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Hard versus Soft (Tacit) Information – Red Flag #2 on why BI reports fail February 2, 2006

Posted by Cyril Brookes in General, Issues in building BI reporting systems, Tacit (soft) information for BI.

Henry Minzberg [HBR July-Aug 1975] deserves the credit for first articulation of the value of soft information. His famous quote is “The strategic database of an organization is in the minds of its managers, not in its computers”.

In my view, the most disturbing omission in the BI reporting system environment is the lack of understanding of tacit information and the consequent non-recognition of its importance to executive users of BI.

The distinction between the two classes of information, and my introduction to the difference, is discussed in an earlier post.  If your BI system specification takes no account of the inter-dependence between them, then it will surely be deemed deficient by its user executives when built.  There are three basic ways that soft information can be introduced into a BI system to augment the hard reporting:

  1. What people are saying about, and their opinions on: Corporate performance BI report content, the industry, the business, etc.
  2. Whistle-Blowers’ messaging, pointing to problems in: Business processes, products, customer relationships, HR, etc.
  3. Forecasters’ forum highlighting changes in the business processes: Dynamics of the market, regulation, business cycles, trends, etc.

Therefore, the symptoms of Red Flag 2: Hard Information only here are present in a BI project where:

  • Numbers are reported, usually for KPIs or measures, without any indication of what people think about them, their implications, or their accuracy
  • Executive readers are given no indication as to where such soft information may be found
  • Hard information is likely to be reported to senior management before operations management gets to know about it [thanks to the magic of ETL].  Hence, no commentary can be available.  The numbers are therefore useless to the senior management.
  • Executive users cease to read the numbers, since they mean nothing without the interpretative capability of the soft components.

There are so many tools available now to enhance collaboration and the exchange of comments, opinions, etc. that the BI report system designer should have little difficulty in making at least some steps to avoid this Red Flag waving.  Addressing one or more of the three ways for integrating hard and soft information is a good place to start.



1. janno - May 4, 2006

i think what you say is very relevant in the light of huge push for automated enterprise. our student group has been writing a report on business intelligence and based on several interviews with big companies there seems to be concern on how much can they really rely on such systems

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