Aligning BI investments and the bottom line nw

Copyright DecisionPath Consulting 2011 — All Rights Reserved

Aligning BI Investments and The BottomAligning BI Investments and The Bottom--LineLine

The Role of Business RequirementsThe Role of Business Requirements

Nancy Williams, VPDecisionPath Consulting

[email protected]

2Copyright DecisionPath Consulting 2011 — All Rights Reserved

In the Context of Business Processes

Equals Business Intelligence and Business Results $$$

Management Processes, e.g.

Planning, Budgeting, Controlling

Customer Processes, e.g.

Marketing, Sales, Customer Service

Operating Processes, e.g. Manufacturing, Order Fulfillment,

Billing

Business Measurement

& AnalysisBusiness

InformationBusiness Decisions

Business Actions

The BI Information Paradigm


• Interactive, both Forward-looking and Retrospective

• Cross-system, cross-functional view; strategic, tactical, operational

• Actionable — purpose is enabling improved business performance

• Leverages special “data pre-positioning”approaches and tools to simplify analysis by end-users

• Static and Retrospective

• Frequently single system operational view

• Not necessarily actionable or decision-oriented

• No special data architecture or tools required

Business IntelligenceTraditional Reporting

Repositioning the Value of Information


The Report “Order-Taking” Model

Legacy Information Requirements Paradigm

Individual Business Users Report WritersSpecify Data, Sort Order, FormatUsually Little if Any Business Context


Achieving BI: The New Information Requirements Paradigm

What business information do we need?For what business measurement & analyses?In support of which key business decisions?That impact which core business processes?To deliver how much business value?Via what changes to people, processes, and technology?


The Information Paradigm Shift : Common Approaches That Haven’t Delivered

Data Dumping Big Bang

Focus on Technology Focus on Reports/KPIs


Stage 3Changed Information Usage

Paradigms Across Enterprise

to Leverage BI

Business Value Creation

BI Maturity Greater Maturity

Greater Value

Creation

Stage 2Changed Information Usage Paradigms in One or More Functions to Leverage BI

Stage 1No Change to Information

Usage Paradigms

Stage 0No DW / BI Experience

BI Maturity and Business Requirements:

Legacy Business Requirements Approach

New BI Business Requirements Approach

New BI Business Requirements Approach


Business Value Creation

BI Maturity Greater Maturity

Greater Value

Creation

Status Quo

Improved Reporting

New Information Assets- From Reporting to Analysis and Action

Information Used Across Enterprise to Measure and Manage Business Performance

Stage 3Changed Information Usage

Paradigms Across Enterprise

to Leverage BI

Stage 2Changed Information Usage Paradigms in One or More Functions to Leverage BI

Stage 1No Change to Information

Usage Paradigms

Stage 0No DW / BI Experience

Changing The Paradigm: Pain vs. Gain


BI Maturity- Where Are You?Where Do You Want To Go?

Degr

ee o

f Dat

a Int

egra

tion

Low Integration

MediumIntegration

High Integration

Level of Analytic Capability

ReportingPerformance Measurement

(WHAT?)

PredictionPerformance Forecasting(COMPLEX WHY? WILL? )

AnalysisPerformance Analysis

(BASIC WHY?)

Change in Information Usage Paradigm

Higher BI MaturityDesired Growth


• “As-Is” versus“To-Be” information capabilities linked to business goals and objectives

• Requirements oriented around projects that provide new information capabilities that support improved business performance

• Strong alignment with business strategy and business processes

• Interviews/facilitated sessions, active business oversight

• Data oriented specifications

• Requirements oriented around individual reports/projects that provide access to data subjects

• Little if any business context/business case

• Project or individual data specification, little business involvement

BI RequirementsLegacy Requirements

Repositioning Business Roles and Responsibilities


High-Impact BI Requires Alignment

Business – centric BI

Alignment


Using BI to Meet Business Goals

Purchasing Manufacturing Distribution Service

Finance Human Resources

Planning

Service Marketing Sales

Operating Processes

Customer Processes

Management Processes

Business Intelligence:

• Business information• Business analysis• Decision support


Delivering the Right Information the Right Way

Different BI Tool Capabilities for Different Purposes and Users

BI Capabilities and Tools Aligning BI for User Needs

Execs and Senior Management

Middle Management, Analysts, Power Users

Front Line Users

Decisioning Tiers

Which of my customers are not meeting account-level

sales goals? What are their order patterns?

Which of my customers are not meeting account-level

sales goals? What are their order patterns?

Do we have the right pricing strategy to optimize the

balance between risk and return? How has pricing

impacted sales and margins?

Do we have the right pricing strategy to optimize the

balance between risk and return? How has pricing

impacted sales and margins?

For which channels and products are sales declining?

Why?

For which channels and products are sales declining?

Why?

Planning, ScorecardsWhat do I want to happen?

Forecasting, Predictive Modeling, Data MiningWhat do I expect to happen?

OLAP, Data Mining, Advanced VisualizationWhy did it happen?

Scorecards, Reports, AlertsWhat happened,as related to goals?

Reports, Dashboards, Alerts, OLAP

What happened (or is happening right now)?

Related Tools & TechniquesTypes of Business Intelligence (BI)


Execute BI Projects

Execute BI Projects

SpecifyBusiness Needs

AssessRisks

DetermineHow to Proceed

Reduce Risks, Optimize Costs

CapturePlanned ROI

Create a BI Strategy

Create a BI Strategy Assess BI RiskAssess BI Risk Develop BI

RoadmapDevelop BI Roadmap

Roadmap Phase Deliver & Impact Phases

…Execute BI

ProjectsExecute BI

ProjectsLeverage BI for Business

Results

Leverage BI for Business

Results

Execute BI Projects

Execute BI Projects


Results


Results

Execute BI Projects

Execute BI Projects

Leverage BI for Business Results

Leverage BI for Business Results

Program Management

BI Pathway Approach to Requirements

Aligning BI Investments with the Bottom Line Achieving Business Value


Aligning BI Investments for Business Impact

Create a BI Strategy

Create a BI Strategy Assess BI RiskAssess BI Risk Develop BI

RoadmapDevelop BI Roadmap

BI Opportunity PortfolioBI Opportunity Portfolio

BI Business CaseBI Business Case

BI Requirements Definition

BI Requirements Definition

BI Alignment & Governance RiskBI Alignment &

Governance Risk

BI Delivery RiskBI Delivery Risk

BI Business Adoption Risk

BI Business Adoption Risk

BI Source Data AnalysisBI Source Data Analysis

Define Prioritized BI Portfolio, Program Plan

& Roadmap

Define Prioritized BI Portfolio, Program Plan

& Roadmap

Define BI Performance Measurement ProgramDefine BI Performance Measurement Program

Define Data Architecture &

Technical Strategy

Define Data Architecture &

Technical Strategy

Time-boxed BI Planning Effort

3-4


BI Requirements and Roadmap Effort

Risky: Limited, Project-level Requirements Effort

Risky: “Big Bang” Program-level

Requirements Effort

Optimal: Time-boxed BI Program Level

Requirements


BI Opportunity Checklist

Opportunity Checklist:What business goals and strategies are in focus?As is definition:

What information is currently available to support these business goals and strategiesWhat business questions can’t be answered and why is this a problem?

To be definition:What type of BI capability (provide name) is needed?How will this BI capability address the business problem? What specific business questions need to be answered?

What business improvement opportunities can be realized through using this BI capability?How does this help achieve business goals and strategies?How will performance improvements be measured?

Opportunity n


Developing the BI Opportunity Portfolio

Plums

Why Do It?Easy Wins

High Risk / Reward

Risk HighLow

Bus

ines

s Im

pact

Low

High Revenue Management

Customer Service Anal.

Inventory Management

Category Management

Supply Chain Analysis

Plums

Why Do It?Easy Wins

High Risk / RewardPlumsPlums

Why Do It?Why Do It?Easy WinsEasy Wins

High Risk / Reward

High Risk / Reward

Risk HighLow Risk HighLow

Bus

ines

s Im

pact

Low

High

Bus

ines

s Im

pact

Low

High Revenue Management



Category Management


Revenue Management

Revenue Management





Category Management

Category Management



What specific BI project opportunities exist to deliver business value?


Prototyping the BI Application

Execs and Senior Management

Middle Management, Analysts, Power Users

Knowledge Workers, Casual Users

User Profiles

Business Process:Customer Service -

Order Fulfillment

Business Activity

Business Scenario

Business Decisions

Manage customer relationships

Offer promotions to retain these customers

Correct cause of lower fill rates (underestimated sales forecast, manufacturing problem, distribution center backlog)

Business Process:Customer Service -

Order Fulfillment

Business Activity

Business Scenario

Business Decisions

Manage customer relationships

Offer promotions to retain these customers

Correct cause of lower fill rates (underestimated sales forecast, manufacturing problem, distribution center backlog)

Explore the orders by product and location

Compare to target fill rate and explore year to date trends

Look at order fill rate by customer

This data use…

Identify common traits for lower order fill rates (similar products, shipping location, etc)

We are not meeting target fill rates for these customers and service levels have dropped

One set of customers are lower than the average

Leads to this information…

Explore the orders by product and location

Compare to target fill rate and explore year to date trends

Look at order fill rate by customer

This data use…

Identify common traits for lower order fill rates (similar products, shipping location, etc)

We are not meeting target fill rates for these customers and service levels have dropped

One set of customers are lower than the average

Leads to this information…

Usage Scenarios

Dashboards, Scorecards

OLAP, Ad-Hoc Query

Reports

Delivery Methods

Who will use the information?

How will they use the information?

How should the information be

delivered?


From BI Opportunity to Bottom Line Results


Critical Success Factors- BI Maturity and Business Impact

• Executives embrace the new information paradigm

• Belief amongst business sponsors that information provides competitive advantage

• BI is positioned as a business initiative; new requirements approaches are used that identify and explicitly align new BI capabilities that will support/enable business goals and strategies

• BI is incorporated in supporting/changing business processes to support optimal business performance

• The BI team is viewed as strategic, has a “seat at the table”, and is actively involved in a business partnership on an ongoing basis


Questions and Discussion

Documents

Aligning BI investments and the bottom line nw