Frank Buytendijk Blog

A few weeks ago, I titled a blog entry "BI 2.0," and it got a ton of reactions. So maybe it is good for my blog popularity to keep talking about the hypes. Here's another attempt ;-).

In the last few weeks, in my home country The Netherlands, I had a discussion with some fellow BI professionals about a very simple and fundamental question in our field of expertise: What is business intelligence? I pointed out there are many definitions, depending on whom you talk to. Accountants will relate BI to Control System Theory, which explains how to manage the flow of goods, the flow of money, and the flow of information. Technology people will see BI as an umbrella term, describing tools for querying, reporting, OLAP, statistics, advanced data visualization, dashboards, and so forth. I have always liked a more human oriented definition: "BI is structurally and in a structured way looking for data in order to come to fact-based decisions."

Most people in the discussion pointed out that BI is the supply of information needed to manage and optimize business processes. But the developments in BI over the last few years have made me doubt that traditional view.

• If you share management reports (one form of BI) with your customers for them to benefit from (such as managing the business relationship they have with you). It may help your customers with their business processes (or lives when it is about consumers), but for you it is not managing a business process. It has become a business process itself, BI becomes part of your customer value proposition.
  
• If you provide sales data to suppliers, and user that offer as a strategic instruments in a procurement process, it is not managing a business process, but creating a better procurement result in a different way.
  
• If you have an active policy of informing investors, through a fast close and transparent information supply, you are not only managing your business better, but BI is part of the process of attracting capital.
  
• If you invest in social and environmental reporting, BI is part of public relations, as well as managing business processes better.

BI is not only there to manage business processes, BI increasingly becomes an integral part of the process itself. To make a long story short, BI becomes a product or a service itself. From a macro-economic perspective, this makes sense. We have moved from the industrial age to a service, knowledge and experience economy. BI is simply following this trend.

In this discussion, Andries Bottema came with a very good definition, that I immediately liked and herewith adopt.

"BI is deploying information as a factor of production."

In other words, BI makes information the fifth factor of production, next to labor, capital, materials, and facilities.

I think this view is much more impactful than the technology-focused discussion on BI 2.0. Thoughts, anyone?

frank