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The Dawn of the BI Director
In most organizations, business intelligence (BI) has always played second fiddle to transaction applications. Organizations have traditionally lavished millions of dollars on projects to implement packaged operational applications and rewarded the IT managers who supervised these projects with hefty salaries. In contrast, until recently, BI projects have always been an afterthought, viewed by executives as departmental systems or the responsibility of a few programmers who write custom reports. A career in BI was seemingly a dead-end for ambitious IT professionals.
Today, the stepchild status of BI is changing. One sign of change is the growing stature of BI Directors who oversee data warehousing and business intelligence projects. These days, BI Directors regularly manage multimillion dollar maintenance and capital budgets, oversee sizable teams of developers and contractors, and negotiate large deals with software vendors. More importantly, BI Directors now manage what their top executives consider to be a "strategic resource" that supports fact-based decision making and keeps the organizations headed in the right direction.
Wages. One result of these responsibilities is that BI Directors now earn close to the highest salaries among all IT professionals. In 2004, BI Directors received an average salary of $117,866 and bonuses of $19,898 for a total compensation package of $137,764, according to a recent TDWI survey.1
When viewed across the spectrum of IT management positions, BI Directors draw an equivalent salary to Directors of Systems Development, and the position of Director of System Development is the third highest paid management position in IT, with $120,864 in average salary and $14,950 in bonuses for total 2004 compensation of $135,814 as reported in a Computerworld survey.2 This is $2,000 less than the average compensation enjoyed by BI Directors in 2004.
Salary Hikes. The increasingly strategic role played by BI in corporate America also translates into bigger annual raises for BI Directors. Last year, BI Directors boosted their salaries by 5 percent, a figure validated by both TDWI and Computerworld salary surveys. (Computerworld labels this position "data warehousing manager.") The only IT professionals receiving a bigger pay hike in 2004 than BI Directors are the chief information security officers, whose wages jumped six percent from 2003, which is not surprising in this post 9/11 world.
Enterprise Scale. A big reason why BI Directors are among the highest paid IT professionals is that they build and manage much larger systems than in the past. No longer do BI applications consist of an OLAP tool running against a departmental data mart serving a handful of power users. Today, the systems managed by BI Directors are enterprise in scope.
On average, BI Directors oversee data warehouses that contain 2.4TB of data and support 890 active users across six functional areas (i.e., sales, manufacturing, etc.) The budgets BI Directors manage are equally large. On average, BI Directors oversee a $1.27 million maintenance budget and a $1.26 million capital budget. (See Figure 1.)
Executive Perceptions. Moreover, BI Directors now have the endorsement of top executives. When asked the degree to which their top executives consider BI to be a strategic resource, 71 percent of BI Directors said a "high" or "very high."
To qualify the nature of this "strategic resource," the TDWI survey also questioned respondents about executive perceptions of the BI environment. Nearly one-third of top executives (29 percent) view the BI environment as a way to "empower knowledge-workers" while slightly more than a quarter (26 percent) view it as a way to "monitor processes and improve efficiency." Another 18 percent believe the BI environment "drives the business" and one percent believes that their BI environment "drives the market." The latter two responses are signs of a highly mature and effective BI environment. (See: "Gauge Your Data Warehouse Maturity" by Wayne Eckerson, DM Review, November 2004 at www.dmreview.com/article_sub.cfm?articleId=1012391.)
Bridging the Business-IT Gulf. To be effective, BI Directors need a whole raft of skills, which are summarized in Figure 2. The best BI Directors possess a strong blend of technical and business experience that lets them quickly translate business needs into analytical applications that help users make better decisions and plans.
BI Directors' technical know-how enables them to create effective BI architectures and systems processes and identify the right people to put on their technical teams. Their business background and acumen enables them to communicate with business people in terms they understand and grasp their needs in a business context.
"After you get your [systems] process and environment set up and you have technical expertise, the most significant time is spent leading clients through a process to help them articulate what problems they want to solve and what potential solutions help them resolve the problem," says a senior director at a large investment firm in Boston.
BI Evangelists. Once a BI system is built, BI Directors must turn into evangelists who market the BI resource full time. They often spend a majority of their time educating users how to better leverage the resource to make them more effective and efficient workers.
For example, Deb Masdea, director of business information and analysis at the Scotts Company, a manufacturer of lawn and garden products, spearheaded an initiative to create an enterprise data warehouse. After largely completing the project in 2003, Masdea was appointed by top executives to a full-time role that involves "evangelizing" the data warehouse.
"I am now on the business side in a new position that our company feels is critical to maintaining a competitive edge," says Masdea. "My job is to help our management team, sales people and others to leverage the use of knowledge contained in our data warehouse. Whatever they need to make their decisions, I make sure they know how to get it and how use it."
Masdea has been so successful as a BI evangelist that last year she was given a "Sales Achievement Award" by the North American sales organization for the work she did to help them drive the business with information. This may be the first time a BI person received a sales award, but it shouldn't be the last!
How does one become a BI Director? What personal characteristics, training and skills are required to rise to the top of the BI heap?
Personal Characteristics. On average, BI Directors are 42-year-old males with almost seven years of BI experience and almost seven years of tenure at their current firm. (See Figure 3.) This level of BI experience surpasses all other BI roles, except that of Chief Architect, which has 7.3 years of BI experience.3 BI Directors don't have a lot technical certificates (.8), but they do have a higher concentration of professionals with master's degrees than other BI positions. Most importantly, almost one-third of BI Directors come from a business background, not a technical one.
Multiple Roles. This last characteristic probably explains why less than half of BI Directors focus full time on BI projects. Because many BI Directors are actually businesspeople with strong technical skills, they often play myriad roles in their organizations. In fact, BI Directors fill an average of 2.6 secondary roles, with program manager and sponsor/driver topping the list.
"BI is just one of many things I'm responsible for," says Martin Summerhayes, a business program manager at Hewlett Packard who spearheaded the firm's balanced scorecard initiative, including hiring the technical staff, gathering requirements from business folks, defining the general architecture and selecting the application's platform and tools.
Like Summerhayes, almost one-quarter (24 percent) of BI Directors have final purchasing authority for BI products, which is the highest percentage of any position we examined by a wide margin. (According to the Computerworld study, the CIO and director of IT still outrank BI Directors and probably retain purchasing authority along with business executives for most capital expenditures.)
On the whole, BI Directors are very satisfied in their jobs, which is not surprising given their compensation and level of authority in their IT organizations. It's also no surprise that few are looking for new jobs or feel compelled to moonlight outside of work.
Gender Gap. Obviously, not all BI Directors are male, but this position is more heavily dominated by men than the BI profession in general. Eighty-five percent of BI Directors are men compared to 74 percent of all BI professionals. The percentage of females climbs to more than 25 percent in many of BI's nontechnical roles, such as project manager, program manager and business requirements analyst.
As the main liaison between the business and IT, the BI Director shoulders enormous responsibility to sell BI projects to the business and deliver value that warrants their investments in the technology. With heavy responsibilities come significant rewards. Thus, it's no surprise that BI Directors have ascended into the ranks of top IT management and are now among the highest paid IT professionals.
For more information on related topics visit the following related portals...
Business Intelligence (BI).
Wayne Eckerson is director of research at The Data Warehousing Institute, the industry's premier provider of in-depth, high-quality training and education in the data warehousing and business intelligence fields. He can be reached at firstname.lastname@example.org.