Summary: Every day, businesses suffer from the effects of bad or outdated Business Intelligence. These outdated BI tools/practices waste precious time, harm decision-making, and keep these companies from truly taking advantage of their data. Fortunately, bad BI tools/processes display many warning signs. These warning signs will help alert you to a problem, and keep that problem from spiraling out of control. Do you notice any of these warning signs in your business?
How do you know? Outdated BI displays many warning signs. Unfortunately, many companies either ignore, or don’t recognize these signs. Maybe they don’t like change. Maybe they don’t realize there’s a better way. Whatever the reasons, ignoring these warning signs will ultimately lead to larger problems.
So, what are these warning signs? How can you know if your company’s BI needs an overhaul? While the list could certainly be longer, here are 7 warning signs that you’re dealing with outdated BI:
1. BI is still an IT function
In the past, IT departments controlled the BI and reporting efforts. After all, creating reports and BI apps required a fair amount of technical knowledge.
These days, that’s not the case. With the rise of self-service BI software, reporting and BI tasks should no longer be limited to the IT department.
Unfortunately, many businesses haven’t received the memo. As explained below, this is a huge warning sign that your BI efforts need an overhaul.
“[It’s a warning sign if] the IT team owns the BI environment and changing the system(s) is time-consuming and costly,” says Chris Mele, Co-founder and Managing Partner of Software Pricing Partners.
2. Business departments have adopted their own solutionsLet’s take the last point one step further. What happens when BI runs through a single department?
It moves slowly.
What happens when business users can’t get the data or reports they need because they’re waiting around on the IT department?
They find their own solutions. As explained below, when business departments start adopting their own solutions (or start using Excel as a BI tool), it’s a big warning sign.
“Because the official BI environment is slow to respond to new requests, business groups have developed their own departmental solutions using whatever desktop tools they can procure,” explains Mele. “Sometimes it’s Excel and Microsoft Access. In other places, some limited licenses of the latest visualization tools, such as Tableau, are utilized. But there’s no cross-departmental sharing of this information and the quality and consistency is typically an issue. We call this Shadow IT and it’s a flashing-red light that your BI environment isn’t keeping up with your business needs.”
3. Different managers use different data sets
Let’s take the last point one step further. What happens when different departments rely on their own tools, or depend on Excel for BI? Or, what happens when you don’t have a central repository for your data?
When this happens, you’ll find multiple “versions of truth” across different departments. Everyone is working with slightly different data.
“Another red flag is that individual area managers create reports from different data sets,” says Eliza Barry, Marketing Director at Amata Solutions. “This can lead to skewed numbers and a lack of oversight, which can be downright dangerous when it comes to various compliance concerns. If managers are to create reports, they should be able to use a central data repository and it should be easy to utilize various calculations across areas or departments.”
This is especially dangerous when users rely on spreadsheet programs (like Excel) for BI. Not only are they using different data, spreadsheets are prone to errors. One study found that 88% of spreadsheets contained serious errors.
That’s just the tip of the iceberg. I don’t have time to cover all of the problems associated with spreadsheet overuse in this article, but it’s a topic I’ve covered in the past. You can read more here: 7 dangers of spreadsheet overuse (part 1) and 5 more dangers of spreadsheet overuse (part 2).
4. Getting information is a big dealLet me ask you a question: How quickly can you get the information you need? Suppose your CEO asked to see sales by product, month, and region over the past 5 years. How quickly will that report get to them?
If the answer is anything more than “a few minutes”, there’s a problem. In today’s business world, speed is the name of the game. If your business leaders are stuck waiting around on data, you’ll quickly fall behind.
“A huge red flag for companies is if there is a long lag time to get information that should be easily brought up during a meeting,” says Barry. “For example, if you need to plan to wait a week for the analytics team to get quarter over quarter profits for the last 2 years, that is much too long. Another red flag are performance meetings that have no data associated with them across departments. If your sales team has metrics, everyone should have them to measure direct progress toward a specific goal.”
5. Your BI relies on manual processesBusiness Intelligence is only as good as the data behind it. BI that delivers old (or inaccurate) data is worse than not having BI in the first place.
The problem is, most data is not formatted correctly for use with a BI tool. Businesses are surprised when they realize they can’t just place BI software over their existing data and immediately start creating reports. The data must first be consolidated in one place and formatted for the BI tool.
As a result, many businesses resort to manual processes to meet this need. I knew of one company that had an employee devote half of his time to manually extracting data into Excel and preparing it for reporting. Unfortunately, this is an all too common practice.
The problem is, this process not only wastes time, it leads to data errors. Do you really want to base business decisions on data that was gathered manually?
These days, modern BI tools should automate your data collection and formatting. If this is a process you’re still handling manually, it’s time to look for new options.
6. It doesn’t offer customizable dashboards and reports
In the past, dashboards and reports weren’t usually customizable. They often displayed a pre-determined set of metrics in a pre-set layout.
For instance, a sales dashboard might display metrics like daily/monthly product sales, geographical sales numbers, top customers, and salesperson performance, to name a few. If one sales manager needed additional metrics, or metrics that differ from the other sales manager’s dashboards, they run into problems. They must either create a brand new dashboard themselves, or request a new dashboard from the IT department.
“If your business intelligence software doesn’t allow you to customize your dashboard or your reports, it is probably pretty outdated,” explains Jenna Erickson, Marketing Manager at Codal. “On newer BI tools, reports should be completely automated, as there should be little-to-no manual work when you need a report. You should also be able to customize your dashboard, it should have a user-friendly interface, and should consolidate data from many different channels. The point of a dashboard is to easily digest information, very quickly, and if it isn’t doing that for you, it’s time to make the switch to a new tool.”
Modern BI tools address this problem. The IT department creates a single dashboard and lets each user customize their data as necessary. It’s the best of both worlds: Users get their own customizable dashboards, and IT isn’t constantly creating different dashboards for different users.
7. Your BI is only reactiveWhat is Business Intelligence? For many, it’s just data visualization and reporting. It helps theym understand their data and make more informed decisions.
But, modern BI can (and should) be so much more. These days, BI can become proactive, once you start using data as a trigger.
For instance, what if your BI software sent automated alerts when unusual changes in data occurred? In the event that data changes dramatically (for the good or bad), wouldn’t you want to know about it?
Let me ask you a question: Is your BI reactive or proactive? Can it alert you to problems as they happen? Can it use data to trigger automated events? If not, this is a sign that your BI is falling behind.
These are just a few warning signs of outdated BI, but there’s plenty more to cover on the topic. Would you add anything to this list? Feel free to comment below!