Business Intelligence & Organizational structures

Structure follows business intelligence strategy. To accomplish goals, an organization needs a formal and informal structure. People perform their work within an organizational structure, “the total amount of ways how work is distributed in different tasks and the way how, after that coordination, between those tasks is realized” (Mintzberg, 1983).

The formal face of organizations

The structural parts (for example departments) are the formal face of an organization. It is the formal placing for trading with customers and partners. The structural parts are responsible for switching processes on or off in order to produce requested products and services.

Organizational structures can be used as metaphors

A large number of organizational structures exist, which can be used as meaningful metaphors or visual models for the manager. For example, organograms that are painted with different colors corresponding to different degrees of results will provide managers with a natural and perceptible model where they can quickly see if and where things will go wrong or not. These structures vary between different organizations but are also subject to variation within the organization. The distribution of work and how it is coordinated, can be divided according to:

1. The company in Five (Mintzberg, 1983) which consists of senior management, middle management, a labor force, techno-structure and supporting departments. These structures are often more perceptible in very large organizations.
2. The simple structure, which consists of a single director, a staff department, inbound logistics, operations and outbound logistics. Such organizations do not have middle management and a techno-structure.
3. The matrix structure, where the tasks are coordinated by projects.
4. The shareholder structure: subsidiaries of the company and their shares.
5. The divisional structure; here the work is divided corresponding the products that are produced. Divisions of large organizations can have in turn their own structure. In fact, it can be perceived as a distinct organization within a larger total.
6. The geographical structure, where the work is grouped according to the locations of the point of sales or resources of production.

Geographical views can be presented as maps

These structural views can be supported by a user interface that reveals the characteristics of the particular structure. Geographical views can be for instance presented as maps and shareholder structures as node-link diagrams. These views are not exclusive; one organization can have the five main components of Mintzberg, a divisional structure and a geographical structure at the same time. Further, the structure of the organization is naturally perceived from top to bottom (vertically) as opposed to processes.

Centralized versus decentralized

Another significant feature of a structure is whether the division is decentralized and centralized, which may indicate if an organization is flat or has many levels from the top downwards. Flat organizations are considered to perform less drill-down operations. However, they will perform more exception reporting and ranking operations since the span-of-control is much higher than in centralized and hierarchical shaped organizations. Exception reporting and ranking are excellent operations when business intelligence users have to deal with many descendants that belong to the same group.