Businesses live or die by arming executives with the best data available to make the smartest decisions. That makes perfect sense in theory, but just how do organisations get that ‘best data’ into their hands? Should a strict central team push data out, or should data flow upward from those empowered to seek out the data they know they need?
A central ‘parent’ setting out ground rules with divisional ‘children’ can ensure that data is both consistent and agile enough to empower talented people to make smart decisions.Ben Rossi
Companies have tried both approaches and neither is without its flaws. The reality is, both have merits. It is through combining the best of each approach that organisations can strike the right balance.
Where is data coming from?
When you think about how BI started off, it was all about pushing out reports and dashboards that were created from a central unit. These were then made available to every department and division, regardless of whether that information was what those employees would ideally need, or whether it was in the right state for them to work with.
The technology to deliver this functionality was – at the time – expensive and difficult to implement, so it could only be achieved by central IT teams that had the skills and the budgets to complete these projects successfully.
These long, Waterfall-style implementations and rigid tools did not allow quick turnaround changes to reports or free-form discovery of data.
Instead, once these implementations fulfilled initial requirements, there was very little ability to react to new or follow-up requests around data views. This also meant that it was hard to meet the unique needs of different regions or departments over time.
As a result, departments and individuals reacted by buying their own data discovery and visualisation tools. This may have left them feeling more empowered, but it’s also where the disagreements began.
Without central guidance, different executives would work from figures gleaned from various tools. These results often contradicted one another or were wildly different.
The end result was that efforts to decide how a company should move forward around strategic challenges would instead descend into head-scratching exercises over who had the figures that could most be relied upon.
Parent and child
To make the best use of data, organisations need a way to provide transparent governance over the data that people use, but with a great deal of local autonomy around how it is accessed, interrogated and used in everyday scenarios.
Essentially, BI has to replicate the roles of a parent and children. The central unit – the parent – governs the rules around the essential metrics that the business requires, how they’re collected, reported, shared and analysed.
Each division or department – the children, in this case – are all signed up to the same data, as well as how it is used. The end result is that the person running the company’s marketing in the Brazilian office and the equivalent in China both know what the organisation measures and reports on.
Those two operations may be run under very different circumstances. However, so long as there are specific rules on how central corporate data is recorded and interpreted, the organisation can make the same sense of all its sets of figures.
This need for a parent in the centre of BI and a series of children, or business units, on the outside has led to a couple of different terms. Gartner has coined the ‘bimodal’ approach, while McKinsey refers to the development as ‘two-speed’.
It’s the latter term that describes the advantages of a central unit transparently regulating multiple divisions. It gives a great degree of local autonomy, so long as teams stay consistent with respect to central data.
Two-speed is useful because it sums up how – if the balance is right – organisations get a gearing mechanism between central and local teams, so they can work at different speeds.
With more local autonomy, business units can still work to that same corporate metronome.
If you can put the right tools securely in the hands of the right people, then the local autonomy they’re offered will result in all kinds of interesting revelations. Crucially, these results can be fed back, so the whole organisation can benefit.