If you want proof that business intelligence still has not made it everywhere yet, take a look at what typically happens when a company is purchased by a private equity (PE) firm, whose goal is typically to turn the ship around to (more) profitability and growth and sell in 3-5 years. Executives are incented with company performance and often put their own skin (i.e., money) in the game. This creates the effect of a sprint out of what was a marathon. Waste is removed from the company equation, and then some.
So, what happens to business intelligence initiatives when this growing movement of private equity ownership happens to a company? From what I gather, 50% of the time, BI is either substantially reduced or eliminated. Ouch. Do the new owners think the company can achieve its new goals better without BI? Do they see BI as only relevant for companies with goals beyond 5 years? Some clearly do.
We are now several years into the emergence of the PE trend and are seeing some of the aftereffects of the PE strategies. One of them is the RE-introduction of BI. In these cases, either BI was (1) providing value, but it was imperceptible by the PE firm or (2) not providing good value.
Either way, in my experience, companies never ultimately do not do business intelligence. It may be called something else. It may be dormant for a while. It may be floundering and in need of revitalization. PE firms take note - let's evaluate the BI in place before making changes. BI can, and ultimately does, work with a strategy of streamlined, 3-5 year horizons.
Posted January 25, 2009 8:44 AM
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