Business Intelligence: Falling Short Annual Lunch - Keynote... · 2018-08-09 · Business Intelligence can be defined as the analysis of information for operational (what is happening),

Business Intelligence: Falling Short

Information Resource Management Association of Canada –Annual Lunch - June 25, 2003

© 2003 Cap Gemini Ernst & Young - All rights reserved1

IRMAC - Annual Lunch, June 25, 2003

Copyright Statement

• This document is protected under the copyright laws of Canada and other countries as an unpublished work. This document contains information that is proprietary and confidential to Cap Gemini Ernst & Young. Any duplication, use or disclosure in whole or in part of this information without the express written permission of Cap Gemini Ernst & Young is prohibited.

©2003 Cap Gemini Ernst & Young (unpublished). All rights reserved.



Topics

• Introduction

• Characteristics of Successful and Unsuccessful BI Environments

• Framework and Key Building Blocks to Successful Implementations

• Moving Forward



Was Darwin Right When It Comes To BI?

“You do not have to do this, survival is not compulsory!”

Dr. W. Edwards Deming



So Then…Why Build a BI Environment?

“The significant problems we face cannot be solved at the same level of thinking we were at

when we created them .”

Albert Einstein (1879 - 1955)



Business Intelligence as Modern Alchemy

“BI is a general term for applications, platforms, tools and technologies that support the process of exploring business data, data relationships and trends.

BI applications provide companies with the means to gather and analyze data that facilitates reporting, querying and decision making.”

-DM Review

Business Intelligence can be defined as the analysis of information for operational (what is happening), tactical (what has happened) and strategic (what is likely to happen) purposes across the organization to enable and support proactive and fact-based decision-making



BI Is Projected To Have Double Digit Growth

Past (double digit decline) Now (double digit growth)

Portals &Web Enablement

EAIand

associated SI

ERP Tail: Harmonization/

OptimizationHR, SRM, PRO, PLMData Management (BI,

Content Management, Mining)Security / Disaster Recovery

Network Storage Activation

Size ($B)

8.5

17.4

8.2

6.2

Open to suppliers,customers and employees

Finish ApplicationBackbone

LeverageInstallation

Safety

Custom Software Development on mission critical value added

applications:Command and Control, Defense,

embedded software, mobility

15

30% pricepressure

ERP

SCM

CRM

HRSRM

2002-2003

PLM PRO

+

15

12.6

New Licences business YOY (Q2 -2002)ERP Vendor - 23%CRM Vendor - 41%ERP Vendor - 16%

21

16

2002Growth (%)

40

14

12

28

12

Source: E. Lutaud, IT Services and Competition, 18.07.2002



Why Is The Business Intelligence Market So Robust?

• Many companies are data rich and information poor• Business needs faster access to corporate information for better decision making• Demand for Analytic Solutions is increasing• Earlier investments in ERP/CRM and related systems have not always yielded

better decision making capability• Existing reporting solutions fall short of providing necessary and timely information• Competitive environments demand informed decisions • Strategic information systems are viewed as a competitive advantage

Characteristics of Successful and Unsuccessful BI Environments



Does This Sound Like Your Organization?



We’ve Already Invested Countless $$$…What Happened?

• Data is not organized in a manner that is supportive of business decision making thereby inhibiting the organizations ability to act rapidly

• Reports and definitions from multiple operational or informational systems do not match

• An IT department overloaded with requests for management level reporting

• Decision makers are unable to act with confidence due to their lack of trust in current reporting environments

• A lack of an organization-wide view of operations across multiple departments and locations

“When people point out that a particular report was sourced from our corporate DW,everyone starts to snicker!!!!”



Making BI Work – How Can We Bridge the Gap?

Business IntelligenceBusiness

Intelligence

IT People are from ‘Venus’

Users don’t really know what they need/want and if we gave it to them they wouldn’t know what to do with it anyway!They already have all of the functionality that they’ll ever needWho needs to see what; is it really necessary to give everyone access to ALL the data?Many systems are maintained by business users outside of IT- so they’re on their own!

IT People are from ‘Venus’

Users don’t really know what they need/want and if we gave it to them they wouldn’t know what to do with it anyway!They already have all of the functionality that they’ll ever needWho needs to see what; is it really necessary to give everyone access to ALL the data?Many systems are maintained by business users outside of IT- so they’re on their own!

Business People are from ‘Mars’

How can I get what I need to help make better decisions fasterHow can I get the most comprehensive functionality for the least costTalk to me in a language that I understandWhat is the anticipated ROI –this is not about technologyA lot of data but it is not organized in a useful mannerMultiple data definitions across the enterprise and the corporation

Business People are from ‘Mars’

How can I get what I need to help make better decisions fasterHow can I get the most comprehensive functionality for the least costTalk to me in a language that I understandWhat is the anticipated ROI –this is not about technologyA lot of data but it is not organized in a useful mannerMultiple data definitions across the enterprise and the corporation

Framework and Key Building Blocks to Successful Implementations



Business Intelligence Foresight

“The possession of facts is knowledge, the use of them is wisdom.”

Thomas Jefferson1743- 1826



BI Project Considerations

• Vision & Strategy• Business Analysis / User Requirements Analysis• BI Architecture• Data Movement• Data Modeling & Data Quality• BI Platform• Organization & Governance• Project Management



Vision & Strategy> Importance of Planning

“"You got to be very careful if you don't know where you're going, because you

might not get there.”.”

Yogi Berra



Vision & Strategy> Positioning Your Data Warehouse

Customer Type

Commercial/Commercial/Major AccountsMajor Accounts

Residential/Residential/ConsumerConsumer

ProductProduct Segment / Segment / RelationshipRelationship

FunctionallyFunctionallyIndependentIndependent IntegratedIntegrated

BusinessOrientation

BusinessFocus



Vision & Strategy> Building a World-Class BI EnvironmentIt is imperative to understand all of the factors (some of which are under your control

and some of which are not) that need to be addressed in order for you to be successful. A simple analogy would be in planning a new car – considerations include the design and layout, the quality and type of the fuel desired, and the types of drivers

and journeys expected.

Underlying Architecture Currency, RefreshFrequency, History, and

Detail (granularity)Pre-defined Queries and

Parameter Driven Analysis

Tools & Project ResourcesRequired

Standard Aggregations / Householding

Function Specific Packages

Buy (off-the-shelf) vs. Build Data Quality,Metadata Ad hoc Inquiry

Organizational Alignment/Change Management

Transformation, Scrubbing,Cleansing and Conditioning

Knowledge Discovery/Data Mining

Solution Framework -Development Approach

Solution Content -Data Issues

Solution Usability -Analysis Types



Vision & Strategy> Criteria For Success• Recognition of potential business value of corporate data assets

• Answers the key question – what is required from a BI environment to realize the business strategy

• BI Ownership and strategy definition by the business

Business driven BI definition– creation of a business champion

Formal chain of responsibility or ownership for BI

• Consistency with overall IT governance policies and the enterprise-wide data management strategy







Business Analysis / User Requirements Analysis> What Do They Want To Know?

What is the most effective

method of acquiring, growing

and retaining our customers?

Which customers or markets would be receptive to new policies & services?

Which customersor markets

are candidatesfor accountcancellations?

What price are they willing

to pay?

How often, whenand where are our customers

using our services?

What products and services will

differentiate us?

UnderstandingCurrent & Future

Customers



Business Analysis / User Requirements Analysis> Criteria For Success• Identify and prioritize business objectives, business strategies and critical success

factors

• Align the highest priority business opportunities with the information required to address those opportunities

• Identify the immediate and near-term opportunities of how to leverage information, which information should be targeted first and what is the potential value of leveraging that information

• Identify and structure a business solution around not only the user needs, but also the strategic use of information

• Re-visit alignment between business opportunities with the information required to address those opportunities on a scheduled basis







BI Architecture> In This Corner – Challenger A!?!• “A centrally planned data warehouse is as likely to be

successful as a centrally planned economy… In the long run, a data warehouse should be a decentralized community of data marts, tied together with an architecture that makes them work together effectively, but where true control is ceded to the individual and autonomous remote departments.”

Ralph Kimball



BI Architecture> In This Corner – Challenger B!?!“Building data marts directly from operational systems is

like a seven-course meal of Hershey bars. To a hungry person, the first Hershey bar may look and taste good. The second bar may even taste good. But at some point the hungry person desires the nutrition of a soup, a salad, and a steak. A steady diet of chocolate bars is enough to make a person sick. A steady diet of data marts has the same effect.”

Bill Inmon



BI Architecture> Wait There’s More…• Ralph Kimball’s approach now appears to have been adopted by the

virtual/federated DW vendors.

• When Ralph Kimball stated:

"The data warehouse is nothing more than the union of all the data marts..."

• Bill Inmon countered with:

"You can catch all the minnows in the ocean and stack them together and they still do not make a whale!"



BI Architecture> What’s Really Going On!?!• The Perfect Storm

Students of technology building a solution that is fully compliant with every standard ever defined by every guru in the marketplace

– Spent so long developing the absolutely “perfect” solution that it’s no longer aligned with the business – time has passed it by

• Get In Back - The Vendor’s DrivingGiving the fox the keys to the hen house

– Dump all the detail you can get your hands on in there and keep it coming –someone will need it eventually

• Anarchy In The DWThey say they want data – well they’re going to get it all right

– Users need data so they can get any required data element across any operational system and Data Mart and they can do what they want/can with it

• Who Will Watch The Watchers ThemselvesLets wait and see what mistakes everyone else makes and then we’ll be ready to dip our toes in the waters

– By the time the solution is eventually rolled out, the business is looking up at the competition



BI Architecture> So Which “Camp” Are You In????• There is no right way to

architect a BI solution

• You may want to take your cue from basic Engineering 101…

‘Form’ follows ‘Function’







Moving The Data > A History of Problems and Failure

“Data Integration was a secondary consideration to us. We didn’taccurately estimate the time it would take to integrate our data until it was too late”

(CRM Project Manager at a major International Bank)

e-Commerce, CRM, Business Intelligence, Data Warehouses - these initiatives are not capable of realizing anticipated benefits if clean, useful and relevant data is not readily available

All too often Data Migration projects are put ‘On Hold’ - even after considerable effort and resource has been invested

Realistic planning and resourcing combined with knowledge of existing data and management commitment are the keys to a successful

migration



Moving The Data > Value of Increased Data Refresh Frequency

Greater benefits

are realize

d

through personalizatio

n of delivery

Ben

efits

Mon

th

Timeliness

Wee

k

Rea

l-Ti

me

Hou

r

Day



Moving The Data > Criteria For Success• Sponsorship and ‘buy-in’ from senior management

A well developed business case aligned with the Business and IT Strategy is essentialAn understanding of all aspects of the migration is key to developing the right business caseExecutive commitment is key when significant key resources will be needed to be taken away from their ‘day job’, potentially for extended periods, in order to support a successful migration

• Use of a proven methodology with strong program and risk managementMigration from multiple Legacy systems to a new platform (or even an existing Strategic platform) can take months/years and requires dedicated resources

• Use appropriate tools to reduce the risk and timescales of a migration • Clear understanding of the legacy source systems and accuracy of current data• Experience and skill in data migration techniques• Detailed planning and preparation







Data and the Data Model> Organizing the Data – Business Considerations• Consistent company-wide (i.e. cross business line) hierarchies need to be

established by the business community;Customer (Unique Customer Identifier) ProductOrganization

• Establish standard and agreed to grouping approach;B2C: Householding definitionB2B: Parent /child relationships



Data and the Data Model> Information Usage Within Large Organizations

Marketing

Product Management

SalesFinance

Executives

Credit, Network,Compliance, Strategic Op’ns

Daily Operations

Det

ail

Det

ail

CurrencyCurrency



Data and the Data Model> It All Begins With An Extensible Logical Data Model• Data model ultimately depends upon the business problem to be addressed

Cardinal Rule – ‘Form’ follows ‘Function’

• One or two entities generally account for the majority of required dataRetail POS, Inventory MovementTransportation Shipment Detail, WaybillsCommunications CDRBanking Account TransactionsInsurance Claims



Data and the Data Model> Criteria For Success• Data needs to be viewed as a process moving through information creation to

value creation• For BI to be truly effective, it should be in alignment with the organizations overall

Data Management strategy • Data is not relevant unless you know what it means, where it is and how to find it• For BI purposes, content needs to be clearly defined by business users and

appropriately structured in the manner to support business decisioning• Business metadata must be available and accurate to ensure that end-users have

confidence in the meaning and quality of the data• Trust in the data is inherent

Protect data integrity by preserving how the data ties together and relates, and guarantee the degree to which replicated stored data values are equivalentMaintenance of consistency between multiple data sources and the data model

Many enterprise data management efforts fail to convert data into information







Why Should You Leverage Information?

“The secret of business is to knowsomething that nobody else knows.”

Aristotle Onassis (1906-1975)



•Vendor Management

•Order Tracking & Analysis

•Warranty Tracking

Vendor

•ProcurementManagement

•DC Performance

Scorecard•Supply Chain Effectiveness

Operations

• Merchandising Management

•Branch Management•Touchpoint /

Channel Effectiveness

Sales Channel; Store -Branch/ CC/ On-

line / Field

•Campaign Management

•Loyalty Analysis

•Assortment Planning•Product

Development•Pricing Analysis

Marketing

•Financial Management•Employee

Management•Risk

Management•Compliance

Corporate

Shared Data

Enterprise Performance Management

BI Platform > Information Applications Span The Value Chain



BI Platform > Value of Robust Information Analysis Methods

DataData

KnowledgeKnowledge

• Iterative Analyses• Event Triggers• KPI’s

Insight/Insight/ForesightForesight

• Predictions / Classifications

• Simulation• Discovering hidden

relationships

Data Mining Data Mining and and

VisualizationVisualization

InfoInfo

• Reports• Basic Counts & Amounts• Pivot tables

Valu

e of

Dat

aVa

lue

of D

ata

Valu

e of

Dat

a

ACTIONACTION

PrePre--defined defined Reports Reports

(e.g. most (e.g. most operational operational systems)systems)

Parameter Parameter Driven Driven

AnalysisAnalysis(Multi(Multi--

dimensional dimensional Analysis)Analysis)

Process / Process / Function Function Specific Specific

PackagesPackages

Ad hoc / Ad hoc / Iterative Iterative

Drill Down Drill Down inquiryinquiry

Investment in Business IntelligenceInvestment in Business IntelligenceInvestment in Business Intelligence



BI Platform > Common Data Mining Applications

• Customer Valuation (Profitability Simulation)

• Customer Retention/Vulnerability

• Cross-Selling

• Target Marketing & Segmentation

• Product Affinity Analysis

• Customer Acquisition Lifecycle

• Price Optimization (Elasticity)

• Credit Scoring (introduced by Fair Isaacs approx. 1950)

• Fraud Detection/Compliance

• Risk Management

• Market Demand Forecasting

• Process Optimization

• Assortment Planning

“Modeling is always better than chance, and all models are essentially the same from a predicted response perspective.

The differences lie more in availability, comfort, cost and time.”- Fair Isaacs Statistician



BI Platform > Criteria for Success• Executive level sponsorship• Focused and well articulated business problem• Assess quality of supporting data

CardinalityMissing fields

• Business sensitivity in interpreting data• Present and use results in meaningful ways

Data visualizationEnhance original data set

• Integrated DW/DM StrategyProcess, People, Tools, Data







Organization & Governance> Criteria for Success• Clearly define support infrastructure including end-user help desk

• Develop specific processes to define, gather and update business requirements

• Create a user-driven data stewardship process

• Drive data quality initiatives back into the operational systems environment

• Understand and embrace the function and role of Information Providers

• Conduct formal and informal skills assessments of both IT staff (with respect to BI tools and methods) and business users (with respect to their ability to leverage the tools at their disposal)







Project Management> Key Issues

Less than 20% achieve success

Some 20% fail to realize the original investment

case returnsOver 60% of projects fail to achieve lasting change

•Duplicate efforts•Conflicting efforts•Programs that never end•Initiative overload•Failure to effectively manage people, process and technology

• Organizational/cultural rejection

• Process rejection• Technology

incompatibility• Scope creep/reductions• Loss of

sponsor/commitment• Cost overrun• Timetable creep• Unacceptable impact on

current business operations

•Too many projects, reports, plans •Too much confusion, fire-fighting, talk• Not enough action, focus, measurable results ...

People Process

Technology

The majority of projects fail to achieve lasting business change.



Project Management> Criteria for Success• Scope of the project and business objectives have to be well defined and documented,

business goals have to be measurable and clearly defined, as well as the identification of the critical success factors to achieve the objectives need to be established.

• Team members have to be fully aware of the project’s objectives, goals and responsibilities (their own responsibilities as well as other team member responsibilities)

• Prioritize change management decisions based on established criteria and decision making process to insure that only the right initiatives are being worked on.

• Continual high level risk identification and mitigation. This can reduce overall costs by 5%.

• QA review of strategic deliverables increases the probability of alignment to strategy by 30% and improves the probability of success of meeting schedule and budget estimates by 20%. These are attainable if the QA is from experienced (usually independent – i.e. internal audit) sources and executives follow through with major recommendations.

Moving Forward



BI Solutions Need To Consider People, Process and Technology factors

• Roles & Responsibilities

• Training and Education

• Change Management

People

• Guiding Principles

• End-user Requirements Management

• Governance & Stewardship

• Service Level Agreement’s (SLAs)

Process

• BI Architecture

• Analysis Driven Data Model

• Metadata

• End-User Tools

• Infrastructure

• Maintenance and Performance Monitoring

• Security

Technology



EnterpriseEnterpriseBIBI

ArchitectureArchitecture

OperationalReporting

Functional Reporting

LOBReporting

C-SuiteReporting

InformationBus

OperationalData Store

(ODS)

Metadata

Modeling

Ad-hocQuery

OLAPAnalysis

Spread-sheet

Exec Dashboard

Web

Reporting

Alerts

A p p s

Portal/Desktop/Pervasive Computing

DecisionSupport

• Stage • Transform• Cleanse

• Extract

• Load

Transformation Layer

Legacy ERP BusinessPartners

UnstructuredContent Web

Data Warehouse

• Centralized

• Complete • Controlled

Delivery ApproachDelivery Approach

Business Solution ProposalBusiness Solution ProposalBusiness Situation AssessmentBusiness Situation Assessment

Data Sourcing & StrategyData Sourcing & Strategy

High LevelHigh LevelSource DataSource Data

AnalysisAnalysis

High LevelHigh LevelData QualityData Quality

IssuesIssues

ExternalExternalDataData

SourcesSources

Business Needs AssessmentBusiness Needs Assessment

Business Business Drivers & Drivers & ObjectivesObjectivesValidation Validation

Gap Gap AssessmentAssessment

Cause & Cause & EffectEffect

ModelingModeling

ExecutiveExecutiveDesignDesign

WorkshopWorkshop

IdentifyIdentifySolutionSolutionNeedsNeeds

Decision Support DefinitionDecision Support Definition

FunctionalFunctionalRequirementsRequirements

Measure Measure DefinitionsDefinitions

AnalyticalAnalytical& Reporting& Reporting

NeedsNeeds

Data DefinitionData Definition

High LevelHigh LevelData ModelData Model

Granularity,Granularity,Currency &Currency &

RetentionRetention

High LevelHigh LevelVolumetricsVolumetrics

Project StartupProject Startup

Project Project CharterCharter

Project Project PlanPlan

Project Project KickKick--OffOff

Inte

rativ

eIn

tera

tiveR

ollo

uts

Rollo

uts

SolutionSolutionDefinitionDefinition

SolutionSolutionDesign &Design &

DevelopmentDevelopment

TechnologyTechnologyImplementImplement--

ationation

RUPRUP

Project Mgmt.Project Mgmt.

Roll

Roll--

Out P

lanOu

t Plan

PhasedPhasedRollRoll--OutOutVisionVision

Project Project PlanPlan

Phase 1Phase 1

ProjectProjectScopeScope

Phase 1Phase 1

Visual PrototypeVisual Prototype

Develop Develop Functional Functional

OutlineOutline

DevelopDevelopVisual Visual

RepresentationRepresentation

ConductConductIterativeIterativeReviewReview

Value PropositionValue Proposition

Identify KeyIdentify KeyBus Issues Bus Issues

& Drivers& Drivers

Validate,Validate,PrioritizePrioritize

NeedsNeeds

CreateCreateValueValuePropProp

Technology DefinitionTechnology Definition

DefineDefineTech Tech ReqsReqs

TechTechSizing &Sizing &ScopingScoping

Tech Arch.Tech Arch.

Infrastructure DefinitionInfrastructure Definition

BI Vision & StrategyBI Vision & Strategy

DataManagement

DataManagement

ERPIntegration

ERPIntegration

UnstructuredData

UnstructuredData

DigitalContent

DigitalContent

EcosystemIntegration

EcosystemIntegration

EnterprisePortal

EnterprisePortal

BusinessBusinessIntelligenceIntelligence

StrategyStrategy

Manages

SupportsEnabling TechnologiesRepository Technology

Transactional Level Data

Business Horizons

Technical Horizons

Object

Decom

position

Data Architect Management

INTERNETEDI

Exchange

DBMS

DistributedServer

INTERNET

Mutli-mediaServer

DBMS

DataWarehouseMainframe

/ Server

Systems

SupportsEnabling Technologies

Database and File Manager

INTRANET

Business Horizons

Enabling TechnologiesPresentation Management

CorporateView

Business UnitView

ExternalView

ExternalView

BUSINESS

INTERFACE

PARTNER

SupportsMetadata

Management System

Business Information Discipline

Information Asset Discipline

System / Network

Discipline

GovernanceGovernance

Success Requires Integration & Alignment Across All Dimensions



Lessons Learned

• Ensure that processes and organization design are emphasized in delivering the new solution to the organization.

• Continuous user involvement, particularly in the analysis and modeling phases is essential to your success.

• Active IT involvement. All dialog and interaction with IT resources funneled through project management can cause bottlenecks in the process.

• Some software providers install their tools very well but do not necessarily have a strong integration background specifically in gathering requirements and defining specifications.

• Micro-manage where appropriate. Tool vendors may set unrealistic target dates therefore it is essential to monitor their progress closely to raise warning flags early in the process.



Key Near-Term Issues In The BI Marketplace

• PrivacyThe Personal Information Protection and Electronic Documents Act (PIPEDA) addresses the collection, storage and use of personal information by organizations in the private sector…businesses must inform consumers of who is collecting the information, why the information is being gathered, and for what purposes it will be used.In January 2004, PIPEDA will apply to federally and provincially regulated private-sector organizations, such as insurance companies and retail stores.

– Dependencies – Up front and specific privacy governance, Consumer request logging and registration

• Real-Time Data WarehousingProducts are emerging that claim to broker the benefits of this long promised notion.

– Dependencies – IT & BI Architecture, Data Integration, Data Quality



19771977"There is no reason anyone would want a computer in their "There is no reason anyone would want a computer in their

home."home."-- Ken Olson, President, Former Chairman and Founder of Digital Ken Olson, President, Former Chairman and Founder of Digital

Equipment Corp.Equipment Corp.19811981"640K ought to be enough for anybody.""640K ought to be enough for anybody."

-- Bill Gates, Bill Gates, DemiDemi--God of Microsoft CorporationGod of Microsoft Corporation20032003"We know our business…we don’t need to waste time or money "We know our business…we don’t need to waste time or money

with this Business Intelligence Stuff!"with this Business Intelligence Stuff!"-- A Former C.E.O.!?!?A Former C.E.O.!?!?

19431943"I think there is a world market for maybe five computers.""I think there is a world market for maybe five computers."

-- Thomas Watson (1874Thomas Watson (1874--1956), Former Chairman of IBM1956), Former Chairman of IBM

Even the Visionaries Can Be Wrong

“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

- Sir Winston Churchill

Thank You! Questions, Comments, DiscussionCal RosenInformation Management & BI Solutions Practice Leader – [email protected]