Business Intelligence/Framing the strategy

Business Intelligence
Clarify strategy	Framing the strategy	Test Causal Link Map

Purpose: this step demonstrates how to turn decision maker strategy into diagrams
Input: List of decision makers; Decision makers' business knowledge
Activities: Interview decision makers; Create Strategy Diagrams
Outputs: Formalized decision maker knowledge
Documents: Strategy Diagrams

Strategy Diagrams

This book adopts the current top-down approach to building Business Intelligence systems. This approach assumes that BI is driven by management strategy. Strategy diagrams identify the critical activities that allow a company to differentiate itself from the competition in order to create value in the marketplace (Morgan et al. 2007). These diagrams are formal and explicit models of knowledge and strategy. The three strategy diagrams allow us to model strategy are:

Activity Map (Porter)
Customer Outcomes Map (Chatterjee)
Strategy Map (Norton and Kaplan)
Causal link Map (Norton and Kaplan)

The first step in creating a BI system is to develop all three maps. This first requires gaining a firm understanding of the business. The next step is to gain a firm understanding of the strategy. Then the architect begins by interviewing all decision makers required by the project. This will often include multiple interviews with the same decision makers and also group discussions. The input is a list of decision makers.

The final step is to create the causal link map. The causal link map removes all the features of the three strategy diagrams and focuses on the causal links. This allows the strategy to become a theory (causal link map) with testable hypotheses (links).

The testing of the causal link map is fundamental in building an effective BI system. An important function of the reports that the decision maker will examine assume that X causes Y. X serves as a leading indicator of Y. The assumption is that by focusing on X it is possible to make certain that Y occurs. If this is not the case then focusing on X is a waste to time and resources. Therefore, testing the causal links is perhaps the most important step in developing the BI system.