Lessons from BI in Public Institutions

Business intelligence and analytics

According to Klatt et al., the advancement of business analytics has enhanced performance management systems. Good data or analytical tools do not ensure that managers will reach sound decisions. Managers need to be equipped to pose good questions and to interpret the outputs. According to Gartner:

[W]ithin the model for business intelligence maturity, there are four levels in which an organisation can be classified in terms of levels of information of increasing value to business strategy.

According to Gartner, managers should be able to answer from the use of business intelligence tools:

• Descriptive analytics: what happened? (inform)
• Diagnostic analytics: why did it happen? (explore)
• Predictive analytics: what will happen? (predict)
• Prescriptive analytics: how can we make it happen? (optimise).

Chan and Hernandez argue that it is the responsibility of managers to support and promote the analytical capabilities and culture within the organisation to ensure sustained growth and success. Within the organisation under study, it is evident that the management complement is not supporting SAP BI, as shown in the low usage of the analytical tool. It has been established by the business improvement section that a gap exists between management accountability and technology. The business improvement team has initiated a management accountability programme in an attempt to address this issue and to create awareness of the critical role of technology amongst managers in their respective areas.

The organisation under study therefore misses out on the benefits that BI brings. Moody and Walsh drew the relationship between the value of information and the level of its accuracy. Figure 2 shows that the higher the data accuracy, the greater the value an organisation derives from the information.

It has been reported in meetings also that the performance management aspect of the organisation suffers because of poor use of business intelligence. Performance management, according to Swanepoel, Erasmus, and Schenk, can be defined as '[a] process which is focussed on organisational performance improvement through a number of human resources (HR) processes, including organisational performance'. In the organisation under study, annual targets are set for the key performance indicators but reports show that the performance management levels are always low.