Changing the way data is gathered, processed and presented is more likely to guarantee better information and improved business performance than large investments in IT, a KPMG report has found.

Despite an annual global outlay of around $US60 billion in business intelligence (BI), a report commissioned by KPMG and conducted by Cambridge University, found that more than half of such BI projects fail due to a combination of poor data quality and disconnect between BI and business strategy.

The survey also found that one of the most common reasons for breakdowns in BI is the ownership of business intelligence being limited to specialists within an organisation instead of being embedded in processes.

The review of research indicates that fewer than 10 percent of organisations have successfully used BI to improve their organisational and technological infrastructures.

Ian Hancock, KPMG partner for IT Advisory says that many organisations are not capitalising on their investment in BI.

“Billions of dollars are being wasted world wide on a combination of poor IT systems and bad business planning. In this fragile economic environment, we can’t afford to waste resources with second rate decision making systems,” says Mr Hancock.

Mr Hancock explains that BI works by aligning information requirements with strategic needs, enabling organisations to create a foundation for improved performance measurement, competitive intelligence, and effective decision making.

“Ironically, much of the data produced by corporates and governments is historically focused, inaccurate and contains limited forecast data which can make decision making more risky,” Mr Hancock states.

The report found that two-thirds of executives feel that quality and timely access to information is poor and inconsistent, while seven out of 10 executives do not get the right information to make business decisions.

Randy Wong, director of KPMG’s Business Performance Services says that individual departments often produce reports from poor quality information due to issues with accuracy and timeliness, leading to a lack of trust in the outcome.

“The issue is that business intelligence is often not linked to the business strategy, so key performance indicators are poorly defined and lack relevance to measure performance against the strategic objectives of the organisation.

“When senior executives are trying to understand and fine-tune drivers of performance within their organisation to achieve better results and possibly shareholder value, it goes without saying they need to rely on quality information.

“This research gives clear empirical and anecdotal evidence that those with effective business intelligence outperform the market by more than five percent in terms of return on equity,” Mr Wong concludes.