one or two things. You can’t be the best at everything.

The next thing you do is find out where your activities fit into the model and agree to treat them accordingly. Don’t be disheartened that a lot of activities fall into the “parity” quadrant. Just understand that simplifying and standardizing parity activities will free capacity for you to use your creativity to excel at your differentiating areas.

More Information

I’ve just provided a brief introduction to this model here and I highly recommend the following resources for more information.

Breaking the Project Management Triangle – InformIT article

Four Things a CIO Can Do To Deliver Immediate Business Value – Video presentation hosted on on24.com. Requires registration with an email address to view. It is about 50 minutes in length but very entertaining. This is the only place I know of where this presentation can be viewed. I searched for a YouTube version with no luck.

What do you think of Nickolaisen’s model? In what ways do you think it might help your organization make better decisions? Do you disagree with the model? Do you think I need art lessons? Please feel free to share and comment.

As a database developer, I normally focus on data structures and code, and not on database administration. Recently, I worked on a small project where I had to take on the database administration role as well. As such, the project reached a point where I had to make a backup of the data mart I had built. Later on, at lunch, I shared the experience with another developer friend.

Me: I just backed up a database.

Friend: How did you make sure the database was in a consistent state – or whatever it is? I hear that’s really difficult.

Me: I shut down the database.

Friend: Oh, then you cheated.

Me: How is that cheating?

Friend: What if the database had to be available 24×7? Then you’d have to take the backup with the database running – and that’s more difficult.

Me: But my database doesn’t need to be up 24×7. I have two users. I told both of them the database would be unavailable for a little while and had it back up in about fifteen minutes. No big deal.

The point my friend was trying to make was that if I had taken a hot backup, I would have learned a new marketable skill. I’m all for gaining new skills and always looking for opportunities to learn new things. However, I don’t believe in unnecessarily complicating a process in order to do so.

In this particular case, it wasn’t necessary for the database to run 24×7, so I shut it down to take a backup. If the database did need to be up 24×7, I would have taken a hot backup. Even in that case, I wouldn’t invent a hot backup process unless it was absolutely necessary. Most likely, I would consult the documentation and user forums of the particular database engine to mimic a procedure or best practice created by someone else.

In a classroom setting, using the easiest techniques or copying someone else’s solution may be considered cheating. If these practices are still considered cheating in business, then I will cheat whenever possible.

I don’t play golf, but I recently heard a golf-related anecdote I felt was worth sharing.

Prior to taking his shot, an avid golfer pulls out a fancy (and no doubt expensive) GPS unit and proceeds to calculate the exact distance to the hole. “Hmm. Is this accurate?”, he says, and then searches for the nearest distance marker as a quick calibration. After convincing himself he now knew the exact distance from his position to the hole, he began deliberating over which club to use. “Should I use the 6 or the 9?”, he asked his opponent.

Exasperated, his opponent said “you should just hit the ball!”

Finally, after selecting a club, the man walks over to his ball, waggles a bit, and swings. Pow! Straight into the trees and nowhere near the hole.

“You see! You should have just hit the ball. You’re not that good.”

Information Overkill

In this case, knowing the exact distance to the hole, or exactly the right club to use, made no difference to our golfer because he lacked the skill to consistently hit the ball in the intended direction. Instead of being concerned with high tech devices and the accuracy of his information, he would have been better served by practice – hitting the ball.

Personal Lesson

After hearing this story, I had to laugh at myself. When I decided to start this blog, one of the things I was sure of was that I would use web analytics and data to monitor its performance. I spent a lot of time making sure all of the technical aspects were in place. I created a Google Analytics account and added the java script tags. As I made tweaks to my site, I visited my analytics dashboard to make sure it was registering my activity. I then thought I should add filters on the IP addresses I normally use to access the blog so my activity doesn’t taint the results. Let’s see, there’s this computer, that computer, this work station I use sometimes, and what about my mobile device? Can I filter my phone from the analytics report? How do I identify my IP address? Do I need to contact my wireless provider?

I was really excited about the upcoming launch of my blog and was telling people about it. “Soon” I would answer when friends asked when the blog would be launched. Finally, my wife asked, “When are you going to post something?” It was then I realized my blog wasn’t going to ever be launched if I didn’t start actually doing the activity of blogging! I put my analytics activities on hold from that point and shifted focus to writing ideas.

Data Measures Performance…So Perform First

Don’t get me wrong. I believe in the importance of using data to improve performance. This blog isn’t called “The Data Whisperer” for nothing! I just realize from the story of our golfer friend and from my own experience, that data – no matter how sophisticated and accurate – cannot improve performance that is not built on actions that are consistently and correctly executed. Focus on hitting the ball straight before you worry yourself with accurate distance data. Focus on generating content, attracting an audience and building community around ideas before you worry about the accuracy of your web analytics!

Just hit the ball!

Now it’s your turn. Can you recall a time when you got caught up with the accuracy of information before establishing the correct actions? What did you do to get back on track? Do you still need to get on track?

Suppose you have a software development project that will take you one year to complete. What if you broke the work up into two projects of six months each? Which approach would be better? Would it make a difference? What if you broke the work up into four three-month projects? What about six two-month projects? I could go on, but you get the point.

If you’re like me, you may be thinking “what difference does it make as long as the software gets developed?” If so, keep reading. You may just change your mind.

Getting Smarter

If you execute the software development effort as a single project, you have to wait twelve months before your product gets into the hands of the users. For twelve months, you will have developed software without the benefit of the one thing that only users can give you…feedback. Breaking the project up into smaller projects allows you to have the benefit of user feedback from previous “chunks” with each successive “chunk”. Feedback is essential to learning. Smaller projects means shorter feedback cycles which means faster learning. In other words, you get smarter! Longer projects…well, now the title of this post makes sense!

Lessons Behind the Wheel

Still not convinced? Imagine you’re learning to drive a car. Maybe you over-steer. Perhaps you drift out of your lane and hear the “bump, bump, bump” of your tires rolling over the road reflectors. Whatever you do, you’re probably getting immediate feedback – probably from the screaming person in the passenger seat! Now, imagine trying to learn how to drive if you had to preset all of your acceleration, steering, braking and turning moves ahead of time – say for twenty moves at a time. Few automobiles would survive long enough for anyone to learn how to drive.

Start Small for Big Results

I admit I am no expert on agile software development methodologies, but isn’t delivering working software on short schedules one of the core principles? If so, it would appear that agile software development supports faster learning. You may not be ready to jump in and adopt an agile methodology, and that’s okay. But why not look at the next software project you have to plan and look for a way to deliver it in two shorter parts instead of one long part? It’s a step in the right direction and if you learn from the experience, you can try to go for even shorter cycles.

What about you? Do you plan to apply agile techniques to your software development? Have you already adopted agile? Do you think going agile might make you and your organization smarter?

After experiencing some success implementing lean “Six Sigma” practices on their own, a manufacturer of audio cassette tapes called in some outside help to take their process improvements to the next level.  The consulting engineer was no stranger to this process and diligently went to work.  He observed the operation, consulted with key staff, and before long, mapped out his customer’s processes and completed his work with detailed documentation of the sources of waste and corrective action plans.  As he reviewed his findings, the engineer couldn’t help noticing his customer’s excitement at the potential efficiencies he would gain and the money he would save!  Finally, after reassuring his client the efficiency gains and money savings were real and attainable, he hesitantly asked…

• How does my organization provide value to its customers?
• How does the technology I provide or maintain directly benefit our customers?
• How can the technology I support or provide incresase the value provided to our customers?
• What technology would benefit our customers the most if only it existed?

The first step in mastering anything is to get a firm grasp of what the thing is. For this reason, I felt it would be fitting to begin this blog, which primarily deals with data, with a few definitions related to data.

Data

What is this thing we call data? We deal with it every day, but how do we define it? Wikipedia defines data as follows:

The term data means groups of information that represent the qualitative or quantitative attributes of a variable or set of variables. Data (plural of “datum”, which is seldom used) are typically the results of measurements and can be the basis of graphs, images, or observations of a set of variables. Data are often viewed as the lowest level of abstraction from which information and knowledge are derived.

For me, this definition is a good start, but I crave something simpler for a working definition. Data are facts about things that can be observed or measured, recorded outside of the context where they naturally occur. In other words, data are facts without context. Examples of data would be 120 pounds, $33.57, blue, or the answer to the ultimate question of life, the universe, and everything when the ultimate question is unknown (if it is even knowable at all)!

One of the things I do like about the Wikipedia definition is that it states data are the basis from which information and knowledge are derived. This leads to another question. What is information?

Information

If data are facts taken out of context, and information is derived from data, then a definition of information is: data placed into context. But wait, the facts were already in context before we messed with them in the first place! Aren’t we just going in circles? Not really. By taking the facts out of context and then putting them into context we can assemble the data in many different ways to reveal relationships and interactions that may not have been visible in the original context.

Knowledge

Now that we have working definitions of data and information, what is knowledge? How is knowledge different from information? I found this concept to be a bit trickier and required a little more thought to come up with something satisfying. Information puts facts into context…when where how what why and by whom. How does information become knowledge? Since knowlege is something you know, information has to get into someone’s head before it can become knowledge. So perhaps we need to understand what it means to know something and then we can figure out how to structure information so it helps people achieve this state of knowing.

A friend of mine once made this statement to me about knowledge. He said “If you really know something, you can draw a picture of it.” As I contemplated this statement, my mind went to the whiteboard in my office and the many others like them in my coworkers offices. Each one had scribblings and visual representations of various concepts. I saw a lot of truth in what my friend was saying, but I would still refine the definition a bit. I would replace “draw a picture” with “model”. A drawing is only one type of model. While knowledge can be visually modeled in a diagram, map, or chart, it can also be modeled by a document, recipe or actions as well. A model – any type of model – serves to communicate knowledge from person to person. So, if information is to be transformed into knowledge, it must be assembled into a communicable model of something knowable.

Wisdom

If you’re fortunate enough to derive knowledge from data, the knowledge you gain is only as good as what you do with it. To me, wisdom is simply knowing and doing the right thing at the right time.

Summary

Data are facts out of context.
Information is data placed into context.
Information cannot be assembled directly into knowledge, but it can be assembled into a model to communicate something knowable.
Wisdom is knowing and doing the right thing at the right time.

Now it’s your turn. Which definition will be most useful to you in your life and work? Which definitions can be improved and how? Where did I totally miss the boat?

The best way to enter a swimming pool is to jump in, so Hello world! The Data Whisperer is now online!