Business intelligence (BI) and analytics have been top corporate buzzwords, according to seemingly every study and expert opinion. While IT departments have been the biggest drivers in BI investment, CFOs and financial executives also have a growing interest in the technology.
What exactly is BI, and why should financial leaders be interested in adopting it?
"Very simply, it's key information that you need to have at your fingertips to operate most successfully," Bruce Myers managing director at AlixPartners, recently told TechTarget. "So, what's selling? Who's buying? Is it profitable?"
A recent AlixPartners and CFO Research survey found that 71 percent of financial executives believe they have poor access to important information, and 57 percent said they weren't good at projecting a return on investment for IT projects. But Myers said that 99 percent of the information companies need for predictive analysis is already located within their systems.
The challenge is getting that data to intertwine in a meaningful way. That may be about to change, however, with a recent Gartner study projecting the worldwide BI sector to increase 7 percent from 2012 to 2013. Not only that, descriptive and predictive analysis appear to major focuses, according to Gartner research vice president Kurt Schlegel.
"Every company has numerous subject areas … that have yet to even start with BI and analytics," he said, citing HR, marketing and social media projects, just to name a few.
When it comes to implementing BI strategies, a good place to start is using the technology to forecast whether an IT project will be likely to achieve a return on investment. As the Gartner study noted, innovations like cloud computing, mobile applications and social media have exploded – and should continue to grow – so identifying cost-effective solutions beforehand could be an extremely valuable tool.
With the help of ROI analysis, Myers said business intelligence will be able to answer a lot of questions.
"Will this new technology really work? Will the business embrace change? Making that assessment up front is important because if you just do the financial analysis and don't make sure it will execute properly, it's a waste of money," he told TechTarget.
But BI's value extends far beyond just measuring ROI for large projects. Myers advised decision-makers to brainstorm what questions they want their analysis tools to answer prior to deployment. That way, they can design their BI tools to help with both large-scale projects and smaller ones.