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Measuring the Business-Alignment of BI

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Measuring Business Alignment of BIA BI capability is one of the most business-critical IT-related resources of an organisation. The degree of the BI capability’s alignment to the organisation’s strategic objectives can be measured by applying BI to the deployment of BI itself.

 Business alignment

You should measure every BI initiative’s alignment to the strategic goals. The most practical technique is to create a cross-reference table between the organisation’s strategic objectives and the current BI initiatives. For each intersection, you indicate the percentage that the BI initiative supports the given business objective’s information requirements on operational, tactical and strategic levels.

A business objective with a low sum of percentages over the respective BI initiatives indicates where BI is badly aligned or where to address shortcomings in the BI program.

Deployment

The relative measure of value of the respective BI initiatives comes from actual usage statistics: the
number of users, their positions and actual information usage (number of accesses, amount of data reported, number of reports actually used and how frequently).

To determine whether BI is getting the right information to the right people at the right time, you take a short survey of the executives heading up the key business initiatives:

  • What percentage of the information requirements for the initiative is obtained from BI?
  • To what extent (percentage) does the information satisfy the requirements to manage
    this initiative?
  • What other information is required to manage this initiative, which is currently either
    not obtained from BI or is obtained through cumbersome processes?

Although subjective, the first two indicate the extent to which BI addresses the strategic drives. Periodic re-evaluations will show the trend. The third question indicates directly where
you should improve BI to serve the organisational strategy.

Business processes

For each strategic business process there should be a fact table to analyse its measures from all applicable business angles. You can represent this quantitatively. Gaps in the information
requirements indicate badly aligned BI initiatives.

You must also analyse every strategic business process to determine how BI can provide measurements to the responsible personnel. Missing data should be provided through the data warehouse, and you must investigate the penetration of the relevant information into the
organisation.

Summary

In this post I provided measurements that should be part of any BI solution to monitor its success and its penetration into the business. Organisations must use BI on the BI
processes themselves to measure their success, just like BI should be used to
measure the success of other business-critical initiatives.

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