Using BI to Emerge from the Crisis Leaner and Stronger

Often overlooked during an economic downturn when all eyes are focused on the budget is the role that technology investments can play in making the company a stronger, more competitive entity. Andrew Brust, chief of new technology for twentysix New York, a leading business and technology consultancy, discusses how BI can help a company realize both short-term and long-term gains.

WFS: How can BI help financial services companies during an economic downturn?

Brust: The foremost reason to invest in BI during economically leaner times is that BI projects derive value from existing operational systems and their transactional databases. Building new operational systems involves actual software development costs, of course, but often also incurs training costs and changes to business procedures that can be too disruptive for companies trying to weather a tougher economy. BI systems, meanwhile, add enormous value to existing systems and their databases, which helps realize greater returns on the initial investment in those very systems.

In the specific market environment that financial services companies find themselves in today, BI’s value cannot be overstated. Scorecards, dashboards, and flexible analytics allow firms to gauge and manage risk and performance far better than with the typical rudimentary reporting capabilities of many operational systems. In today’s environment, it’s not enough to act or rest on “hunch;” you’ve got to know, in a precise and immediate fashion, how your business is doing and how assets are performing. Running your business without BI is a little like driving without a speedometer or mirrors, and trying to guess your speed and position relative to other drivers.

WFS: Explain the foundational benefits.

Brust: Today’s BI technologies allow organizations to inject added rigor into how they operate and react to changes in performance and external events. Whether it be the addition of relatively informal analytics and alerts or the full-fledged implementation of the Balanced Scorecard methodology and other proven Performance Measurement techniques, Microsoft BI technology delivers the tools necessary.

WFS: The credit crisis showed us that data is not enough. It needs to be meaningful, actionable, and in the hands of the right individuals. What is your advice on data governance and on minimizing risk exposure?

Brust: Raw data, and even the more refined summarization of it derived from relational database reporting leaves the consumer of that data in the position of having to add their own analysis and interpretation to make the data relevant to decision making. BI eliminates much of this hard work. By storing data in pre-aggregated form and allowing very fast dimensional analysis of that data by, for example, asset class, portfolio, counterparty or fiscal period, BI makes data instantly more digestible. BI consumers, be they executives, analysts or traders, agents, and managers, can instantly see what’s performing well, or where trouble spots lie, then do relatively painless root-cause analysis to find and replicate winning strategies and fix the problems.

WFS: Define some of the key challenges to realizing the end goals of BI and walk us through how best to overcome these challenges.

Brust: Before implementing BI initiatives, customers need to know, for their business or business units, what indicators need to be monitored, managed and forecasted, and what dimensions or categories to break the indicators down by. This is a business issue more than a technology factor, but the technology will not succeed without this business understanding in place. Financial institutions should be ready to ponder what needs to be tracked to monitor their company’s performance effectively, and not to feel discouraged if such pondering proves challenging. Going through such discovery yields business value and insight of its own, and enables sound BI implementations.

WFS: Are there any big mistakes you have noticed in companies’ approaches to BI? Are they spending in the wrong areas?

Brust: One thing I’ve noticed is a tendency for companies to view BI as small scale technology that is best used by C-level personnel and other executive decision-makers. The fact is that BI is useful for the entire organization, allowing everyone to make course-corrections where necessary, and to know what’s working. More importantly, BI enables everyone to stay goal-focused at all times, rather than only at the intervals in which formal reports are produced and delivered.

WFS: What do you expect your focus to be the next 12-18 months?

Brust: We’ll be looking even harder at scorecard implementations and the technologies underlying them, as well as at forthcoming technologies that improve the data visualization experience and facilitate self-service analytics at the personal and department-level. BI technology is entering a new phase of maturity, sophistication, mainstream appeal, and accessibility. We’ll continue to work internally and on the Microsoft Partner Advisory Council to stay on the cutting edge and make the technology better for customers.

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