BI vital for decision-making

MUMBAI: Business intelligence (BI) technology is an important component in differentiating between leading and average companies, according to the IDC study commenced by Teradata Corp.

While information continues to explode and the pace of business decision making is faster than ever, BI technology is at the intersection of a crossroads.

Leading companies are on one path, using BI for operations as well as the traditional strategic decision making. On the other path, average companies are using gut instinct to make important business decisions with their management far behind the leaders in investing in BI technology.

"This is a wake-up call to companies that are not using BI for their operations as well as for strategic business decision making," said John Gantz, chief research officer of IDC.

"We are able to observe both where the technology is capable of taking us and where the market really is. In a way, this is a gap analysis," said Gantz in the IDC white paper on "Taming Information Chaos: A State of the Art Report on the Use of Business Intelligence for Decision Making."

The study quantifies the gap between market leaders and average organizations in the use of technology to support decision-making. Sixty-six percent of leaders rate their management's understanding of the need to invest in BI as excellent, compared to only 15 percent of average companies.

Leaders are more likely to use BI on their front lines and to push it out to customers and suppliers — and more leaders said there would be ‘immediate’ negative impact when their BI system was down. Leaders are more likely to rate BI as their top business initiative and to measure return on investment from BI.

"Market leaders are making decisions in noticeably different ways from average companies. It is evident from the study that management support for business analytics and dependency on real-time information are critical to taming information chaos and enabling smarter, better decisions," said Darryl McDonald, chief marketing officer of Teradata.

"This study extends our previous surveys on global business decision making over the past five years and pinpoints important issues and trends. These range from information overload and decision complexity to democratization as critical business decision making spreads from the corner office to cubicles and out to the front lines," he added.

The study also revealed that 77 percent of all business decisions remain primarily "gut" or instinctive. ‘Gut’ decision-making is more common in the APAC region, as compared to more mature markets in the Americas or Europe.

In addition, the study revealed that the decision making process is continuing to shift down and out in organizations and that there is a vital need for new business analytics tools to provide better supporting information. Evidence of this diffusion includes: The respondents of the IDC survey were 1,072 executives from 22 countries, of whom 39 per cent are in IT management roles and 61 per cent in line-of-business management.