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Executive access to Business Intelligence drives performance
10 Mar, 2011 - Lachlan James

Companies that empower executives with access to real-time Business Intelligence (BI) will experience substantially better year-over-year improvement in operating profit, organic revenue, as well as outstanding customer retention rates according to a new study.

The recent Aberdeen Group research report – The ABCs of Executive Analytics: A-List Performance Using BI in the C-Suite – said that “Best-in-Class” executives are able to use BI to recognize and capitalize on opportunities in their business environment, and make fact-based decisions in real-time independent of IT assistance.


Defining “Best-in-Class”

The research report, based on a survey of over 350 senior executives between January and February 2011, divides respondent organizations into three categories:
  • Best-in-Class (Top 20% of aggregate performance scorers)
  • Industry Average (Middle 50% of aggregate performance scorers)
  • Laggard (Bottom 30% of aggregate performance scorers)
The Best-in-Class are distinguished from Industry Average and Laggard companies by six main performance criteria:
  • Ability to achieve improvement in operating profit
  • Ability to increase organic revenue
  • Ability to increase cash flow
  • Ability to achieve ROI for marketing initiatives
  • Customer retention rates
  • Employee retention rates

Characteristics of Best-in-Class

The survey indicated that Best-in-Class organizations are:
  • Sixty-five percent more likely to have executive-level ownership of BI strategy
  • Fifty-six percent more likely to align operational activity to a strategic agenda
  • 1.3 times more likely to automate the generation and delivery of standard reports
The report also found that those organizations successfully delivering real-time self-service BI to executives (Best-in-Class) were also more likely to be using Mobile BI:
  • Twenty-seven percent of Best-in-Class have already implemented and are using Mobile BI deployments, compared to 14% of Industry Average companies, and 7% of Laggards.

Drivers

The report revealed the top pressures driving executive investment in BI initiatives as:
  • Failure to recognize new growth opportunities
  • Poor understanding of, and ability to, oversee routine daily operations
  • Inability to access crucial decision-making information when needed

Inhibitors to efficient data management

The report states that, as an over-arching principle, the ability of Best-in-Class organizations to generate actionable intelligence from their data stores, and successfully apply data analysis to real-world business situations, separates them from other enterprises.

An earlier Aberdeen benchmark report from December 2010 – Data Management for BI: Fueling the Analytical Engine with High-Octane Information – identified the top five inhibitors for the delivery of timely and relevant data analysis as:
  • Lack of IT resources (52%)
  • The expense of software and services (45%)
  • Poorly defined end-user information requirements (42%)
  • Lack of management support/sponsorship of projects (38%)
  • Business need is not considered high enough to justify expenditure (24%)

Benefits of comprehensive executive use of BI

The report identified several key significant benefits of real-time self-service executive access to BI, including:
  • Improved operating profit: Best-in-Class companies achieved a 42% year-over-year increase in operating profit, compared to 11% for Industry Average companies, and a 7% reduction in operating profit for Laggards.
  • Increased organic revenue: Best-in-Class companies achieved a 41% year-over-year increase in organic revenue, compared to 12% for Industry Average organizations, and a 5% decrease for Laggards.
  • Increased cash flow: Best-in-Class companies achieved a 34% year-over-year increase in operating cash flow, compared with 9% increase for Industry Average, and 6% decrease for Laggards.
  • Good ROI for marketing initiatives: Best-in-Class companies achieved a 20% year-over-year increase in ROI for marketing initiatives, compared to 9% increase for Industry Average, and 4% decrease for Laggards.
  • High customer retention rates: Best-in-Class companies managed a 94% customer retention rate, compared to 92% for the Industry Average, and 77% for Laggards.
  • High employee retention rates: Best-in-Class companies achieved a 96% employee retention rate, compared to 91% realized by Industry Average organizations, and 76% for Laggard enterprises.
All results were measured over a 12-month period.

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