Building the Business Case for
Business Intelligence and Analytics
DiscussionSeptember 11, 2009
2Confidential and Proprietary
Agenda
• Changing the business
• Finding business value– Example: Understanding Customer Behavior
• Beyond simple financial metrics – (ROI, IRR, NPV)
– Credible value added methods
• Building the business case– Relevant
– Authoritative
– The “Sticky“ or defensible position
• Ten essential elements you will need
• Sample method (example)
3Confidential and Proprietary
Changing the Business
• People, not Technology
• Process, not Project
• Value, not Cost
• Insight, not Data (Data ≠ Information)
• “Yes you can…”
4Confidential and Proprietary
Changing the BusinessUnderstanding key concepts
People - Insight and Visibility Throughout an Organization
Customer support repCustomer support rep
“I need better access to information to make better decisions on cross-sell and up-sell opportunities.”
“I need to have the right demographic information so I can better target my opportunity prospecting.”
Sales repSales rep
Chief executive officer (CEO)Chief executive officer (CEO)
““I need to know that the people in my I need to know that the people in my organization have the right goals in place organization have the right goals in place to understand to understand and execute on the execute on the strategic initiatives of the company.strategic initiatives of the company.””
VP, operationsVP, operations
“I need better visibility into my cost of operations so I can target specific cost reduction opportunities that won’t have a negative impact.”
Chief financial officer (CFO)Chief financial officer (CFO)
““I need to improve our analytics I need to improve our analytics capabilities so we so we can understand our current business performance can understand our current business performance and do a better job of planning for the future.and do a better job of planning for the future.””
Source: “Creating the Office of Strategy Management” by Robert Kaplan and David P. Norton, Harvard Business School, April 2005
VP, sales and marketingVP, sales and marketing
“I need better visibility into our pipeline performance so I can focus on deals that help me grow business with my most profitable customers.”
Gross Margin?Profit Margin (EBIT, EBITDA, NOPAT)?Operating Expenses?Asset Turnover?Working Capital Management?GMROI?Actual Employee Turnover Costs?
Debt to Asset Ratios?Debt to Capitalization?Interest Coverage?Burden Coverage?Cash Flow? Cash Flow / Share?Return on Total Net Worth?Return on Common Equity?
Earnings Per Share?Share Prices Appreciation?Dividends Per Share?Price to Earning Ratio?Market Book Value?Value Drivers?
Our Market Share?Effectiveness of Campaigns?Selling Together?Not Selling Well?Selling in What Market?
My Customers?Their Competition?My Next Sales Opportunity?What is Selling Now?
6Confidential and Proprietary
People – What Is Needed
• Address the human-side systematically
• Obtain top level support
• Involve every layer
• Clearly communicate the business case
• Create ownership, install change agents
• Clearly and continually communicate the message
• Assess the cultural impacts and issues
• Prepare for the unexpected
• Define WIIFM (What's in it for me?) for each role or individual
7Confidential and Proprietary
33%
23%
77%
40%
36%
65%
8%
23%
Have significant decision-support/analytical
capabilities
Value Analytical insights to a very large extent
Have above average analytical capability within
industry
Use analytics across their entire organization
Source: Competing on Analytics, Thomas Davenport
Insight – The Competitive Edge
Low Performers
High Performers
High performing companies are more likely to use analytic information strategically
8Confidential and Proprietary
Think Process, Not Projects
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Taking Action – Reducing Opportunity Costs
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Value of Information
Information Management Life Cycle
11Confidential and Proprietary
Finding business valueQuantify and translate findings
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Finding Business Value
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Increasing Burden of Proof
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Difficulty in Predicting Impact
Where the significant opportunities are found
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What to Measure?
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§ Reduced time to market
§ Reduced time to process orders, returns and change orders
§ Reduced time to respond to customer inquiries
§ Improved order accuracy
§ Improved accuracy of logistics information to enable faster and more specific order changes (lot, palette, store location, etc.)
Value Service x Quality
Time x Cost=
§ Reduced personnel time lost to manual processing and customer inquiries.
§ Reduced costs of transportation through improved use of capacity and routing
§ Reduction in inventory held and while achieving target customer service levels
§ Improved use of warehouse space through improved collaboration with customers
§ Increased timeliness and visibility into critical information
§ Improved accuracy on order changes and returns
§ Consistency of service
Delivering Business Value
The magic formula:Productivity = Value Created / Resources Consumed
§ Focus has been on denominatorProductivity = Value / (Resources – 15% Head Count) - Diminishing returns - Exclusive reliance on resource reduction is dangerous
§ Numerator is where significant opportunities existProductivity = Value Innovation / Resources- Difficult to quantify- Requires deep understanding of the business- Not subject to the hard constraints
Productivity
Align with business drivers
Findings - Sample Engagement
*Based on 2080 annual hours of available work. FTE Hourly Rate $50.00
Essential non-value added costs discovered during fieldwork …
Department
Knowledge
Workers
% Time
Gathering Annual Hrs Gathering *
Information Management 2.50 28% 1,456
Inventory Control 10.00 40% 8,320
Finance 10.00 90% 18,720
Purchasing 30.00 40% 24,960
Sales/Operations 244.00 20% 101,504
154,960
Translates to approximately $7,748,000 of spend annually on activity that could be redirected to creating
higher value-added work product…
0 20,000 40,000 60,000 80,000 100,000 120,000
Information Management
Inventory Control
Finance
Purchasing
Sales/Operations
Annual Hrs Used Gathering Data
for Analysis/Action
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Finding business valueUsing customer as an example
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• Fortune 500 companies lose 50% of customers in 5 years.
• It costs 7-10 times as much to acquire a new customer as it does to retain an existing customer.
• Long-term customers buy more, take less of a company’s time, and are less sensitive to price.
• A 5% increase in retention can increase profits 60-100%.
• Up to 50% of existing customer relationships are not profitable.
• The average company communicates 4 times per year with its customers and 6 times per year with its prospects
Understanding Customer Behavior
Sources:
1:1 marketing, inc., Yankee Research, Fred Reichheld, AMR Research study. NCDM, Direct Marketing Association (DMA)
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Know the value of your Customers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Rev
enue
Per
Acc
oun
tB
id-T
o-W
in R
atio
Avg
Opp
ortu
nity
Dea
l Siz
e
Lead
Qu
alif
icat
ion
Rat
e
Acq
uisi
tio
n C
osts
(%
of
reve
nue)
Mar
ket
Shar
e
Best In Class
Average
Laggards
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Results - What this really means…
Source: Sales Intelligence, Aberdeen Group, January 2009
How organizations leverage sales intelligence to affect overall sales productivity (300 organizations, Oct-2008)
Classic business process improvement opportunity red flags:
§ Manual information processing steps
§ Information on paper (or in text format, e.g., e-mail)
§ Information stall points/bottlenecks
- Currency (Late Data) Reports or Files arrive late
§ Information update/notifications lags
- If you only knew then what you know now!
- Inaccurate Data - Facts are wrong or don't balance
§ Application focus – multiple hand-offs, duplicate processing
- Transformation Required Information in wrong media or format
- Incomplete Data - Not all data needed is there
§ Departmental silos (versus process focus)
- Not Shared - Someone else has but does not share
- Outside - Data resides outside department (or company)
Opportunities
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More than Financial MetricsBeyond Simple ROI
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Beyond Simple Financial Metrics
• Traditional financial metrics
– Return on Investment
– Internal Rate of Return
– Net Present Value
– Payback Period
• Value, yes but…
• Beyond simple ROI
– Business Value Index
– Total Economic Impact
– VAL-IT
– Applied Economics
“One of the key contributors to poor investment performance is an unbalanced approach taken by executives at the project approval stage. Too often, the overriding emphasis is on quick payback or demands for the return on investment (ROI) to be demonstrated in financial terms.”
Gartner, “Total Value of Opportunity — The Real Measure for BI”
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Issues using simple financial metrics
• Many to choose from– Wide variety of measures in use (ROI, NPV, IRR, EVA, payback period)– Multiple interpretations, results in using different measures in the organization
• Imply a false precision that doesn’t exist– Creates a false sense of credibility; estimates based on assumptions – Accuracy is only as good as the underlying assumptions
• Often fail to account for intangible benefits– Investment provides both direct (tangible) and intangible benefits– Intangible benefits, (customer satisfaction) difficult to measure, often ignored completely
• Ignore Future opportunities (capability)– Investments can produce both immediate benefits and provide opportunities for future benefit Future opportunities to layer HR, supply chain, or provision infrastructure for a BI system extensions for additional systems
• Risk– Significantly underestimate risks or the fail to account for risk at all– Business case key assumption is the project will be delivered on budget – Risk estimates tend to be subjective and not consistently applied
28Confidential and Proprietary
Value, yes but… how about a little balance?
• Measure business value using both
– tangible and
– intangible benefits
• Measure efficiency impact to the organization
– How well a project complies or “fits”
– Are we gaining or improving new capability in the business?
• Measure financial attractiveness (Financial criteria)
– Clearly distinguish business value from financial value.
– Uses at least three financial metrics in determining financial attractiveness (NPV, IRR, and payback period)
• Measure and Adjust Findings for Risk
– Estimates translated into a range of potential outcomes
– Risk-adjusted costs and benefits used to communicate a risk-adjusted outcome measure (e.g. ROI)
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Beyond Simple ROI
Value Methodologies Compared
Source: Forrester Research
• Business Value Index
• Total Economic Impact
• VAL-IT
• Applied Information Economics
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Building the business caseTen essential elements…
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Ten essential elements
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Demonstrate the investment has value
§ Identify and quantify tangible and intangible benefits
§ Address the five essential elements every business leader understands and manages to on a daily basis:1) Cash Flow
2) Margin (profitability)
3) Velocity (cycle time compression)
4) Growth
5) Customer (responsiveness, intimacy, and alignment)
§ Address the investment decision and burden-of-proof1) Reduce Hard Costs
2) Improve Capacity (Knowledge Workers, Operations)
3) Lift Existing Revenue
4) Create New Revenue
5) Reduce Portfolio Risk
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Identify all necessary components and services
§ Product Breakdown Structure § Software Components§ Production Support Services § Customization Projects§ Personnel (Professional Services)
§ Organization Breakdown Structure
§ Work Breakdown Structure§ High Level Value Add based activities
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Estimate immediate and extended program costs
§ Identify immediate and extended costs of building and operating the new environment
§ Fixed, Variable
§ One-Time and Recurring
§ On-going operational expense (One-Time vs. Recurring Operational Costs)
§ Include supporting schedules§ Product Licensing and Support Services
§ Software Development and Customization
§ Personnel
§ Pass-Through or Third-Party
§ Travel (Ancillary)
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Use a dynamic cost benefit analysis model
Source: Intel Corporation
Flexible and adaptive to changes in data driven assumptions and weighted criteria.
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Forecast when the business realizes the benefits
730,470
2,605,757 2,634,261
2,276,403
1,406,871
2,177,759
0
250,000
500,000
750,000
1,000,000
1,250,000
1,500,000
1,750,000
2,000,000
2,250,000
2,500,000
2,750,000
3,000,000
2000
2001
2002
2003
2004
2005
Non-Discretionary Totals
Non-Cash Expenses
Totals
Discretionary Totals
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Clearly define the approach and scope
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Impact to the organization’s capability to deliver
Do not try to build a system whose complexity
exceeds the organization's capabilities
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Describe how the program will be properly managed
Program Structure and GovernanceProgram Structure and Governance activities involve
the design and execution of how the program will be
directed, coordinated, and monitored. Key elements
include governance and program office structure,
oversight meetings and agenda definition, and role
and responsibility development.
Scope ControlScope must be closely linked with Work and
Resource Planning as both will be affected
by any changes to work efforts. Scope
control activities include: 1) Periodic Project
Team Meetings & Program-wide reviews, 2)
Monthly Steering Committee Meetings for
escalation of project issues, 3) Deliverables
based on orientation, and 4) Formal
Business Case required for Scope Changes.
Risk ManagementIdentifying and responding to potential events that
threaten program success. Key activities include:
1) Risk Identification – identify and categorize risks,
2) Risk Estimation – estimate the chance and
consequences of the risks, 3) Risk Planning – Plan
methods to control and mitigate risks, and
4) Risk Management – Control risk through
protection and monitor actual risks, contingency
execution, and refine plans as required.
Cost ManagementCost Management ensures that the program is
completed within the approved budget through
cost estimating and cost control processes.
There is also a tight linkage with planning
processes given changes in schedule and
resources will affect overall program budget.
Work Planning and SchedulingWork planning and scheduling activities involve
the development, communication, and
management of structured and integrated
program work plans.
Quality ManagementQuality Management ensures that
standards are developed and followed
that will be sued to evaluate and monitor
project performance.
Issue ManagementIssue Management ensures that issues are
identified, evaluated, resolved and
documented. Escalation mechanisms are
implemented in order to facilitate timely
decision making.
40Confidential and Proprietary
Projects are undertaken in the optimum sequence
41Confidential and Proprietary
Publish project charter to stakeholders
Table of contents
1. Executive summary
Background
2. Current business
Description/economics
3. Proposed project
Description/strategic fit
4. Options evaluation
5. Timescale and investment
analysis
6. Standard management practices
7. Appendices
Supporting material
• Analysis of benefits• Analysis of costs• Financial spreadsheet• Metrics – ROI, NPV, etc.
• Risk analysis and mitigation• Alignment• Project change mgmt• Quality assurance• Project finance• Reporting• Governance
42Confidential and Proprietary
Building Case DevelopmentSample Method
43Confidential and Proprietary
Program Method
44Confidential and Proprietary
Business Case Development
45Confidential and Proprietary
Business Case Development
Sa les Operations
RevenueAnalys is
Sales
ForecastM odel
Canc el lation
Analy sis
Dis connectAnaly sis
OperationAna ly sis
O rder In terv alAnaly sis
Head Count
Ana ly sis
Bi l led RevenueAnaly sis
Pene trationAnalys is
Bi ll i ngD is pu tes
Cred itsAna ly sis
Identi fy PotentialCus tom ers
As semb le Customer
Product Ma tri x
Sa les Orders &Custom er s Forecast
Products &
Equ ipment Fo rec as t
Sa lesPerfo rm ance /
Productivi ty
N etworkTopology
Analys is
Profi tab i li ty
Ana ly sis
Order EntryReso lution
Con test
Ana ly sis
Prom o & Specia lOffers Ana ly sis
Identi fy Sales RepCoun ts
N ew Order s Value
Forec as t
Booked & Bi lledR ev enue Forecast
Sa les Stati sti csForecas t
Bui lding Lev el
Pene trationAna lys is
M ark et Lev el
Bu ild ingPenetra tion
MobilePoint MobleGramH Q Server (NT)
BMS E-Mail S erver(C C Mail)
Sales Administrat ion(WI ndow s 95/ NT)
Market ing(WIndows 95/ NT)
Color ist Satis factionAdminis tration
(WI ndow s 95/ NT)
Salon D atabase Serv er(HP U nix , Oracle DB)
D ivision H eadquarters:
* Sales Adminis trators - 4 Developm ent, 12 Production
Field Sa les Force (Continental U .S.):- 6 Dis tric t Managers
- 66 Field Consultants
Et hernet
Field Cons ult ant(MobilePoint Devic e)
BMS I ntranet Serv er(FIrew al l)
Dis tr ict Field Sales Management(WI ndow s 95/ NT)
MobilePointA rchive
TelemarketingPac kage
SalonReporting
# 1 # 2
# 4
# 5 # 6 # 7
# 8 # 9 # 10
Corporat e S ales ManagementLapt op (W indow s 95)
# 3
Assessment Activ it ies Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7
1.0 Project Initiation
2.0 Document Initial Findings & Recommendations
2.1 Business Architecture Review
2.2 Information Analysis Architecture Review
2.3 Technical Architecture Review
2.4 Initital Data Stewardship Program
2.5 Organizational & Project Management Review
3.0 Develop Implementation Plan
4.0 Develop Final Report & Presentation
5.0 Conduct Presentation
M4
M2
M1
M3
M5
Mark et Grow th
Resources
(MGR)
Cus tomer
EducationEducat ion Materials
Sys tem Cont rol
ProgramI ndividual
Order
Management
Business Party Informat ion
Sys tem
Management
Strategic Salon
Sys tem
Cus tomer (D irect)
Product
Sales
Promotion Informat ion
MobilePoint
Sales
Adminis tration
Busines s Party, Geography, Call, Turnover
Order, Campaign Information, E vent
Busines s Party, Geography, Call,
Turnov er Order, Campaign, Event
Mark eti ng
Salon Informat ion
Salon Informat ion
Sales Order (Direc t)
P romotion
Management
Sales Strat egy (Campai gn), Promot ion
Ret urn Authoriz ation (D irect)
Advert ising (Direct)
Inc entive Point s
Employ ee
I ndividual
Sales
Operations
Revenue
Analysis
Business
Analyst
Order
Entry
Business
Analyst
Sales
Performance
&
Productivity
Business
Analyst
Sales
Forecast
Modeling
Business
Analyst
Daily Sales
Report ing
Business
Coordinator
Assessment Activ it ies Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7
1.0 Project Initiation
2.0 Document Initial Findings & Recommendations
2.1 Business Architecture Review
2.2 Information Analysis Architecture Review
2.3 Technical Architecture Review
2.4 Initital Data Stewardship Program
2.5 Organizational & Project Management Review
3.0 Develop Implementation Plan
4.0 Develop Final Report & Presentation
5.0 Conduct Presentation
M4
M2
M1
M3
M5
Assessment Act iv ities Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7
1.0 Project Initiation
2.0 Document Initial Findings & Recommendations
2.1 Business Architecture Review
2.2 Information Analysis Architecture Review
2.3 Technical Architecture Review
2.4 Initital Data Stewardship Program
2.5 Organizational & Project Management Review
3.0 Develop Implementation Plan
4.0 Develop Final Report & Presentation
5.0 Conduct Presentation
M4
M2
M1
M3
M5
IBM M ainfram e VAX Mainf rameIBM Risc IBM AS400 Micro VaxLAN or PC
Da tabases
MDPSDictate dReports
(HL7 Flat F iles)from Aan
Propriet ary DB
Discharge
Instruct ions(RDB)
CFPCar diology
Reports
LAN Prop rietaryDB
SunquestLabs,
B lood Bank,Anatomical
Pathology
(M umps)
DMI
Rad io lo gy
(MUMPS)
SMSOrd er
Entr y
( VSAM )
F uture SMSPat ient Data
(Med sAdministra tion,
I & O's
etc)
ClinicompBed side
Do cumentatio n
(Pr oprietar y LANSQL DB)
Clinical Data Sources
Coded and T ext data
CLASS
Materials
MgtAS400
Cod ed and T ext
ORIS/ORPT
Ope rating Room(Mainfr ame
DB2)
Coded an d Textdata
Transplant
Research
LAN DB( Par adox)
CCLT ranspla nt
MedicalPr oprietar y LAN
DB
OCISBMT Data
( MUMPS)
GCRC
Research
MicroVax(RDB)
Clinical Research Systems( Receive HL7 ADT & Lab Data)
Coded an d Text da ta
ADMITPa tie nt Visit
(BDAM )
IDXOutp atient
Visit
Boston Vax(Mump s)
Coded and Text Data
PatientDemographic/Visit
META
MedicalRcds
DX & Pr ocedure(VSAM)
Patient
AccountingFinan cial
Data(BDAM)
Financial, DX, &Procedure
Coded (future Scanned
Data)
OHACom parativeOhio Hospital
Data( DB2)
Code d data
Pa tie ntSa tisfa ctio n
PC DB
Coded and T ext
Data
Various Qu alit yImp rovemen tDataba sesL AN DB
Co ded and Text
Data
QI & Comparative Databases
Lifetim eClinical
Record(Mainf rame DB2)
Clinical View of Data
EAD
Master
Patient Index(Mainf rame DB2)
Healthcare TermDictionary
HCC
Contract
M anagementOr acle DBIBM RISC
Financial View of Data
HCCCost
Account ingOra cle DBIBM RISC
Financial DecisionSupport
Outreach
Database( Mainfra me
DB2)
Code d and T ext
da ta
Marketing
DB
( Par adox)( In Chicago)
Code d and T extdat a
ONCOLOG
Tum or RegistryPro prietar yLAN DB
Coded a ndTextd ata
IOUOncology
Clinca l T rials(MIIS)
Coded and T extdata
Various
Speciali zedResearch
Databases
Coded and Te xtdata
Clinical Research Systems(Not Interfaced)
Data may change af ter transfer
Tape LoadProgram
PharmakonInpa tie ntPha rmacyIBM RI SC
Co ded and Textdata
Lant isRadiati on
OncologyLAN DB
Coded an d TextData
Ancillary Systems(Receive HL7 ADT Data)
Radi ol ogyIm age Syste m
LAN DB
(Sybase)
Images
Outpat ientPharmacy
Micro Vax
Co ded and Textdata
Ancillary Systems(Not Interfaced)
Peopl eSoftGener al Ledger
(Or acle DB)
Code d data
ANSOS
ProprietaryLAN DB
Co ded and Textdata
Peoplesof t
HumanResources( Or acle DB)
StaffingData
HL7 HL7 FT P ?HL7 HL7
CIS
(RDB)
CurrentSystem
No Order Ent ryor F uture
ApplicationDa ta
Deci sionSupport
CurrentSystem
QMF
Sa les Operations
R evenueAnalysis
Sa les
ForecastM ode l
C ance lla tion
Ana ly sis
Disc onnec tAna ly sis
O perationAna lys is
Order Inte rva lAna ly sis
Head Coun t
Analys is
Bil led Rev enueAna ly sis
Penetra tionAna ly sis
Bi ll i ngDis pu tes
Credi tsAna lysis
Iden tify Po ten tia lCustomers
Ass em ble Cus tomer
Produc t M atri x
Sa les Orde rs &Customers Fo recas t
Produc ts &
Equipm en t Fo recast
SalesPerfo rmanc e/
Productiv i ty
NetworkTopology
Ana lys is
Pro fi tab il i ty
Analys is
Orde r En tryRes o lu tion
Con tes t
Analys is
Prom o & Spec ia lOffe rs Ana lysis
Iden ti fy Sa les RepC ounts
New O rde rs Va lue
Forecast
Book ed & Bi lledRevenue Fo rec as t
Sales Sta tis tic sForec as t
Bui lding Lev el
Pene trationAnalys is
M ark et Lev el
Bu i ld ingPene tration
46Confidential and Proprietary
Business Case Development (cont’d)
Cu
stom
er
Sat
isfa
ctio
n
Re
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Beh
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or/
Ha
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Mar
ket
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Co
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Gen
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Acc
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t G
en
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E-M
ail
Lis
t G
ene
ratio
n
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
I ncrease Market Share 12 4 5 4 5 5 5 5 1 5 5 2 4 4 4 4
Increase Shareholder Value 20 3 3 3 4 4 4 3 2 4 3 2 3 3 3 3
Increase Brand Image 7 5 1 4 2 2 5 5 1 4 2 4 5 5 5 5
Increase Revenue (and Profit ) 20 3 4 4 5 5 5 5 4 4 5 4 5 5 5 5
Increase Com pet itive Position 9 4 4 4 4 4 4 5 4 5 5 4 4 4 4 4
Increase Associate
E ffectiveness/Satisfaction14 1 4 5 1 1 4 5 4 4 5 4 5 5 5 5
Satsify Customers 18 5 4 4 3 3 3 5 1 5 4 5 5 5 5 5
Business Value Score 100 343 371 394 358 358 421 460 249 439 421 354 439 439 439 439
Availability, Completeness, &
Reliabil ity of Source Data20 2 1 4 4 4 2 2 1 2 3 2 4 4 4 3
Tim e/Ef fort/Cost to Extract , Transform, Integrate, & Load Source 20 1 4 1 5 3 2 4 1 4 5 1 4 4 4 1
CUD Process Definiti ons 10 1 4 1 5 5 1 5 1 5 5 1 3 2 5 1
Completness of Application Data
Models & Functional Specs10 1 5 2 5 5 2 5 2 4 5 2 4 4 5 1
SLA Requirements Achievabl e 10 1 4 1 5 5 2 5 2 4 5 2 4 4 5 1
IT Inf rastructure Preparedness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
PMO & SDLC/SDM Maturity 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
Data Gov. Organizational Readiness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
Feasibi lity Score 100 180 290 230 390 350 190 360 210 340 400 140 360 350 430 140
Business Process
Business Value & IT Readiness
Criteria
Weightin g
Factor
Cu
stom
er
Sat
isfa
ctio
n
Re
ntal
Beh
avi
or/
Ha
bits
Mar
ket
Re
sear
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Ch
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Su
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Mar
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Eff
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s
Cu
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Pro
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atio
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Co
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ene
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ship
Mar
ket
Sha
re (
vs
Co
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titio
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Acc
oun
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rfor
man
ce
Ope
ratio
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mpa
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e.g
.,
Tal
k T
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Mai
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Lis
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Tel
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Lis
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Gen
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Acc
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en
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ail
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ratio
n
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
I ncrease Market Share 12 4 5 4 5 5 5 5 1 5 5 2 4 4 4 4
Increase Shareholder Value 20 3 3 3 4 4 4 3 2 4 3 2 3 3 3 3
Increase Brand Image 7 5 1 4 2 2 5 5 1 4 2 4 5 5 5 5
Increase Revenue (and Profit) 20 3 4 4 5 5 5 5 4 4 5 4 5 5 5 5
Increase Com pet itive Posit ion 9 4 4 4 4 4 4 5 4 5 5 4 4 4 4 4
Increase Associate
E ffectiveness/Satisfact ion14 1 4 5 1 1 4 5 4 4 5 4 5 5 5 5
Satsify Customers 18 5 4 4 3 3 3 5 1 5 4 5 5 5 5 5
Business Value Score 100 343 371 394 358 358 421 460 249 439 421 354 439 439 439 439
Availability, Completeness, &
Reliabil ity of Source Data20 2 1 4 4 4 2 2 1 2 3 2 4 4 4 3
Tim e/Ef fort/Cost to Extract, Transform, Integrate, & Load Source 20 1 4 1 5 3 2 4 1 4 5 1 4 4 4 1
CUD Process Def initions 10 1 4 1 5 5 1 5 1 5 5 1 3 2 5 1
Completness of Applicat ion Data
Models & F unctional Specs10 1 5 2 5 5 2 5 2 4 5 2 4 4 5 1
SLA Requirements Achievable 10 1 4 1 5 5 2 5 2 4 5 2 4 4 5 1
IT Inf rastructure P reparedness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
PMO & SDLC/SDM Maturity 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
Data Gov. Organizat ional Readiness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
Feasibi lity Score 100 180 290 230 390 350 190 360 210 340 400 140 360 350 430 140
Business Process
Business Value & IT Readiness
Criteria
Weighting
Factor
Cold Leads
Product , Prici ng, & Promotio n St ructures
Cancel lation Reports/Data
Dail y Sales Report
Hea
d Co
unt
Ord
er C
an
cels &
Ab
orts
Disc
onne
cts &
Cre
dits
Re
venu
e F
low
An
alysis
Rep
orts
Cu
stome
r Su
rveys
Ho
t Le
ads
Order Entry Backlogs
Order Interval Reports
Build
ing N
etw
ork Ca
pac
ity (Fu
ture)
Wee
kly
Sa
les
Rep
ort
s
Mon
thly
Sa
les
Rep
orts
Bu
ildin
g P
ene
trat
ion
Re
port
s
Da
ily S
ale
s R
epor
ts
M arketing
Sales Operations
Billing
Operations
(Sales to
Revenue
Team )
IT -
Enterpri se
Report ing
Human
Resources
Custom er
Service
Fi nance
Vendor
Leads
(D&B,
ABI)
Engineering
Hot
Leads
Vendor?
Order
Operat ions
Sales
M anagement
Nat ional
(Fi eld)
Sales
summarizes by that Time Period
is summarized by
is summarized by
sum
mariz
es b
y that
Sale
s Geogra
phic
Com
pon
ent
summarizes by that Sales Organization
is summar ized by
is summarized by
summarizes by that Promotion
is sum
mariz
ed b
y
sum
mariz
es b
y that P
roduct
Promo & Sp ecial Of fersKPI Set
Sales Geography
Sales Organizat ion Time Period
Promotion Product
Parent Product Code
Parent Product Name
Produc t Code
Produc t Name
Produc t Type Description
Promotion Code
Promotion Desc ription
Promotion Effec tive Date
Promotion End Date
Bui lding Code
City Name
Market Name
Region Name
Month
Quarter
Year
Field Sales Resource Name
Field Sales Role Desc ription
Managing Field Sales Resource Name
Managing Field Sales Role Description
Subordinate Field Sales Resource Name
Subordinate Field Sales Role Description
Adjus tment Charges
Credit Charges
Estimated Revenue
Finance Char ges
Gross B il led Revenue
MRC Charges
Net B illed Revenue
NRC Charges
Orders Count
Pending Or ders Count
Term Charges
Total Order s Count
Usage Charges
Sa les Operations
RevenueAnalys is
SalesForecast
M odel
Canc el lation
Analy sis
Dis connectAnaly sis
OperationAna ly sis
O rder In terv alAnaly sis
Head CountAna ly sis
Bi l led Revenue
Analy sis
Pene trationAnalys is
Bi ll i ngD is pu tes
Cred itsAna ly sis
Identi fy PotentialCus tom ers
As semb le Customer
Product Ma tri x
Sa les Orders &
Custom er s Forecast
Products &Equ ipment Fo rec as t
Sa lesPerfo rm ance /
Productivi ty
N etworkTopology
Analys is
Profi tab i li tyAna ly sis
Order EntryReso lution
Con testAna ly sis
Prom o & Specia l
Offers Ana ly sis
Identi fy Sales RepCoun ts
N ew Order s Value
Forec as t
Booked & Bi lled
R ev enue Forecast
Sa les Stati sti csForecas t
Bui lding Lev elPene tration
Ana lys is
M ark et Lev el
Bu ild ingPenetra tion
Cu
stom
er
Sat
isfa
ctio
n
Re
ntal
Beh
avi
or/
Ha
bits
Mar
ket
Re
sear
ch
Ch
ann
el P
erfo
rma
nce
Su
b-C
han
nel
Pe
rform
ance
Mar
ketin
g P
rog
ram
Eff
ectiv
nes
s
Cu
stom
er
Pro
filin
g/S
egm
ent
atio
n
Co
st/B
ene
fit R
ela
tion
ship
Mar
ket
Sha
re (
vs
Co
mpe
titio
n)
Acc
oun
t Pe
rfor
man
ce
Ope
ratio
nal I
mpa
ct (
e.g
.,
Tal
k T
ime)
Mai
ling
Lis
t G
ene
rati
on
Tel
em
arke
ting
Lis
t
Gen
era
tion
Acc
oun
t Lis
t G
en
erat
ion
E-M
ail
Lis
t G
ene
ratio
n
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
I ncrease Market Share 12 4 5 4 5 5 5 5 1 5 5 2 4 4 4 4
Increase Shareholder Value 20 3 3 3 4 4 4 3 2 4 3 2 3 3 3 3
Increase Brand Image 7 5 1 4 2 2 5 5 1 4 2 4 5 5 5 5
Increase Revenue (and Profit ) 20 3 4 4 5 5 5 5 4 4 5 4 5 5 5 5
Increase Com pet itive Position 9 4 4 4 4 4 4 5 4 5 5 4 4 4 4 4
Increase Associate
Effectiveness/Satisfaction14 1 4 5 1 1 4 5 4 4 5 4 5 5 5 5
Satsify Customers 18 5 4 4 3 3 3 5 1 5 4 5 5 5 5 5
Business Value Score 100 343 371 394 358 358 421 460 249 439 421 354 439 439 439 439
Availability, Completeness, &
Reliabil ity of Source Data20 2 1 4 4 4 2 2 1 2 3 2 4 4 4 3
Tim e/Ef fort/Cost to Extract , Transform, Integrate, & Load Source 20 1 4 1 5 3 2 4 1 4 5 1 4 4 4 1
CUD Process Definiti ons 10 1 4 1 5 5 1 5 1 5 5 1 3 2 5 1
Completness of Application Data
Models & Functional Specs10 1 5 2 5 5 2 5 2 4 5 2 4 4 5 1
SLA Requirements Achievabl e 10 1 4 1 5 5 2 5 2 4 5 2 4 4 5 1
IT Inf rastructure Preparedness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
PMO & SDLC/SDM Maturity 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
Data Gov. Organizational Readiness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
Feasibi lity Score 100 180 290 230 390 350 190 360 210 340 400 140 360 350 430 140
Business Process
Business Value & IT Readiness
Criteria
Weightin g
Factor
Oracle Customer Mgmt
Modify Customer
Data WarehouseBizTalk
Transform to Oracle
Trasform to Normal
Transform to Normal Message
Transform to ERP
Send to ERP
Post to DW
Post Event
Log Error
Branch ERP
Create Response
Crea te Error Msg
Process Update
Log Handler
: OracleCustMgmt01Not ificat ion
OracleCustResponse: OracleCustMgmt01
: CustomerMgmt01Normal Notif ictaion
CustNormalResponse: CustomerMgmt01
: CustomerMgmt01Normal Notific taion
: ERPCustMgmt01ERP Not ificat ion
: MessageSta tusCustModError
ERPCustResponse : ERPCustMgmt01
: ERPCustMgmt01ERP Notif icat ion
: MessageStatusCustModEvent
: MessageStatusCustModError
[more ]
[Er ror]
[Success ]
47Confidential and Proprietary
Rela ti ve Ti meline (Weeks)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 1 8 1 9 2 0 2 1 2 2 2 3 24 25 26 2 7 28 29 3 0 31 32
Ini tia ti ve/ Phase
1. Impl ement Tel emarketi ng Package Soluti on
1.0 In iti ati on
1.1 De velop Strategi c Salon Sy st em Archit ecture
1.2 Con duct Telemarket ing Pa ck age Pil ot
1.3 De velop Telemarket ing Pa ck age Proto type
1.4 Con duct Telemarket ing Nat ion al Laun ch
2. Impl ement Tel emarketi ng Extension Enviro nment
2.0 In iti ati on
2.1 De velop Telemarket ing Ext Arch ite cture
2.2 Con duct Telemarket ing Ext Nati onal Laun ch
3. Impl ement Data Di stri bution
3.0 In iti ati on
3.1 Impl emen t M obi lePoin t HQ Server (In House)
3.2 De velop In terim Rep ort in g
3.3 De velop Common API App ro ach3.4 De velop Mob ile Poi nt Sy nchroni zati on Trans
3.5 De velop Telemarket ing Sy nchroni zatio n Trans
3.6 Con duct Dat a Synch ron izat ion Syst em Int Test
3.7 Con duct Dat a Synch ron izat ion Nat iona l Laun ch
4. Impl ement Decisio n Support Enviro nment4.0 In iti ati on
4.1 De velop Salon Repo rt ing Dat abase En vironment
4.2 Con duct Basel ine Sal on Reporti ng Data Qual it y Assess
4.3 De velop Test B ase lin e Salon Repo rt s
4.4 Con duct Prod uct ion Baseli ne Salo n Rep ortin g Laun ch
Process Risk Matrix
0
250
500
0 250 500
Feasibility
Bu
sin
ess V
alu
e
1 - Customer Satisfact ion
2 - Rental Behavior/Habit s3 - Market Reasearch
4 - Channel Performance
5 - Sub-Channel Performance6 - Marketing Program Ef fect iveness
7 - Customer Profiling/Segmentation8 - Cost/Benefit Relationship
9 - Market Share (vs Compet ition)10 - Account Performance
11 - Operat ional Impact
12 - Mailing List Generation13 - Telemarketing List Generation
14 - Account List Generation15 - E-Mail List Generation
1
23
45
6
7
8
9
10
11
1213
1415
Cu
sto
mer
Sa
tisfa
ctio
n
Re
nta
l Be
hav
ior/
Ha
bits
Mar
ket R
ese
arc
h
Ch
anne
l Pe
rfor
man
ce
Sub
-Cha
nne
l
Per
form
anc
e
Mar
ketin
g P
rog
ram
Effe
ctiv
ness
Cu
sto
mer
Pro
filin
g/S
egm
enta
tion
Co
st/B
enef
it R
ela
tions
hip
Mar
ket S
har
e (v
s
Co
mp
etit
ion)
Acc
ou
nt P
erfo
rma
nce
Op
era
tion
al I
mp
act
(e.g
.,
Tal
k T
ime
)
Mai
ling
List
Gen
era
tion
Tel
em
arke
ting
Lis
t
Ge
nera
tion
Acc
ou
nt L
ist G
ene
ratio
n
E-M
ail
Lis
t G
ene
ratio
n
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
I nc rease Market Share 12 4 5 4 5 5 5 5 1 5 5 2 4 4 4 4
Increase S hareholder Value 20 3 3 3 4 4 4 3 2 4 3 2 3 3 3 3
Increase B rand Image 7 5 1 4 2 2 5 5 1 4 2 4 5 5 5 5
Increase Revenue (and P rofit ) 20 3 4 4 5 5 5 5 4 4 5 4 5 5 5 5
Increase Compet itive P os ition 9 4 4 4 4 4 4 5 4 5 5 4 4 4 4 4
Increase A ssoc iate
Ef fect iveness/Satis facti on14 1 4 5 1 1 4 5 4 4 5 4 5 5 5 5
Satsify Customers 18 5 4 4 3 3 3 5 1 5 4 5 5 5 5 5
Business V alue Score 100 343 371 394 358 358 421 460 249 439 421 354 439 439 439 439
Accessiblity /Availability of S ource
Data15 2 1 4 4 4 2 2 1 2 3 2 4 4 4 3
Tim e/Effort/Cost to Ext ract ,
Transform, & Integrate Source Data20 1 4 1 5 3 2 4 1 5 5 1 4 4 4 1
Source Data Reliabl ity and
Com pleteness15 1 5 1 5 5 1 4 1 3 5 1 5 4 5 1
CUD Process Def initions 10 1 4 1 5 5 1 5 1 5 5 1 3 2 5 1
Com pletness of Application Data
Models & Functional Specs10 1 5 2 5 5 2 5 2 4 5 2 4 4 5 1
SLA Requirements Achievable 10 1 4 1 5 5 2 5 2 4 5 2 4 4 5 1
IT Infrast ructure Preparedness 10 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
PM O & S DLC/SDM Maturit y 5 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
Data Gov. Organizat ional Readiness 5 3 2 3 2 2 2 3 4 3 3 1 3 3 4 1
Feasibili ty S core 100 110 310 150 395 355 145 335 120 320 385 120 340 315 385 115
Business Process
Business V alue & IT Readiness
Criteria
Weighting
Factor
Business Case Development (cont’d)
Questions and reference links
• Business Value Index (Intel)
– http://www.intel.com/au/directions/current-issue.htm
– http://www.intel.com/au/directions/pdf/bv-demo.zip
• Total Economic Impact
– http://www.forrester.com/pdfs/1,2712,3964,00.pdf
– http://www.forrester.com/Events/Content/0,5180,1738,00.ppt
• VAL-IT
– http://www.isaca.org/Template.cfm?Section=COBIT6&template=/ContentManagement/ContentDisplay.cfm&ContentID=25060
• Applied Information Economics
– http://www.hubbardresearch.com/dotnetnuke/Default.aspx
– http://www.federalelectronicschallenge.net/resources/docs/aie_desktop.pdf
Building the Business Case for
Business Intelligence and Analytics
Thank You…
50Confidential and Proprietary
Mr. Parnitzke is a hands-on technology executive, trusted partner, advisor, software publisher, and widely recognized database management and enterprise architecture thought leader. Over his career he has served in executive, technical, publisher (commercial software), and practice management roles across a wide range of industries. Now a highly sought after technology management advisor and hands-on practitioner his customers include many of the Fortune 500 as well as emerging businesses where he is known for taking complex challenges and solving for them across all levels of the customer’s organization delivering distinctive value and lasting relationships.
Contact:[email protected]
Blogs:Applied Enterprise Architecture (pragmaticarchitect.wordpress.com)
The Corner Office (cornerofficeguy.wordpress.com)
Data management professional (jparnitzke.wordpress.com)
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Building the Business Case for
Business Intelligence and Analytics