B S Raghavan

Business intelligence and bottomline

Updated on: Apr 26, 2011

The process of gathering business intelligence (BI) can be viewed from three perspectives: The first, innocuous and harmless in itself, is concerned with being up-to-the-minute with data which can then be evaluated and analysed by executives trained in performance metrics with a view to refurbishing the strategy, resetting the goals and retooling the managerial kits.

There are elaborately designed and astonishingly powerful softwares for this, especially useful for large and complex organisations spread over far-flung geographical regions with a large number of employees. All said, however, it is nothing more than a comprehensive, albeit immensely valuable, reporting system, and calling it BI will be a misnomer.

The second has to do with proactively seeking and acquiring information from open sources such as the media, Internet, company reports, think-tanks and readily accessible official documents as a means of keeping abreast of new developments and emerging scenarios in the spheres of business and government policy environment, management and operations, technological advances and innovations, investment opportunities, market trends, customer needs and preferences, and overall growth prospects. This approaches BI in scope and complexion, but still cannot claim to be all-systems-go enterprise.

Clandestine aspect

This was what served as the basis of the stand taken by the defence to counter the charge of insider trading against Raj Rajaratnam, founder of the Galleon Group hedge fund, in the case now going on before the Southern District Court of New York. It argued that much of the alleged information was already being reported in the financial press or publicly discussed by company officials, and that Rajaratnam used a wide array of research, analysis and public information to make his trading decisions.

But BI has a somewhat dubious third aspect as well, akin to the clandestine methods employed by government agencies to keep track of threats to national security or the activities of anti-social and criminal elements.

The purpose here is to get to know, by fair means or foul, what the rivals in the field are up to, in terms of new business plans, new business models, new products and services, entry into new markets, merger, acquisition and diversification, proposed financial outlays, the scheme of priorities and the like.

This might involve tapping the rivals' employees for secret information by offering inducements of various kinds, capitalising on previous friendships and close personal relations, or exploiting human weaknesses such as plain and simple gullibility or garrulousness. Some companies go to the extent of inducting the rivals' present and former employees so as to be able to “milk” them of their inside knowledge and put it to use in furtherance of their business interests.

Need for Task Force

Whatever be the standpoint from which BI is looked at, what will ultimately matter is its relevance to the supreme goal of boosting the company's bottomline.

There have, of course, been business and management writings galore hailing the beneficial impact of BI on business success and competitive advantage. Unfortunately, though, there exist no precise or fool-proof yardsticks to quantify and measure the revenue generation, rate of return on investment and profitability resulting exclusively, or even largely, from BI.

When companies even in advanced industrial economies are construing BI only in the narrow sense of a software solution for better reporting of data for improving performance parameters, it is no surprise that Indian companies are yet to cotton on to the hitherto unchartered territory of BI and advantages of its full-scale deployment, both to outperform and outwit the rivals.

They are yet to make good the lack of expertise and specially trained consultants in this arcane field. If they do not catch up fast, all the gains India Inc. has so far made will be laid to waste.

The federations of chambers of commerce and industry had better set up pronto a Task Force to go into all the various implications of BI and ways of waking up their members to its importance.

Published on May 01, 2011

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