220 Int. J. Business Information Systems, Vol. 1, Nos.

1/2, 2005

The Ladder of Business Intelligence (LOBI):

a framework for enterprise IT planning and
architecture

James E. Cates
LOBI Group, LLC
4960 Almaden Expressway
No. 351, San Jose, CA 95118, USA
E-mail: jecates@prodigy.net

Sam S. Gill*
San Francisco State University
1600 Holloway Ave.
San Francisco, CA 94132, USA
Fax: 650–341–1494
E-mail: sgill@sfsu.edu
*Corresponding author

Natalie Zeituny
NZconsulting, 58 West Portal
San Francisco, CA, 94127, USA
E-mail: natalie@nzconsulting.com

Abstract: The LOBI Framework is a methodology that facilitates the creation

of an Information Technology (IT) plan and the design of IT architecture for a
business. The LOBI Framework derives the plan and the architecture on the
basis of the business objectives through a detailed analysis of the people,
process, and technology mix of a business. This paper shows how the LOBI
framework forces alignment between the business strategy and the IT strategy
through a step-wise methodology that inductively proceeds from vision,
through mission and core processes, to IT initiatives. The LOBI Framework
also allows business intelligence to be defined in an operational sense, and
shows how the effectiveness of utilising business intelligence can be measured,
and how it is possible to differentiate between effectiveness and efficiency as a
measure of intelligence value. Finally, the LOBI Framework facilitates
mapping all IT Technology used in a business to six levels of intelligence.

Keywords: Ladder of Business Intelligence (LOBI); IT/business alignment;

people/process/technology; intelligence modelling; BRIA; IT budgeting;
framework; business role; business process; technology; balance score card.

Reference to this paper should be made as follows: Cates, J.E., Gill, S.S. and
Zeituny, N. (2005) ‘The Ladder of Business Intelligence (LOBI): a framework
for enterprise IT planning and architecture’, Int. J. Business Information
Systems, Vol. 1, Nos. 1/2, pp.220–238.

Copyright © 2005 Inderscience Enterprises Ltd.

 The Ladder of Business Intelligence (LOBI) 221

Biographical notes: James E. Cates is currently the CIO of a Silicon Valley

high-tech company with over a $1B dollars in revenue. He has over 30 years of
experience in the Information Technology field. He spent 20 years at IBM in
various R&D management positions developing IT tools for thousands of
customers. He has also spent over ten years in Silicon Valley as the CIO,
VP/IT, and corporate process officer of four high-tech companies, each creating
over $500 million in revenue.

Sam S. Gill is Professor and Chair of the IS department at San Francisco State
University (SFSU). Dr. Gill’s career spans five decades of computing. Dr. Gill
publishes, consults, and teaches on the planning, architecture, design,
development, and implementation of information technology solutions. His
current interests include enterprise architecture, service-oriented architecture,
and service level agreements.

Natalie Zeituny has over 15 years of experience with world-class companies

specialising in business strategy, process management, and technology
implementation. Zeituny has held a number of highly visible leadership
positions, including the design and implementation of corporate and IT process
architecture, business effectiveness and efficiency models, and alignment of
cross-functional business operations. She is currently managing her consulting
firm based in San Francisco, California.

1 Introduction

The LOBI1 framework is an inductive methodology that facilitates the creation of an

Information Technology (IT) plan and the design of IT architecture for a business. The
LOBI Framework has been developed over a span of 30 years of grappling with issues
such as how to align IT strategy with business strategy and how to measure the value
of information.
The LOBI Framework bases an IT plan and its concomitant architecture on business
objectives through a detailed analysis of the people, process, and technology mix of
a business.
This paper shows how the LOBI framework forces alignment between the business
strategy and the IT strategy through a step-wise methodology that inductively proceeds
from vision, through mission and core processes, to IT initiatives. The LOBI framework
also allows business intelligence to be defined in an operational sense, and shows how
the effectiveness of utilising business intelligence can be measured, and how it is possible
to differentiate between effectiveness and efficiency as a measure of intelligence value.
This paper, shows why Carr, in his article ‘IT doesn’t matter’ (Carr, 2003), was both right
and wrong. Finally, the LOBI framework facilitates mapping all IT technology used in a
business to six levels of intelligence.
This paper also reviews the findings from several case studies that have utilised either
a full or partial LOBI framework implementation or the impact they have had on the
planning and architecture of the IT of a business.
222 J.E. Cates, S.S. Gill and N. Zeituny

2 LOBI purpose and benefits

The LOBI framework addresses a major business issue: can a methodology be defined
that can look at a business strategy and the people, processes, and technology of an
organisation and derive from them a plan and architecture for information technology.
The LOBI framework postulates that there are ten steps that focus in turn on the people
aspect, the process aspects, and the technology aspects of a business and that taken as a
whole facilitate the development of an IT plan and architecture.
The LOBI framework provides five distinct benefits to a business as shown in
Table 1. The first benefit is to inductively facilitate the alignment of IT with the business
strategy through a step-wise methodology that in general starts with a business vision,
and continues with an analysis of objectives, core processes, and their corresponding
metrics, and culminates with a definition of the IT initiatives that will enhance the value
of intelligence for a business.

Table 1 LOBI benefits

Benefit Description
Alignment Facilitate alignment of IT with business strategy
Operational intelligence Define intelligence in an operational sense
Value of IT initiative Ensure that investments in IT are inline with business goals and that
the value derived from an IT initiative is measurable
Effectiveness Contribution to the effectiveness of a business
Levels of intelligence Map all IT technology that can exist in a business to distinct levels
of intelligence

The second benefit that can be derived from LOBI is to allow business to define
intelligence in an operational sense. People in a business make decisions that require a
specific level of intelligence that improves the decision and the value to the business as a
whole. The LOBI framework allows a business to define the level of intelligence required
for any decision made within a business.
The third benefit from the LOBI framework step-wise approach is to inductively
derive the value from different IT initiatives and thus ensure that investments in IT are in
line with the business goals and that the value derived from an IT initiative is measurable.
The fourth benefit from a LOBI implementation is to measure the value of each IT
initiative in its contribution to the effectiveness of an organisation. In general, a business
can utilise intelligence to derive both effectiveness and efficiency. Should a business
derive only efficiency (a subset of effectiveness), then Nicholas Carr was right, ‘IT
doesn’t matter’, and it is not being utilised as a weapon in a competitive environment. If,
however, IT provides intelligence that can change the effectiveness of decisions within a
business then IT does matter.
The final benefit from the LOBI framework is to map all IT technology that can exist
in a business to distinct levels of intelligence. By mapping all IT technology to six
distinct levels, LOBI facilitates making value statements about a technology without
understanding the technology itself. In general, technologies that are on a higher level of
maturity bring higher value to an organisation because they address the larger issues that
a business faces.
 The Ladder of Business Intelligence (LOBI) 223

The five benefits that have been identified for the LOBI framework: alignment,
operational intelligence, IT initiative value, effectiveness, and levels of intelligence,
differentiate LOBI from other methodologies for IT planning and architecture.

3 Research questions and research methodology

The five benefits that have been presented in the previous section lend themselves to a
formulation of five distinct hypotheses that can be tested as a measure of the degree to
which the LOBI framework enhances IT planning and architecture in a business. The five
hypotheses are listed in Table 2.

Table 2 LOBI hypotheses

Hypothesis Claim
1 Using the LOBI framework enhances the alignment of IT with business strategy.
2 Using the LOBI framework all business intelligence can be defined as a function of a
business role with a business process.
3 Using the LOBI framework the value of IT initiatives can be identified, measured,
and prioritised according to business goals.
4 Using the LOBI framework enhances the effectiveness of a business as measured by
a metric such as a balanced score card.
5 Using the LOBI framework all IT technology in use in a business can be classified to
distinct levels of intelligence.

The five hypotheses presented in Table 2 can be tested empirically. In every business that
uses the LOBI framework, each hypothesis can be tested and measured separately.

4 LOBI framework concepts

This section presents some the key concepts associated with the LOBI framework.

4.1 Balanced score card

The ability of a business to achieve a balanced success in pursuing its endevour
is directly related to the mapping of its business strategy to four perspectives that
include a financial perspective, a customer perspective, an internal process perspective,
and a learning and growth perspective as shown in Figure 1 (Kaplan and Norton,
2004,pp.29–55).
The balanced scorecard provides a mechanism to measure the performance of a
business, taking into account both tangible and intangible outcomes. A complete
discussion on the utilisation of the balanced scorecard in LOBI can be found in
Cates et al. (2005).
224 J.E. Cates, S.S. Gill and N. Zeituny

Figure 1 The balanced scorecard framework

Financial perspective

Business process
Customer perspective Strategy perspective

Organisation learning
perspective

4.2 Business role, business process, and technology

This article focuses on one important aspect of the balanced scorecard: the direct
correlation between the implementation of successful business processes and the success
of a business strategy. Business processes do not happen in a vacuum; usually there is
more than one business role associated with a business process. Figure 2 depicts the
relationship between business roles, business processes, and technology.

Figure 2 Relationship between business role, business process, and technology

For business roles involved in business processes and activities to contribute value to the
overall mission of an organisation they have to be supported by the proper level of
technology. The business role, business process, and technology is often referred to as the
‘LOBI 3-tuple’:
1 A Business Role (BR)
A Business Role (BR) is a unique business function within an organisation that
is responsible for activities within a specific set of business processes. The
responsibilities include the management of the cost, time, quality, and mapping of
the function to the overall corporate goals. A business role is sometimes associated
with human resource job descriptions. Every organisation, in order to manage its
daily operations, assigns specific roles to a specific set of work content, or of ‘things’
to be thought about, analysed, designed, built, and monitored – that would be
considered a business role.
 The Ladder of Business Intelligence (LOBI) 225

2 A Business Process (BP)

A Business Process (BP) is defined as a sequence of steps, tasks or activities that
utilise resources, that converts inputs into outputs. Every process has an input,
processing activity, and output that is referred to as an IPO diagram. A process can
also be defined as a series of related activities and conversions that are designed to
gather input, and convert it into a desired result. A process may be anything from
billing customers to creating an educational programme, to designing an exhibit. By
definition, a process has several key characteristics: it has specific standards, which
determine if it is done correctly, and which allow it to be repeated by others; it
consumes resources such as time, money, or human effort; and it responds to quality
control mechanisms that can help the process be done more efficiently. A more
efficient process might result in things being done faster and cheaper, or result in the
creation of a better product or service.
All activities carried out in the context of a business are part of a business process.
We estimate that a business can have anywhere from 400 – 1000 processes and
sub-processes. The LOBI framework focuses on analysing the core business processes
that have the most impact on business performance. Core business processes are defined
as processes that differentiate a business from its competitors and enhance a business’s
competitive advantage.
The LOBI framework examines the processes that have significant impact on cost
benefit, key business performance, customer satisfaction, and quality. Once the core
processes have been identified, LOBI recommends putting a mechanism in place to
continuously improve processes, which are not effective and/or efficient.
Once core processes have been identified, it is important to distinguish the following
categories for the core processes, in order to subsequently prioritise the type of business
improvement effort to focus on Keen (1997):
• An identity process is a process that distinguishes a business for its customers,
investors, and for itself and establishes its competitive edge.
• A priority process is a process that fundamentally affects business performance
and influences how well identity processes are executed and enhance
business competitiveness.
• A support process is a process that is necessary to support, leverage, and optimise
daily operations.
• A mandated process is a process that is mandatory by regulation or law.
• The third tuple in the ‘LOBI 3-tuple’ is technology. Technology is a measure of the
capability of an organisation to utilise intelligence to make decisions that directly
impact its ability to achieve its goals. Business intelligence measures the capacity of
a business to effectively enable business decisions through access to intelligence.
The effectiveness of business decisions is directly related to the intelligence systems’
ability to deliver the right intelligence to the right people, at the right time.
226 J.E. Cates, S.S. Gill and N. Zeituny

4.3 Cycle Time to Intelligence (CTI)

Information technology adds value when it enables a company executive to optimise
decision making and improve employee productivity by improving ‘cycle time to
intelligence’ by business role.
As shown in Figure 3, the contribution of intelligence in improving the internal
processes of a business can be measured by the Cycle Time to Intelligence (CTI). CTI
measures the time it takes a business role to obtain the intelligence needed in the right
format from the time the intelligence is requested until the intelligence is available.

Figure 3 Cycle Time to Intelligence (CTI)

Cycle time

Business role

Intelligence
Cycle time is an important concept that companies use to measure both the effectiveness
and the efficiency of their business operations. The shorter the cycle time, the better
access a business role has to the right information that enables the business role to make
the right decisions. CTI is basically the time it takes a business role to obtain the
intelligence needed in the right format and is measured by the lapse of time from the
identified question, request, or problem until the information, knowledge, or action is
taken to address the question, inquiry, request, or problem.
The time it takes to obtain the information for each set is directly related to the
people, process, and technology the company is using. Businesses that are more aligned
and structured find that technology can better support the intelligence need of their
business processes and CTI is shorter for each business process.
It is important to note that not all business roles necessarily need a faster CTI. It
depends on whether the business role is involved in a business process that is critical to
success and whether minimising CTI is critical.
There is a cost associated with the optimisation of CTI. Usually the lower the CTI
measure is the higher the cost. The LOBI implementation of the balanced scorecard
provides a model for balancing the investment in technology with achieving the correct
level of CTI for each business process that will improve the overall performance of a
business against its mission.
 The Ladder of Business Intelligence (LOBI) 227

4.4 LOBI maturity model

Most business processes involve the creation, the processing, and the sharing of ideas,
possibilities, and initiatives. Those possibilities are transferred and conveyed to the
different entities in a business in varying forms of intelligence such as facts, data,
information, knowledge, understanding, and sometimes using intuition as shown in
Figure 4.

Figure 4 Six levels of LOBI

The LOBI framework can also sometimes be described as a maturity model. The more
mature an entity is (business role, business team, or business unit) in a business, the
higher they are on the LOBI scale. The higher a business is on the LOBI scale, the higher
the effectiveness and efficiency of its decision making. Effectiveness and efficiency in
decision making correspond to the seamless translation of a vision into an actual product
or service; seamless also implies cheaper, higher quality, shorter time to market and
higher revenue.
The LOBI methodology has six levels of maturity, as shown in Table 3. Each level of
maturity is an intelligence level that enables better, deeper, and quicker understanding of
the business environment.
LOBI progressively transforms the raw, unfiltered facts and symbols into
information, knowledge, and eventually intuition to facilitate decision making in a
business. The LOBI, methodology looks at how to provide meaningful, useful, and
accessible data to core entities in an organisation, depending on specific roles.
Analysing data and acting accordingly is a key strategic goal of every business.
Vast quantities of data are of little use if they are not structured and kept in a way
that is readily accessible. A conscious effort to optimise and organise data can
drive productivity, effectiveness, and efficiency toward achieving business goals.
Organisations that can leverage information technology to exploit their data will realise
the competitive advantage for itself. The competitive advantage is in the form of
identifying trends, unusual patterns, and hidden relationships that competitors may
not realise.
228 J.E. Cates, S.S. Gill and N. Zeituny

Most businesses are positioned either at the facts or data levels of LOBI. Businesses
that have advanced are at the information or knowledge or understanding levels, enjoying
a significant competitive advantage over their competitors.

Table 3 Six levels of LOBI maturity model

Step Description
Fact Facts are usually presented as numbers, images, sound, text, words (unfiltered).

Data Data are organised facts, figures obtained from calculations, experiments,
surveys, isolated data.
Information Information is organised data. By taking data and placing it in a context that
produces meaning, we raise to the information level. For example, combination
of data that are related to one another about particular subject creates data.
Information can also be described as data that has been organised and presented
in a systematic fashion to clarify an underlined meaning (patterns).

Knowledge Knowledge is the familiarity with truth principles gained from study examination
research experience.
Understanding Understanding is the utilisation of accumulated knowledge. It is an interpolative
and probabilistic process from previously held knowledge. It is a cognitive and
analytical process, we can take knowledge and synthesise new knowledge
(choice) and determine relationships, patterns trends, and exceptions.

Enabled Enabled intuition is an understanding of fundamental principles embodied within

intuition the nature of a complex real world challenge. It augments the intuitive reasoning
power of the human mind.

4.5 Business Role Intelligence Analysis (BRIA)

The Business Role Intelligence Analysis (BRIA)2 model ties together the business role,
the business process, and the cycle time to intelligence and facilitates the classification of
intelligence available currently and required in the future for each business role in the
organisation. Table 4 presents the detailed columns of a Business Role (BR).
Once the core roles and core processes have been identified for an organisation, the
next step would be to assess the intelligence and the information technology that is
required to support the business roles and processes.
In order to clearly define what success means for a role, a detailed analysis of the
business process that the BR is involved with and business role success metrics must be
undertaken. A successful process outcome is when the process generates and displays the
IV that the BR requires to answer the question set which allows the BR to make a
decision that impacts the business.
The BRIA model can be compiled either for an entire business or for a specific
business domain and include all the business roles relevant to the core processes of a
business or a business domain.
 The Ladder of Business Intelligence (LOBI) 229

Table 4 BRIA columns

Column label Column description

BR Define the business role name [business role]
Top ten Address the top business questions (up to ten) that each business role needs to
have answered in order to be successful [key questions]
I required Identify the intelligence required to answer those questions [intelligence]
I data source Identify quality data sources that are needed in order to generate the intelligence to
answer those questions [data sources]
I frequency Evaluate the time/frequency (when/how often) that the business role needs the
intelligence in order to be successful [time/frequency]
I format Intelligence view/display format (how would the intelligence be presented) [info
display]
I display Intelligence view display device (how would the intelligence be carried and
device transmitted (PDA, e-mail, report) [display device]
CP Core processes (what are the processes that will either create an input or produce
an output (IV) for this business role) [core processes]
Other BR Additional business roles involved [additional BR]
C LOBI level Current LOBI level [current LOBI level] and desired LOBI level [desired
LOBI level]

5 How LOBI works – ten steps to successful implementation

In this section, the ten major steps to the successful implementation of the LOBI
framework are shown in Figure 5. Each of the steps requires a model or a template for its
successful implementation. A presentation of the various models and templates for each
step can be found in Cates et al. (2005). The ten steps apply uniformly to companies with
varying sizes, in different industries, and with different geographical dispersion. A short
synopsis of the ten steps follows. The first four steps are related to the people aspect of
the LOBI Framework.
230 J.E. Cates, S.S. Gill and N. Zeituny

Figure 5 Ten steps to successful LOBI implementation

People Process
1. Agree on business vision, mission, core questions 5. Create process roadmap (ownership,
2. Agree on enterprise roadmap: vision, objectives, metrics, health assessment, improvement
processes, initiative alignment prioritisation)
3. Form enterprise process management team and program 6. Create ‘AS IS’ and ‘TO BE’ core process
management office flows and perform gap analysis
4. Executive business role intelligence analysis 7. Business role intelligence analysis: link
business roles to core processes and to
intelligence required

LOBI framework

People
process
technology

Technology
8. Complete ‘AS IS’ technology
architecture
9. Agree on targeted operational
LOBI levels and budget allocated
10. Identify ‘TO BE’ technology and
perform gap analysis; agree on
‘TO BE’ technology for each level
for key roles; implement new
technology architecture

5.1 Agree on business vision, mission, core questions

The first step in the implementation of LOBI is to engage the executive team of a
business in strategic planning sessions. These sessions encourage an investigation,
inquiry, and brainstorming about the company vision, its mission, and address core
questions such as:
• What are the business (unit) core strengths?
• What are business (unit) challenges?
• What are business (unit) opportunities?
• Is the business (unit) consistent in delivering products and services?
• Does the business (unit) have a methodology for continuous success?
• How well are business units aligned and moving toward the same goals?
• Are the right resources working on the right initiatives?
• Can the business (unit) sustain growth?
• Can the business (unit) be both innovative and effective?
• Can the business (unit) scale and become a $XM organisation and still have a
flawless customer experience?
 The Ladder of Business Intelligence (LOBI) 231

5.2 Agree on enterprise roadmap: vision, objectives, metrics, processes,

initiative alignment
The result of the planning effort is articulated in a company roadmap. The roadmaps, one
for the business as a whole and one for each business sub-unit, include annual objectives
or goals that the company defines in order to move toward its vision. Objectives are
directly correlated with the vision and include metrics that can measure progress. The key
metrics that most businesses look at are: quality of product or service, development cycle
time, product time to market, revenue, market share, and cost/expense/budgets. The
next phase within this step is to define the business core processes. In particular, identity
core processes distinguish the products and services of a business from those of
other businesses.
The final phase of Step 2 is to identify the initiatives related to the core processes that
would help align IT with the business.

5.3 Form an enterprise process management team and programme

management office
The LOBI framework requires a structure for IT governance (Weill and Ross, 2004). IT
governance consists of two organisational structures:
1 The Enterprise Process Management Team (EPMT) is comprised of managers who
are responsible for process improvement throughout the business. EPMT works with
process owners and process teams to continuously improve their processes in order
to make the business operate more effectively and efficiently.
2 The Program Management Office (PMO) allows businesses to execute on their
visions and successfully roll out the initiatives that will drive their core processes.
The PMO is an independent entity that prioritises all the initiatives that the business
is planning and provides assessment, measurement, planning, guidance, and
reporting for a portfolio of business initiatives.

5.4 Executive business role intelligence analysis

In this step, a BRIA is performed with the executive team of the company to determine
their needs for IT intelligence. Understanding the intelligence needs of the executive
team facilitates the amalgamation of needs with those of the business roles involved
with the different business processes. Table 5 shows a sample executive team BRIA
for a business.
232 J.E. Cates, S.S. Gill and N. Zeituny

Table 5 Sample executive team BRIA model

Data sources
Role Key questions Information Data sources exist?
CFO Do I need 1. End of Quarter P&L 1. Cash flow 1) Yes
external funding projection
2. Projected next quarter
for next quarter?
sources and costs 2. Utilisation of line 2) No
of credits and
3. Projected next quarter
costs
usage and return 3) Yes
3. Projected portfolio
4) No
4. Budgets
VP sales Do I need to add 1. Market share 1. Total revenue sales 1. Yes
more sales
2. Sales person efficiency 2. Sales team 2. No
people?
performance
3. Sales team capacity
4. Product adequacy in
meeting market needs
VP Demography What is the demographic Marketing application Yes
marketing TAM profile of region x?
competition
What is the TAM for
product X?
What is our competitors
market share?

The next three steps are related to the process aspects of the LOBI framework.

5.5 Create process roadmap (ownership, process health assessment,

improvement prioritisation)
The process roadmap facilitates agreement on the core activities that need to be managed
and assigns ownership over them. It also includes defining the mechanisms for the health
assessment of processes and the prioritisation of process improvements. Figure 6 shows
some suggested criteria for measuring the health of the core business activities.
An organisation would not be able to climb up the LOBI ladder to higher levels of
intelligence use and attain effectiveness and efficiencies in its business operations if its
core processes are broken and are coded red.
 The Ladder of Business Intelligence (LOBI) 233

Figure 6 Business activity health measurement

5.6 Create ‘AS IS’ and ‘TO BE’ core process flows and perform gap analysis
In this step, the flow of the ‘AS IS’ core processes is mapped as well as the proposed
‘TO BE’ core processes that are based on the results of the previous step process
improvement. The mapping results in a gap analysis that indicates the gaps between the
current and the desired core process implementation.
A second phase within this step focuses on cross-functional collaboration. Most
businesses have multiple business units, multiple executives, multiple customers,
multiple employees, multiple vendors, partners, and suppliers. The key to being able to
perform well is the ability to effectively collaborate across functional boundaries, initially
among internal functions and eventually among external functions.
A key component of business success is the ability to collaborate across functions in
bringing forth new ideas, and communicating and executing the new approaches.
Usually functional business units can operate really well in silos, but the corporate
effective and efficient process initiatives, the ones that have the most impact, require
cross-functional collaboration. For example, in order to clearly define a product
forecasting business process, there needs to be mindsharing and collaboration between
the sales, marketing, finance, product management, and operations business functions.
Cross-functional collaboration is a challenge for most businesses since process
ownership is difficult to assign, manage and measure.

5.7 Business role intelligence analysis: link business roles to the core processes
and intelligence required
Once the ‘AS IS’ and ‘TO BE’ core processes have been defined, a BRIA can be
undertaken for all the Businesses Roles (BR) involved in the selected processes. The
result of the BRIA is an identification of the intelligence needs for the processes being
worked on.
The final three steps are related to the technology aspects of the LOBI framework.
234 J.E. Cates, S.S. Gill and N. Zeituny

5.8 Complete ‘AS IS’ technology architecture

The analysis applied to processes must be applied to the technology architecture. In
this step the technology architecture supporting the current core business processes must
be documented:
• web-related (web server, application server, content management, portals, browser)
• security (authentication, authorisation, public key, virus protection, firewall,
directory services)
• business applications (enterprise resource planning, customer relationship
management, e-business, contact management, resource management)
• cross-functional tools (business intelligence, collaboration, electronic mail,
individual productivity)
• application development suites
• data access, middleware, business data stores, process management systems
• networks (remote access, wireless, TCP/IP, FTP)
• platform (servers, workstations, operating systems, storage).

5.9 Agree on targeted operational LOBI levels and budget allocated

In this step, the business managers will review the different initiatives and identify the
target LOBI level that it wants to attain for its core processes. The agreement on a
targeted LOBI level must be supported by the appropriate budget allocation for attaining
the change in the LOBI maturity level. In this step, the balance scorecard is utilised to set
operational and financial goals.

5.10 Identify ‘TO BE’ technology and perform gap analysis; agree on ‘TO BE’
technology for each level for key roles; implement new technology
architecture
The final step is for IT management to propose a ‘TO BE’ technology that addresses all
the business goals and to achieve the desired LOBI level. The proposal includes all the IT
architecture components, the process components, and the enterprise roadmap and takes
into consideration the allocated budget.
The outcome from this step is the technology architecture implementation plan that
includes a detailed budget, a detailed acquisition plan, and a detailed implementation plan
for the ‘TO BE’ state.

6 Comparing LOBI with other methodologies

Using the five benefits that have been identified for LOBI as a measure: alignment,
operational intelligence, IT initiative value, effectiveness, and levels of intelligence, a
comparison can be drawn between other methodologies that have been proposed and
LOBI. Table 6 summarises the comparison between the various methodologies.
 The Ladder of Business Intelligence (LOBI) 235

Table 6 Comparing LOBI with other methodologies

Benefit TOGAF Boar Luftman McGovern Zachman LOBI

Alignment Inductively Inductively A stepwise Not addressed Not Inductively
facilitated facilitated refinement addressed facilitated
using ADM process using the
LOBI ten
steps
Operational Intelligence Intelligence Intelligence No decision No decision Intelligence
intelligence identified identified for identified for making focus making identified for
using EC decisions decisions focus decisions
using BRIA
Value of IT No Portfolio Portfolio No initiatives No IT initiatives
initiative initiatives approach to approach to initiatives derived and
initiatives initiatives value
identified
Effectiveness No measures No qualitative No qualitative No qualitative No Effectiveness
measures measures measures qualitative measured
measures through
balanced score
card
Levels of Partial Only facts, No distinction No distinction No Six levels
intelligence distinction data, and distinction identified
information
Using RB
identified

Table 6 shows that The Open Group Architecture Framework (TOGAF)3 developed by
The Open Group facilitates alignment through the Architecture Development Method
(ADM), defines intelligence through the Enterprise Continuum (EC), does not address
the value of IT initiative and effectiveness, and partiality addresses the levels of
intelligence through its Resource Base (RB).
Table 6 also shows that Boar (2001) presents a detailed approach to planning and
itemises the salient issues that should be considered but does not provide a level of
intelligence distinction for decision making. Luftman et al. (2004) emphasises strategic
and tactical alignment between an information system and the overall organisation and
offers mechanisms that would facilitate the alignment and the key practices in IT
management that would support the alignment. McGovern et al. (2004) presents practical
steps in creating an enterprise IT architecture does not address alignment or operational
intelligence. Zachman (O’Rourke et al., 2003) offers a formal framework that is a highly
structured way of defining an enterprise’s systems architecture. It uses a grid model
based around six basic questions (what, how, where, who, when, and why) asked of
five nominated stakeholder groups (planner, owner, designer, builder, and subcontractor)
to give a holistic view of the enterprise which is being modelled but does not
address alignment.
236 J.E. Cates, S.S. Gill and N. Zeituny

7 Case studies

The LOBI Framework has evolved over time. The details of the framework have been
flushed out through numerous implementations. Each case study has brought new
insights into the implementation of the LOBI framework.
Nine case studies have been conducted; through the case studies the five hypotheses
presented in Table 2 have been tested. The five hypotheses: Hypotheses 1 through
Hypotheses 5 represent the degree to which the five benefits that have been identified
for LOBI as a measure: alignment, operational intelligence, IT initiative value,
effectiveness, and levels of intelligence, have been realised as a result of a LOBI
framework implementation.
With the exception of Case 3 all other cases were partial implementations of LOBI
due to time and budget constraints. Table 7 shows that in businesses that have performed
a full implementation of LOBI, all five benefits have been attained. Businesses that
have done only a partial implementation of LOBI have derived only a subset of the
five benefits.

Table 7 LOBI benefits by company

LOBI steps Operational Value of IT Levels of

Case performed Alignment intelligence initiative Effectiveness intelligence
1 1,2,5,6,8,10 Partial Yes No No Yes
2 1,2,3,6,7,8,9,10 Partial Yes No Partial Yes
3 1–10 Yes Yes Yes Yes Yes
4 1,2,4,5,6,7,8,10 Yes Yes No Yes Yes
5 1 No No No No No
6 1,2,4,7 Yes No No No Yes
7 1,2,3,5,6 Yes Yes No No Yes
8 1–7 Yes Yes No No Yes
9 1,2,5,6 Yes No Yes No Yes

8 Lessons learned and conclusion

Based on the implementations of the LOBI framework to date it has become obvious that
its main strength is in its adaptability to the needs of specific businesses. Each new
implementation raised new issues that altered the details for each step, but the underlying
deductive structure has remained the same.
Furthermore, a preliminary study of enterprise IT planning and architecture has
shown that while other businesses have not heard of the LOBI framework they still use
some of the same steps in their efforts.
This article has shown how a business can derive five important values from the
LOBI framework: alignment, operational intelligence, IT initiative value, effectiveness,
and levels of intelligence, and how these values have been partially or completely
attained depending on the completeness of the LOBI implementation.
 The Ladder of Business Intelligence (LOBI) 237

The LOBI framework provides business executives a better understanding of their

core business processes and the intelligence required to support them. In particular, the
BRIA model lets business executives discuss intelligence needs in their own vocabulary
without being intimated by technology jargon.
Finally, the LOBI framework provides rigor and structure to enterprise IT planning
and architecture.
Currently the LOBI framework is being used by additional CIOs and middle
management to plan and design a complete IT architecture or parts of it. LOBI is also
being used by IT technology providers interested in understanding the benefits that their
technology can contribute to their business. In addition, the LOBI framework is being
used by investors to assess the value of an IT technology and its impact on businesses.

References
Boar, B. (2001) The Art of Strategic Planning for Information Technology, 2nd edition, Wiley.
Cates, J.E., Gill, S.S. and Zeituny, N. (2005) The Ladder of Business Intelligence (LOBI) – A
Framework for Enterprise IT Planning and Architecture, Unpublished Manuscript.
Carr, N.G. (2003) ‘IT doesn’t matter’, Harvard Business Review, May.
Kaplan, R.S. and Norton, D.P. (2004) Strategy Maps – Converting Intangible Assets into Tangible
Outcomes, Harvard Business School Press.
Keen, P. (1997) The Process Edge: Creating Value where it Counts, HBS Press.
Luftman, J. et al. (2004) Managing the Information Technology Resource Leadership in the
Information Age, Pearson Education.
McGovern, J., Ambler, S.W., Stevens, M.E., Linn, J., Sharan, V. and Jo, E.K. (2004) A Practical
Guide to Enterprise Architecture, Pearson Education.
O’Rourke, C., Fishman, N. and Selkow, W. (2003) Enterprise Architecture Using the Zachman
Framework, Course Technology.
Weill, P. and Ross, J.W. (2004) IT Governance, HBS Press.

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238 J.E. Cates, S.S. Gill and N. Zeituny

Notes
1 Ladder of Business Intelligence (LOBI) is a registered service mark with US registration
Number 2711496 as of April 2003.
2 Business Role Information Analysis (BRIA) is a service mark request pending registration.
3 TOGAF, The Open Group Architecture Framework, http://www.opengroup.org/architecture/
togaf