The Development and Use of Business Intelligence by Allan Elder

Have you heard this before? "It's not what you know, it's who you know." In Sun Tzu's strategy Sun Tzu tells us, "What you know depends on who you know." In Sun Tzu’s “Art of War” we encounter the five factors that make up our position; ground, leadership, climate, methods, and mission. Success comes from understanding our position as well as that of our competitor. Ultimately, a position is simply a relationship of these factors, one affecting the other, and yours and your opponents affecting one another. The wise commander evaluates the five factors for themselves and for their opponent. The fool understands neither their position nor that of their competitor.

“What we have found in one research study after another is that how business really gets done has little connection to the strategy developed at corporate headquarters.” This quote, from the Harvard Business Review article “How Managers’ Everyday Decisions Create or Destroy Your Company’s Strategy” (Bower & Gilbert, 2007), highlights the reality that strategy occurs on the front-lines of organizations, large and small, by the decisions of the people that make the company work.

Effective execution of strategy requires thousands of small decisions made every day by those on the front-lines of the organization. The only way to ensure the right decisions are made is by having sound and timely information. However, from where does this information come? When we must make a decision, we intuitively understand that we need information. We have questions that must be answered in order to make the “best” decision. What is not intuitive is what the right questions are and from where to seek the answers to these questions.

The focus of this article is from where to gain information required for sound decision-making. While the decision process is an important piece of the puzzle, there is no attempt to define such a process in this paper due to the limitations of space.

Strategy replaces force and effort with information. Most of us spend a lot time planning our campaigns but very little time gathering information. This means that most of us are making decisions without information. We often do this either because of ignorance or to save time. After all, gathering information is time consuming. However, do we really save time by not gathering information beforehand? When you are in a hurry to go somewhere and leave home without directions, are you really saving time? It often seems as if you are at that moment, but inevitably leads to lost time as you drive around searching for your destination.

In strategic terms, we can substitute information for time, money, and other resources. For example, if you know exactly what you need in order to fix a broken sink you need to make only one trip to the hardware store, thereby saving time. If you know the correct type of faucet you have you won’t have to buy five different o-rings “just in case,” saving you money. When we have limited time or money, the right response in many cases is to gather information.

The reason that information gathering appears to slow down decision-making is because we wait to gather information when we are desperate. If an organization is not paying attention to the competition and then find themselves in a competitive battle, it may be too late to establish an intelligence system that provides the requisite foreknowledge. Good business intelligence systems must be established before they are needed. They must be cultivated over time.

What are needed are conduits of information that allow the flow of information, in and out, of our organization. In today’s world of marketing and selling, business people are encouraged to “network.” While networking will enhance your popularity and put you in touch with some of the right people, it offers no solution to the need for information. In addition, you are one person, how many relationships can you realistically and practically cultivate?

Sun Tzu, the Chinese general, wrote on the importance and practice of developing intelligence networks in his 2400-year-old book, “The Art of War.” This article explores the thirteenth chapter of this ancient text for insights into developing a modern business intelligence system.

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