How to construct a well-balanced BI project portfolio

How to avoid the mistake of skewing your BI portfolio too heavily towards a particular theme, as it doesn't allow to move your entire business forward.

Introduction

Let’s say you are a CEO or a BI Manager, and it’s time to think about what your BI project portfolio is going to look like for next year. You can just keep rolling existing projects over. Or you can take a pause and reflect. Is your portfolio well-balanced? Does it cover all the important aspects of your business? Or is too one-sided towards one particular theme?

We suggest that having a well-balanced BI portfolio is always a good idea. See below for what (broad) categories of projects it should have, at a minimum. Some are ever-green, and are relevant to the vast majority of businesses. And others are more of a case-by-case.

Evergreen themes

There are certain types of BI projects that work and add value to companies no matter what. It doesn’t matter where the bottleneck is located. It doesn’t matter if the market for your products or services is over-saturated. These opportunities are just always valuable.

The first of these types of areas is cost.

If you can find ways to obtain the same goods or services that your company buys at a cheaper cost, ideally without sacrificing the quality, that is always useful.

Step 1. To start, what you normally need to do is figure out what the business is already spending money on. Then you categorise the different spend items by type – maintenance services, consumables, and so on. You might want to sort them from biggest to smallest. The smallest ones are probably not that useful to chase, as even if you find cost saving ideas, the value might not justify the effort.

Step 2. You also want to categorise them by how easy (or difficult) it is to get those cost savings. If it’s a very competitive market for what it is you’re buying, getting cost savings is easier. If you only got one supplier, not so much.

Step 3. Once you’ve identified the types of cost you want to target, get busy figuring out how to lower those costs. Call alternative suppliers and understand how much they would charge if you switched to them. Talk to the people internally, who understand how the goods or services are currently used, and if there are inefficiencies or waste there. Ask them if there are lower-spec alternatives that might be good to consider.

Use common sense and a bit of commercial acumen to see what you can do to lower those costs. Pretend it was your money. Would you spend this much? If not, ask yourself, what would you do to make those costs go down, if you had full control of the situation.

Another type is bureaucracy and inefficiency

Nobody likes bureaucracy. If you can figure out a way to reduce the total amount of bureaucracy within your organisation, people will thank you.

Where does bureaucracy come from? Normally, there is some historical reason why a certain process was set up a certain way. Maybe there was a problem with insufficient approvals in the past. Or maybe there was an over-conscious manager running the process back in the day. That procedure was set up in those times and has been running like it is for a while now. So people just stopped questioning.

Step 1. Start by creating a catalogue of the most inefficient processes in your organisation. Those that have excessive or duplicative controls. Those that involve a whole bunch of people who treat it as a ‘tick and flick’ exercise. Where the intent of a rigorous process doesn’t match the reality anymore. Maybe even grade them on a scale of 1 to 10. That way, you will always have a source of improvements you can chase later, if you’re stuck with your initial pick.

Step 2. Question and interrogate these processes. Ask yourself, how can you simplify these processes? If you were designing it all over again, would you set it up like this? Draw the process out on a piece of paper, map out the inputs, outputs, stakeholders involved, time required at each process. Calculate how long the process takes overall. That often has some useful shock factor you can use later to convince everyone to adjust the process.

Step 3. Tackling inefficient process is usually not that hard intellectually. The real difficulty lies in managing the change. Convincing stakeholders to join you. Educating everyone on what the new process would look like in the future. Explaining how the new level of risk might just be a faulty perception. Documenting everything. It’s also a good learning experience for younger BI professionals on your team. And if they deliver it well, you know you got potential superstars on your hands.

Stakeholder experience is another area you should look at

Similar to bureaucracy (and dissimilar to cost), stakeholder experience doesn’t bring your company a monetary benefit. However, it does create a better working environment for everyone. And the definition of BI shouldn’t only include financially beneficial projects. It should be anything that helps your business perform better.

Stakeholders should include people like employees, customers, and suppliers. They are all critical to making sure your company is able to do whatever it is it does. So, making them happier to be a part of your business is good. If anyone asks you why you’re chasing these projects, remind them of this line of argumentation.

Sub-category 1. Ideas in this category include things like clarity of communication when certain events happen. Like when there is a delay in shipment to your customers. How do they get informed? Who calls them? Is there a standard script for how it’s done? What happens if they are unhappy and want to escalate? How do you reassure them and make them feel like you actually care? You can ask all these questions to find holes and improvement opportunities in your existing processes.

Sub-category 2. With your colleagues, you can look at something like their overall employee experience (EX). Do people feel valued? If they put that on a scale of 1 to 10, where would most people end up? Is there a difference by department? Or by how long people have been in your company? What makes them feel not valued? Ask a few of these and you’ll get some excellent improvement project ideas.

Sub-category 3. Suppliers are often the area that has the most opportunity for improvement. Companies often feel that if they gave business to a supplier, and agreed to pay money to them, that supplier should be eternally thankful and happy. And not even think about having any complaints. But the people who sign supply contracts, and the people who actually deliver the work are different. And those delivery people are often treated as second class citizens by many companies. You can unpack that whole can of worms and find great BI project ideas there. Happy suppliers mean better quality work. So there is your justification for undertaking them.

Non-evergreen themes

Unlike the ideas above, things like increasing production volumes may not be so straightforward. For a lot of companies and industries, you might be market-constrained. That means that even if you produced more goods or services, you won’t be able to sell them. So all of that fancy ‘Theory of Constraints’ toolkit might not be applicable in your instance.

But if it is, and you could sell more if you produced more, it might be a great area to explore for BI opportunities. There would typically be a hundred and one things you could improve in your production process. Just always remember to focus on the bottleneck. Because if you improve the process in other parts of it, you will likely not see the payback for your efforts or investment. Such is the nature of non-bottleneck operations.

Identifying bottlenecks might also not be so straightforward. The bottleneck might be shifting from process to process, depending on time of day, what you’re producing, or who is operating the machines. So you might need to do a whole bunch of analytical gymnastics before pinpointing where your bottlenecks really are. Which is actually quite a fun exercise to undertake.

For more complex areas like production, you might want to enlist the help of more experienced colleagues and experts. These also tend to be higher-stake projects than others. If you get it wrong, and the entire production line suffers, that will not look so good. So it should be treated with appropriate care and resources.

Crafting a well-balanced BI portfolio is worth it

The people working with you in your business, whether employees, suppliers or customers, will understand why you’re so focussed on cost. But if that is the only thing you’re doing, that will affect how they perceive your company. It’s generally not good if you’re seen to only care about the profits, but not the other things that less tangible, but equally as important for a successful business.

There might be more types of projects that are worth considering for your portfolio. If you’ve got great ideas about what they are, let us know in the comments on our website, or by replying to this email.

And if you need help with some BI coaching or an external perspective on your project pipeline, we’d be more than happy to assist. Just in touch with us at team@binewsletter.com.