The Profit Impact of Business Intelligence

These macro-categories have different growth rates, different leading brands,

What we see in Table 7-3 is that BI opportunities can be segmented into three major business process categories: management processes, revenue generation processes, and operating processes. Within these major business process categories, proven BI opportunities are aligned with key business subprocesses, such as forecasting, customer segmentation,

“If we change Process A by adding this specific business information and performing this specific business analysis to support this specific decision, we will be able to improve profit by X % or $X million.” Before investing capital to build and deploy a given BI increment, companies would be well served to examine such hypotheses in detail.

Strategic applications result in competitive advantage to first movers and early adopters. The classic example is revenue optimization applications developed in high fixed-asset businesses such as the commercial aviation and hotel industries.

successful organizations can be distinguished by their ability to leverage IT capabilities to transform their businesses (structures, processes, and roles) to obtain powerful sources of competitive advantage in the marketplace.” —John Henderson and N. Venkatraman, Center for Information Systems

and how it would generate the incremental revenue and/or reduced costs from the BI-driven process change.

The maturity and characteristics of the target technical environment affect the cost, schedule, and technical risk for a given BI initiative, and thus they affect ROI.

In the IT world, a platform provides a set of IT functional capabilities that in themselves do not solve a particular business challenge.

In addition to lacking cost information, the organization also lacks the information to systematically, consistently, and routinely perform fundamental operations management tradeoffs between asset levels, costs, process times, quality, service, outputs, and backlogs.