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.
By Scott Eden
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
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
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
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
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
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
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
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
© 2006 CMP Media LLC