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It falls to the CIO to make an effective pitch for investing in IT, says Neil Raden, founder of Hired Brains Inc./Hired Brains Research.

Making a persuasive case for your BI investment

Take the right approach when seeking senior management’s approval.

by Neil Raden

Most organizations have already invested heavily in data warehousing and business intelligence (BI) technologies. Therefore, before spending any more on these technologies, senior management must be convinced that doing so will support very specific objectives. Top executives will pay to improve productivity and avoid larger investments elsewhere, but only if they are certain they are getting value from their IT investments.

If convinced a BI initiative is necessary, a CIO must package the proposal for senior management to approve. It isn’t an easy job. The company’s overarching strategy pulls from one direction, while the allure of new technologies that can do more things faster (and perhaps more economically) pulls from another direction. Pressing from the top is the current state of the organization’s data warehousing and BI environment. As a result, the decision to invest further in BI or data warehousing technologies is often daunting, but it can be even more difficult to convey your rationale to others who don’t grasp the nuance of all of the crosscurrents and trade-offs.

CIOs should consider three characteristics when examining whether additional spending is warranted:

1. The state of existing data warehousing and BI implementations
2. The motivating factors to expand, enhance or remedy that state
3. The organization’s strategic intent

In the real world, every instance will be somewhat different, but the goal needs to be presenting a credible proposal to senior management to advance an IT program in alignment with strategic objectives.

The state of technology

Three states of data warehousing and BI can be identified:

Stable

When the environment is stable, all components are performing at their expected levels. That does not mean that things are optimal, however. It is possible for a stable environment to deliver less value than it should. The use of the BI tools might not be best practice, but business is continuing and people are making do, either with the environment or with workarounds. Of course, a data warehouse that is performing extremely well is also in the stable category.

Resource constrained

Many environments operate without major events or drama, and they provide adequate support for the processes they serve. However, more could be done. Even with an easily justifiable premise, the resources are just not there. These resources could be physical, such as servers, memory or storage; software; or human resources, requiring additional staff or consulting services.

Underperforming

The word “underperforming” has meaning only within a specific context. How something is performing is a matter of opinion. In cases of gross failure or breakdown, opinion is likely to be universal, but discussions about it are likely to occur at the edges of non-performance. If the database is meeting service level agreements (SLAs)—even if they are out of date or unrealistic—those responsible for meeting them are not likely to accept the “underperforming” label. But if the SLAs are achieved by restricting access, those who depend on the data warehouse will see things differently. When the CIO frames a case for investing in the data warehouse, the context for this label has to be strategic. Systems operation has to impede or prevent progress in some strategic effort, such as cost reduction, customer retention or revenue enhancement. Or if a constituency of analysts, for example, would like more current data for a loosely specified reason, they may find the data warehouse underperforming, but only from their point of view.

Innovation and enhancement

Because CIOs are responsible for devising and implementing an organization’s IT strategy, their decisions are influenced by many external factors, especially emerging approaches. Deciding to proceed is, of course, guided by the organization’s current strategy. However, the lure of something new and improved has strong appeal, and the CIO must wisely evaluate alternatives before making a proposal to senior management.

CIOs are charged with striking the right balance in order to keep the technology stack stable and costs under control, while judiciously selecting technology enhancements that make sense. As various constituencies lobby for enhancements, the savvy CIO will weigh alternatives against the company’s overall business plan as well as organizational mandates, such as cost reduction. This is particularly true during times of economic instability.

Strategic requirements

It would take an exceptionally persuasive argument to gain approval for a project of any size that violates the organizational strategy. Therefore, clearly conveying the business benefits of a proposed initiative is critical. However, the intent of most projects—unlike the technology-related motivators—is usually not obvious until one runs headfirst into it. With respect to data warehousing and BI, these tactical objectives are most common:

Spend money to save money

Data warehousing and BI spending will be vital in helping businesses boost their efficiency, reduce costs and retain customers. Saving money by investing may appear counterintuitive at first, but like buying a new car to achieve fuel savings and avoid repair costs, the numbers pan out over time.

Since the early 1990s, organizations have largely deployed technology to reduce operating costs. Though such opportunities will always exist, it is now abundantly clear that it is impossible to continue to streamline and innovate without the ability to analyze, forecast, and continuously monitor and improve. Operational systems lack these capabilities, but data warehousing and BI are perfectly positioned to provide them.

New and ongoing initiatives to promote efficiency, retain customers and enhance revenue require up-to-date analytical environments. Presented convincingly in this way, successfully making the case to invest in analytical environments is greatly enhanced.

Neil Raden is founder of Hired Brains Inc./Hired Brains Research. Based in Santa Barbara, Calif., he is a consultant, speaker and author. He can be reached at nraden@hiredbrains.com.

Photography by Chip Raches