Challenges in Implementing a Successful Business Intelligence Strategy - Literature review Example

Challenges in Implementing a Successful Business Intelligence Strategy Name Professor Date Challenges in Implementing a Successful Business Intelligence Strategy Introduction With the increase of competition in business arena, Business Intelligence strategy has drawn a lot of interest more so among the contemporary managers. Davenport, Harris & Morison argue that the interest has grown considerably as opinions indicate that Business Intelligence systems are critical elements of a contemporary business information infrastructure and contribute to competitiveness and success1. Wixom & Watson hold that they rapidly turn out to be the main focus, not just because of professionals handling the development of information systems, but also the executives focusing on integrating new tools so as to manage the business2. However, research has indicated that numerous BI strategies often fail because of various challenges. Therefore, this paper assesses challenges faced when implementing a successful Business Intelligence Strategy on existing business and even on new and upcoming business. To put this discussion into perspective, this paper will define Business Intelligence Strategy and provide over of the same. The assessment will use Holden Motor Company and Healthy Habits Fast Food Restaurant. Overview of Successful Business Intelligence Strategy Olszak & Ziemba define business Intelligence as conversion of the raw data into significant and valuable information for the purposes of business analysis3. They maintain that later on, Business Intelligence has been described broadly, as the uniting aspect of element of decision support infrastructure and offering wide-ranging information for the policy makers4. Therefore, several descriptions of Business Intelligence systems emphasizes on the ability of the business to enhance its efficiency and realize high business objectives. It is therefore claimed that Business Intelligence as a conception present, a method to acquire critical information to enhance strategic and thoughtful decisions hence plays a vital role in modern decision support systems. The flexibility of the contemporary Business Intelligence systems means that the success the execution needs basing the whole process on a solid foundation and established systematic theories. The theories are vital success factors which provide the basis for pointing the criteria that should guide the implementation. Olszak & Ziemba identified four major bases for Critical Success Factors including industry-based factors; industry position, geographical factors, and competitive strategy; environmental factors; and temporal factors5. However, successful implementation of business intelligence strategy faces a lot of challenges comprising of no well stated business problem, lack of support from the manager, inadequate business systems and capability knowledge, lack of business Intelligence system flexibility and surpassed Business Intelligence implementation budget among others. No well stated business problem Today, companies compete on strategies, and that are set according to business intelligence. To implement these strategies, managers analyze the data collected on why the company is not performing well and define those problems to find a solution. Defining a problem enables the management to know areas of weakness and rectify them. One of the existing businesses that have failed on business intelligence strategy based on undefined problem is Holden Motor Company. Robinson states that this Australian automobile, which has existed for as long as 19496. The company has failed because it has no well defined marketing problem. Many companies exist in the automobile industry, including Toyota, Honda, General Motors and Tata among others. Olszak & Ziemba argue that in this case the competition is very high and the company must define its marketing problems so as to get unique solutions which can be able to beat other market players starting from the domestic market to international market7. Critical business intelligence on marketing strategy must start with innovation, branding, differentiation, pricing, positioning and implementation itself. Without defining problems and solution of such marketing problems even implementation becomes very difficult because no one will believe your idea8. The problem is also observed mostly on the new and upcoming companies. For these companies, it is even worse because it could collapse of be acquired by another party or company. One case of such company is a Healthy Habit Sandwich bar. The company is a fast food company focusing on gourmet sandwiches. The company was new and had the potential to grow but the owner Katherine Sampson failed to define that she had the financial problem that was needed to run the restaurant. Smartcompany contends that Katherine planned to expand but could not execute such plans because of lack of funds and later sold the 80 percent of the business to Emirates Group to get funds to fund the business9. By defining the business problem, particularly the finance, she would have expanded healthy habits without selling some of the stake. Lack of support from the manager Olszak & Ziemba postulates that lack of support from the manager is also considered another challenge in implementing a successful business intelligence strategy10. The major key role in efficient strategy implementation is strategic management. Success mostly in strategy is not often easy to achieve without the manager’s support. Support comprise of leadership, skills, knowledge and resource allocation. In most cases the top managers have failed to lead from the front in implementation of business strategies instead they allocate that work to project managers. Managers are always people who are experienced about the market and their wealth of experience brings motivation and morale majorly when the team is stuck in one stage of the project. Watson & Wixom claim that unswerving support from business managers facilitate securing of the needed operating resources like skills, funding and any other necessities all through the implementation process11. Inadequate support from the executive is what has befallen Holden Motors for a very long time. The managers have been able to secure adequate skills and funds for the company. Olivia pines that the situation has led to delay of implementation of enterprise-wide scale which could have helped the company manage its data and business processes12. In 2013, the company announced it will stop its operations in 2017 following poor performance over the years. It was no different in Healthy Habits case. The managing director of the restaurant, Katherine Sampson had little knowledge and skills in management and marketing, and also had insufficient funds to outsource all these services 13. However, she failed to fund various business intelligence strategies such as operations, maintenance and expansion, and ultimately sold the business. Inadequate business systems and Capability Knowledge In the challenging business environment managers must bring on board experts and experience people how understand the system and the market. This will ensure that the process is not only done on framework of professionalism, but hope of positive results. According to Davenport, Harris & Morison this is proof that execution of the Business Intelligence strategy needs proper skills and knowledge for success14. A skilled project group, comprising of executives, staff and IT experts is needed to work on various aspects of business intelligence strategy project including IT, finance, supply chain, marketing and management. A higher degree of the team skills is often linked with success in project implementation. Watson & Wixom postulate when the company fails to hire qualified and experienced staff, it cannot collect, analyze data, draft and implement a good business intelligence strategy15. As the industry grows, performing well in the business intelligence takes both technical capabilities and skills together with an extensive frame of indication of the operation and how it is performed and measured16. The team also should have technical skill concerning the system. Such skills involve knowledge of ERP, Relational databases, Reporting software as well as analysis skills. Holden Motors has not been successful due to skill shortage of the management and employees to match that of other competitors such as Toyota, Tata, Honda and General Motors. The leadership of the company has also failed to inspire its employees to successful implementation of business intelligence, from product, marketing to sales. Similarly, case has also been reported in Healthy Habits. The manager did not have the skills and competences required to operate the business. Therefore, she hired a consultant and brand strategist to help provide the needed skills on renovation, branding and marketing. However, she failed to hire a financial expert to draft the operation budget and present financial position of the company. Lack of business Intelligence system flexibility Another challenge organizations face in the implementation of successful business intelligence strategies is the rigid systems that do not match the current systems. In that case, the company has to do away with the old systems and change to the new flexible system before implementing their strategies. Olivia posits that flexible systems in organizations have the capability of reducing the costs of operation or implementation of such strategies and also make the company adapt more rapidly and compete in the ever-changing circumstances17. Robinson affirmed that Holden faced tough times because it still had it old production machines which manufacture motor vehicle which consumes a lot of fuel. Its cars also pollutes the environment to a great extent18. It became so obvious that the company cannot compete with Toyota Motors which is currently trying to make fuel–efficient and environmental-friendly cars by the use of new technology. Also the new sandwich restaurant, healthy habits could not cope with established companies like Subways on flexible systems. Subways and McDonald’s currently run flexible menu comprising fatty fast foods and healthy foods. Conclusions The assessment has shown that application of a business Intelligence strategy often leads to success if the managers define the business problem, support and adequately fund systems to ensure that it is flexibly designed to meet the changing needs. On the other hand, the management must hire competent and skillful employees and create teams who can analyze a problem and provide specific solutions. Skilled employees who have exceptional business acumen are important because they will be able to forecast the challenges likely to face an organization and advice for change accordingly. The research offers an important lesson to managers of Holden Motors and Healthy Habits for their future management strategies. Bibliography Davenport, T. H, Harris, J. G & Morison, R, Analytics at work: Smarter decisions, better results, Boston, Harvard Business Pres, 2010. Olivia, T, Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy. Hoboken, N.J, Wiley & Sons, 2009. Olszak, C.M & Ziemba, E. Critical Success Factors for Implementing Business Intelligence Systems in Small and Medium Enterprises on the Example of Upper Silesia, Poland, Interdisciplinary Journal of Information, Knowledge, and Management, Vol. 7, 2012, pp.129-150. Smartcompany, Katherine Sampson: It's been hell, http://www.smartcompany.com.au/leadership/profiles/7974-katherine-sampson-its-been-hell.html 2014, (accessed 21 August 2014). Robinson, P, Autobiography: The inside story of Holden's all-new VE Commodore. Woolloomooloo, New South Wales, Focus Publishing, 2006. Watson, H.J & Wixom, B. H, The Current State of Business Intelligence, Computer, Vol. 40, No.9, 2009, pp. 96-104. Read More