März 2006
http://www.intelligententerprise.com/showArticle.jhtml?articleID=181501967

Q&A: BI Visionary Howard Dresner

Confused about how to make business performance management work? Stumped by what people mean when they talk about operational BI? The man who invented the term "business intelligence" has some answers.

Formerly of Gartner, Howard Dresner left the research firm after more than 12 years to take the title of chief strategy officer at Hyperion last October. The business intelligence guru recently shared his thoughts on "operational" BI and performance management, and elaborated on his new role at Hyperion.

In describing business performance management, you've often used the phrase "BI with a purpose." Could you explain that concept?

I coined the term "business intelligence" back in 1989. And it was not intended to have a technological-only focus. Much to my chagrin, however, that's what it's become. But the reality is, if organizations really want to be successful, the focus has to be on business, not technology. That's what it's all about -- trying to bring together all the people and the processes and getting them aligned with the purpose of the organization. Much of this has nothing to do with technology whatsoever. You leverage the technology, yes, but more importantly, you've got to figure out what your business is doing, what your business is all about. The technology discussion comes much later.

I came out of IT myself, and we have a certain way of looking at things. We get mired in technology -- and of course that's what we're trained to do. But it's not unusual to see IT off doing their own thing, off building a data warehouse, and often disconnected from business users. And, as IT sees it, business users are off doing their practical, myopic and parochial things, while IT is boiling the ocean trying to create just the right architecture --and never the twain shall meet. Fundamentally, though, neither one of them can respond to a senior manager's question: "How's the business doing?" Not in a timely and precise way, at least.

Operational BI has become a trendy term in its own right; it's been billed for a long time now as the new wave. Is this hype, or are companies effectively instituting operational BI?

When you look at performance management, a lot of it already is operational. A lot of it gets focused on finance -- that's true. But when you look at planning and measuring and analysis, well, a lot of our customers are delivering performance management operationally. You want to focus performance management broadly, not just on finance. For instance, processes like "order to cash" or "lifetime value of customers" are enhanced by performance management.

So operational BI isn't just a cute name; organizations have been doing it forever. The trick is getting everything aligned. We need to look at this from a financial perspective, from a customer perspective, and also from an operational perspective. Fundamentally --and this is my own philosophy -- everything that every one of us does effects everything else that we do across the enterprise. There is a relationship between operations and finance, between operations and sales, operations and marketing, operations and HR. We need to understand those relationships concurrently.

Taking Performance Management Beyond Finance

Unfortunately, in a lot of organizations, performance management is stuck in finance. Not because it's functionally limited to finance, but because finance is an obvious place to start. The finance organization tends to be much more mature than other parts of the organization, so it's a natural place for it. We already have these financial indicators; we already understand how to present these things and how to analyze these things, because we've had to do it for years. In many organizations it starts with finance, but, unfortunately, in so many of them it ends in finance.

If nothing else, if you only look at financial indicators, they don't tell you a lot of the causal factors; they don't tell you about the "why." You might look at the indicators and say, "Well, I know I'm having a negative cash flow." Okay, but why? I can go down to the sub-ledger, but I can't always go down to the real causal factors from an operational perspective. And organizations need to know that, too. You need to know the cause-and-effect relationships.

So, yeah, there's certainly hyperbole associated with operational BI, but it also puts a little more focus on how performance management, in particular, can help an organization more broadly, and well beyond finance. Not taking anything away from finance; that's pretty darn important stuff. But we've got to get it beyond finance. We've got to integrate these things horizontally and vertically. And this is what leads toward the notion of what I call informational democracy, or information transparency, if you will.

Explain a bit more about that concept of information transparency.

Information transparency, or democracy as I like to call it, is simply the delivery of timely, relevant and actionable insight to more constituents within the enterprise -- insight that's relevant to them and their role in the organization. This is not like information anarchy, where everyone gets everything. It's about getting the right targeted insight to you, so you can do your job. As an aside, you have organizations these days talking about compliance, compliance, compliance. I've got a better idea: How about we achieve information transparency? If we do that, then compliance becomes a dividend. I mean, if you do just compliance, then all you get is compliance. If you do transparency, well, there are a number of benefits, including compliance.

So, that's the notion of information democracy or transparency: It's making sure that everyone is touched by actionable insight. It's delivering metrics to you that makes sense to you today.

Moving To Hyperion

A question about your own career: Why go to the vendor side after working for Gartner for so long?

I basically had a great run at Gartner -- it was a great success story and Gartner is a great organization with many talented people. But I wanted to try something new; I needed to be challenged. After 13 years at Gartner, I had proven fairly successfully that I could do that job. It was simply time to do something different, and do something that was expanding the envelope. In looking at all the opportunities out there, it seemed like it was time to climb down from the mountain and get back down into the valley, where all the excitement and action was.

And Hyperion was a natural. Because philosophically, we're aligned. If you've had a chance to meet our CEO, you know that he's what Jim Collins [the author and business management guru] might consider a "level 5 leader." He really is at the top of his game, and I've been learning a tremendous amount from him. The organization is really in the right place at the right time, and I really wanted the opportunity to be a part of this team, to make it happen -- to achieve what I call the BPM [performance management] revolution. Because this is where the market is headed -- I firmly believe that.

What are your duties as Hyperion's chief strategy officer?

I've got my fingers in everything. I'm working very closely with customers, doing a lot of market-facing activities. I'm also very actively involved in working with our CMO, the field, our chief development officer, M&A activities with our VP of corporate development, as well as some new initiatives that I'm driving.

But working with customers is the really fun part of the job, because they're actually doing stuff with our products. They're solving real problems. A lot of the companies I've been meeting with are pretty forward-thinking. They're really trying to step back and figure out: How do we run our business better? Not: How do we implement these tools? That's a very exciting discussion to have, because you really get a sense of the inner workings of their business. It's a great opportunity to learn. It's a great way to try to figure out what's really a "best practice." And I love organizations that make things happen.

© 2006 CMP Media LLC