17
PERFORMANCE & TECHNOLOGY ADVISORY Business Intelligence A good servant but a bad master David Slánský 28 th April 2010

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PE

RF

OR

MA

NC

E &

TE

CH

NO

LO

GY

AD

VIS

OR

Y

Bu

sin

es

s I

nte

llig

en

ce

A g

oo

d s

erv

an

t b

ut

a b

ad

ma

ste

r

Dav

id S

lán

ský

28th

Ap

ril 2

010

2

Inst

ead

of

intr

od

uct

ion

–th

e re

al w

orl

d t

od

ay

Two thirds of executives

feel that the quality of and

timely access to data is

poor and inconsistent

Up to halfof executive

managers place no

confidence in the numbers

presented to them.

Combined development of management and

inform

ation infrastructures results in a34%

perform

ance improvement.

Less than 50%of UK firms

believe that their

enterprise perform

ance

management systems

deliver useful insight

Despite the evidence presented to

support the success of BI, there is ample

evidence that many organisationshave

made little progress towards effective BI.

More worrying still is that of those whom

have tried have failed to achieve the

expected benefitsEstimates suggest that 75

percentof Business

Intelligence projects ere

perceived to have failed

3

Ke

y q

ue

stio

ns

Wh

ere

will

yo

u g

o?

What

do y

ou n

eed t

o o

verc

om

e?

Ho

w t

o g

et r

eport

s unders

tandin

g u

nd

er

contr

ol?

4

Mo

der

n B

I so

luti

on

s sh

ou

ld p

rove

its

val

ue

and

incr

eas

e b

usi

nes

s fl

exib

ility

Ma

nag

em

en

t re

port

ing

Sta

nd

ard

bu

sin

ess

re

port

ing

Re

gu

lato

ry r

epo

rtin

g

Ris

k m

ana

gem

en

t

Ch

urn

ma

nag

em

ent

Ca

mpa

ign

m

an

age

me

nt

Wh

ile

typ

ica

l B

I s

olu

tio

ns

su

pp

ort

Fle

xib

le in

form

atio

n

de

live

ry

Ah

ea

d th

inki

ng s

upp

ort

De

cisi

ons

and

re

aso

nin

g

Co

llab

ora

tion,

mu

tua

l u

nd

erst

and

ing

Tru

st

…m

od

ern

so

luti

on

sh

ou

ld b

rin

gA

re

cen

t su

rve

y o

f 70

0

au

tom

otiv

e d

istr

ibu

tors

fou

nd

tha

t th

ere

are

a n

um

ber

of

op

era

tion

al p

ract

ice

s th

at

corr

ela

te p

ositi

vely

to

hig

h p

erf

orm

anc

e.

In a

ma

jor

initi

ativ

e, t

he

re w

as

est

ablis

hed

a c

ompl

ete

ne

w

stru

ctu

re f

or

cont

rolli

ng t

he

finan

cia

l re

po

rtin

g sy

ste

ms

of

this

larg

e U

.S.

Au

tom

otiv

e

Dis

trib

uto

r. T

he

co

mpa

ny

lack

ed

con

sen

sus

on

ho

w t

o

imp

rove

its

repo

rtin

g, a

nd

wa

s su

fferi

ng f

rom

an

exc

ess

of

ma

nua

l wo

rk, a

hig

h le

vel o

f e

rro

rs, a

nd a

va

riety

of

diff

ere

nt a

pp

roac

hes

acr

oss

the

bu

sin

ess.

Re

cen

t te

chn

olo

gy

inve

stm

en

ts h

ad

b

ee

n p

erc

eiv

ed a

s m

issp

ent

an

d c

onf

lictin

g.

Th

e r

evi

ew

invo

lve

d

inte

rvie

win

g k

ey

exe

cutiv

es

an

d d

eve

lop

ing

a b

usin

ess

ca

se f

or

a n

ew

ap

pro

ach

tha

t co

uld

ge

ne

rate

ove

r U

S$

6

mil

lio

n i

n p

rod

uc

tivi

ty

sa

vin

gs

an

d o

ver

US

$2

m

illi

on

in

co

st

savi

ng

s.

5

Th

e fu

ture

will

bri

ng

tru

st a

nd

co

llab

ora

tio

n

1.F

orm

al g

ove

rnan

ce e

nvi

ron

men

t fo

r in

crea

sed

rel

iab

ility

2.S

oci

al B

I

3.B

ette

r b

us

ines

s ad

op

tio

n /

sem

anti

c

4.In

crea

sed

em

ph

asis

on

fle

xib

ility

an

d

tim

e-to

-mar

ket

red

uc

tio

n

5.S

hif

t to

dec

isio

n m

akin

g s

yste

m

6.In

teg

rati

on

in a

ll as

pec

ts

7.T

igh

ter

alig

nm

ent

to s

trat

egy

exe

cuti

on

If y

ou

are

usi

ng m

ulti

ple

in

form

atio

n s

yste

ms,

ho

w d

o

you

acc

ura

tely

me

asu

re

finan

cia

l pe

rfo

rman

ce a

cro

ss

diff

ere

nt a

reas

of

you

r o

rga

niza

tion

?

Th

e c

ons

olid

atio

n o

f in

form

atio

n n

eed

s a

nd

subs

equ

ent

co

nso

lida

tion

of

de

cisi

on

su

ppo

rt s

yste

ms

into

o

ne

ma

nag

emen

t in

form

atio

n

syst

em a

llow

ed

fo

r fa

r g

rea

ter

au

tom

atio

n b

y re

duc

ing

the

n

ee

d fo

r tim

e c

on

sum

ing

m

anu

al p

lan

nin

g a

nd

co

nso

lidat

ion

pro

cess

.

Th

is m

ean

t th

at t

he

clie

nt a

lso

h

as

a c

om

mo

n g

lob

al f

ina

nce

p

latfo

rm d

eliv

eri

ng e

ssen

tial

finan

cia

l da

ta t

o h

elp

the

m

tra

ck p

erf

orm

anc

e b

oth

at

a g

rou

p a

nd s

ub

gro

up

leve

l in

th

eir

glo

ba

l ope

ratio

ns.

Fu

rth

erm

ore

, th

e

impl

em

en

tatio

n o

f th

e n

ew

sy

stem

res

ulte

d in

a 2

0

pe

rce

nt

red

uc

tio

n i

n c

os

ts.

6

Ke

y q

ue

stio

ns

Where

will

you g

o?

Wh

at d

o y

ou

nee

d t

o o

verc

om

e?

Ho

w t

o g

et r

eport

s unders

tandin

g u

nd

er

contr

ol?

7

Bu

sin

ess

use

rs a

mo

ng

org

aniz

atio

n a

re f

acin

g s

imila

r is

sues

Los

s of

cre

dib

ility

Undere

stim

ate

d co

mm

unic

atio

n a

nd P

R

Los

s of

cre

dib

ility

Uncl

ear

data

linea

ge

Dis

illusi

on

/ lo

ss o

f cr

edib

ility

Repeat

ed r

equire

ment

sW

ork

aro

und

Out

put

s don

’t m

eet

the

qua

lity

require

ment

s (a

lso

due

to s

ourc

e sy

stem

s pr

oble

ms)

Work

aro

und

sD

isill

usi

on

/ lo

ss o

f cr

edib

ility

Uncl

ear

prio

ritie

s an

d deliv

ery

ter

ms

Use

rs d

on’t

trust

the

solu

tion

Use

rs r

equire

redu

ndan

t w

ork

Manag

em

ent

->

con

solid

atio

n

Use

rs d

on’t

unde

rsta

nd

solu

tion

cont

ent

in t

he

sam

e w

ay

Long

deliv

ery

ter

ms

Solu

tion

arch

itect

ure

infle

xible

(se

ries

of

loose

ly

linke

d dat

a m

art

s)

Require

men

ts f

lood

Silo

-base

d ap

pro

ach;

user

req

uire

ment

s is

ola

ted

Imp

acts

Cu

rren

t si

tuat

ion

Th

is g

lob

al m

inin

g c

om

pa

ny

fou

nd

th

at a

sim

plifi

ed

da

ta m

od

el w

as

the

an

swe

r to

su

rviv

ing

in a

tu

rbul

en

t ma

rke

t.

Fo

r e

ven

the

mos

t ad

ept

ma

nag

er,

h

avi

ng

to m

ana

ge

com

mo

dity

p

rice

s th

at f

luct

uate

ove

r 2

00

pe

rce

nt i

n o

ne

ye

ar

is m

ore

tha

n

just

a c

hal

len

ge

. Fo

rtu

na

tely

, th

is

glo

bal m

inin

g h

ouse

wa

s p

rep

are

d.

Th

rou

gh

a t

imel

y e

xam

ina

tion

of

the

dri

vers

of

valu

e,

the

y w

ere

ab

le t

o id

en

tify

wh

ich

we

re t

he

ke

y to

thei

r b

usi

nes

s a

nd

wh

at

ha

d to

be

re

po

rte

d to

the

boa

rd a

s th

e

ma

rke

ts c

han

ged

. B

y us

ing

the

in

sig

hts

ga

ine

d f

rom

the

val

ue

-d

rive

r a

naly

sis,

the

clie

nt

wa

s a

ble

to

dis

till t

he

ke

y e

lem

en

ts o

f the

d

ata

mod

el r

eq

uire

d fo

r fa

st

de

cisi

on

mak

ing

.

A f

ast

er

data

co

llect

ion

pro

cess

w

as

est

ablis

hed

. B

y us

ing

a

com

mon

dat

a m

ode

l, w

ith c

lear

ly

ag

reed

co

mm

on

de

finiti

ons,

the

o

rga

niza

tion

wa

s a

ble

to m

ake

im

me

dia

te d

ecis

ions

ab

out

st

opp

ing

, re

sum

ing

, an

d s

tart

ing

in

vest

me

nts.

Th

ey

cou

ld c

lea

rly

fore

cast

th

e im

pac

t o

f th

e tu

rbu

lent

m

ark

et

plac

e a

nd

ha

d th

e a

bili

ty t

o

ma

ke c

ritic

al o

pera

tion

al

de

cisi

ons

.

8

Th

ere

is n

o o

ne

size

fit

s al

l so

luti

on

…b

ut

ther

e ar

e st

ill

som

e g

ener

ic “

wh

at h

as w

ork

ed”

hin

ts…

So

luti

on

o

per

ati

on

sE

nvi

ron

men

t d

eve

lop

men

t

Bu

sin

ess

use

rs

un

der

sta

nd

ing

�C

on

ten

t u

nd

ers

tan

din

g

�F

un

ctio

na

lity

un

de

rsta

nd

ing1

Ch

an

ge

man

age

men

t

Co

ns

oli

da

tio

n,

pri

ori

tiza

tio

n

2

So

luti

on

Arc

hit

ec

ture

�B

Ic

om

po

ne

nts

�In

vo

lve

d i

nE

A�

De

sig

n s

ec

uri

ty

3S

olu

tio

n A

rch

ite

ctu

re

�B

Ic

om

po

ne

nts

�In

vo

lve

d i

nE

A�

De

sig

n s

ec

uri

ty

3

De

velo

pm

ent

pro

jec

ts

4

De

velo

pm

ent

pro

jec

ts

4

Ru

nn

ing

app

lica

tio

n

�A

va

ilab

ilit

y�

Sec

uri

ty�

Re

so

urc

es

, bu

dg

et

5

Budget,resources

6 Budget,resources

6

Use

rs r

eq

uir

eme

nts

A c

lien

t w

as

at

a lo

ss to

exp

lain

su

dde

n a

nd

une

xpe

cte

d

vola

tility

in k

ey

cost

lin

es

du

ring

th

e r

ecen

t ec

ono

mic

tu

rbul

enc

e.

Ma

na

gem

ent

had

a

lso

ofte

n fa

iled

to n

otic

e p

oo

r p

erf

orm

anc

e o

f ke

y in

dic

ato

rs

in t

ime

to m

ake

ne

cess

ary

d

eci

sio

ns a

nd c

ha

nges

.

Po

or

info

rma

tion

, go

vern

an

ce

an

d in

ade

qua

te p

roce

sses

had

si

gnifi

can

tly c

on

trib

ute

d to

poo

r m

ana

gem

ent

dec

isio

ns

tha

t ‘c

ost’

the

org

aniz

atio

n o

ver

US

$7

2 m

illio

n.

Th

ey

pri

orit

ize

d fr

om

hu

ndre

ds o

f pe

rfo

rma

nce

m

eas

ure

s to

pro

duc

e a

m

ana

gea

ble

num

ber

such

as:

vo

lum

e o

f cus

tom

ers

; ch

urn

ra

te;

reve

nu

e; m

arg

in.

Th

is

he

lpe

d th

e c

lien

t to

cre

ate

a

sim

ula

tion

mo

del

wh

ich

e

na

ble

d h

im t

o a

sses

s th

e

ou

tco

me

of c

han

gin

g v

aria

ble

s su

ch a

s p

rice

and

cu

sto

me

r se

rvic

e,

and

lea

rn h

ow

va

rio

us

me

asu

res

are

inte

rrel

ate

d.

As

a r

esu

lt, th

e b

usin

ess

no

w

ha

s a

n u

nde

rsta

ndi

ng

of

how

a

chan

ge

in p

rice

an

d s

pee

d o

f cu

sto

me

r se

rvic

e re

spo

nses

a

ffec

t th

eir

pe

rfo

rman

ce.

9

Ke

y q

ue

stio

ns

Where

will

you g

o?

What

do y

ou n

eed t

o o

verc

om

e?

Ho

w t

o g

et r

epo

rts

un

der

stan

din

g u

nd

er c

on

tro

l?

10

Ma

y b

e yo

u h

ave

the

“déj

àvu

”fe

elin

g

PaidMovement

OSMovementIncurredMovement

IncurredFrom

Incurred As At

SettCcyISO

ReportingClass1

ReportingClass2

EventCodeEventName

44092

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50000

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Personal Accident

Personal Accident

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50000

12588USD

Personal Accident

Personal Accident

60007tertwertwer

77146

4872

50671

50000

63242USD

Personal Accident

Personal Accident

60007gsdfgsdhg

91854

36637

48384

50000

36584USD

Medical Expenses

Medical Expenses

50149jdfhfdsgsf

63759

32479

26252

50000

25704USD

Contingency

Contingency

50315ewrtwertre

37632

81494

67870

50000

89962USD

Personal Accident

Personal Accident

60005gsdfgdsggg

20096

46492

80184

50000

79246USD

Personal Accident

Personal Accident

60004gbbvscbbsdfb

14257

31754

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50000

44500USD

Medical Expenses

Medical Expenses

50298gsdgdsfgsdfg

2919

40800

37178

50000

99374USD

Personal Accident

Personal Accident

50299gdsgsdfgdfsgds

61176

91362

40666

50000

8043USD

Medical Expenses

Medical Expenses

50149gsfdgsfdgdfg

47536

25570

9927

50000

7049GBP

Bloodstock

Bloodstock

50325fdgsdgdsfgd

60923

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50000

56982GBP

Bloodstock

Bloodstock

60002rewtwretrwe

34803

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50000

45870GBP

Bloodstock

Bloodstock

60002trewtrwtrt

86536

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Bloodstock

Bloodstock

60002twertwretwr

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difference?

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incorrect!

Can I see

the detail?

I have slightly

different

number. W

hy?

What are other

classes?

What does

this mean?

What is the

difference?

This code

should not

apply here

You m

ay

consi

der

usi

ng

fram

ew

ork

s fo

r ca

sh

report

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cast

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wh

ich r

educe

d the fin

anci

al

close

period f

rom

25 to 1

1

da

ys.

By

doin

g s

o,

you m

ay

be

able

to r

ele

ase

up to

US

$29.2

mill

ion in

cash

. A

fter

thre

e w

eeks

a c

lient

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gnose

d the is

sues

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began w

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redefin

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ned

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trate

gic

obje

ctiv

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to d

esi

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moc

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ack

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cre

ate

d a

tra

nspare

nt

vie

w o

f w

ork

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apita

l and

cash

man

agem

ent w

hic

h

gave

inve

stors

cla

rity

on

perf

orm

ance

.

11

Wh

at d

o y

ou

mis

s?

Transparency

Structure

Highlights

Decision

making

simplification

Storyline

Common

understanding

Is it

poss

ible

to a

chie

ve a

coh

ere

nt

view

of

the t

ruth

in a

cost

-eff

ect

ive

manner

wh

en y

our

busi

ness

has

more

than a

hu

ndre

d b

illio

n d

olla

rs

of

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nu

e,

ove

r 50,0

00

em

plo

yees,

glo

bal o

pera

tions

with

hun

dre

ds

of

pro

duct

s and

chann

els

? F

or

this

glo

bal o

il co

mpany

the a

nsw

er

was

an

em

phatic

“ye

s.”

Aft

er

many

years

of

signifi

cant

syst

ems

inve

stm

ents

, th

e c

lient

still

fo

un

d t

he

y ha

d in

consi

stent

report

ing m

eth

ods

—th

ey

were

no

close

r to

obta

inin

g a

“si

ngle

vers

ion

of

the t

ruth

.”T

he p

rolif

era

tion o

f sy

stem

s, d

ata

ware

ho

use

s, a

nd

report

s se

em

ed t

o b

e g

ett

ing

wors

e.

It w

as

clear

that

contin

uin

g

with

the s

am

e a

ppro

ach

.

Segre

gatio

n t

he g

ove

rna

nce

model

into

thre

e la

yers

help

ed.

The f

irst

w

as

to id

entif

y w

ho r

eally

ow

ned

and c

ontr

olle

d t

he in

form

atio

n,

the

se

cond w

as

to lo

ok

at

who u

sed

the in

form

atio

n,

and t

he t

hird w

as

wh

o p

rod

uce

d it

. B

y usi

ng

adva

nce

d f

aci

litatio

n m

eth

ods

an

d

tools

, th

is o

rganiz

atio

n w

as

able

to

defin

e c

lear

role

s an

d

resp

onsi

bili

ties

for

ow

ners

hip

an

d

use

d a

share

d s

erv

ice c

apabili

ty t

o

deliv

er

mast

er-

data

managem

ent.

T

he o

utc

om

e le

d t

o s

ignifi

cant

impro

vem

ents

in d

ata

qu

alit

y and

consi

stency

, lo

wer

cost

, and f

ast

er

deci

sion m

aki

ng.

12

Co

mm

on

un

der

stan

din

g e

nvi

ron

men

t

Wha

t do

yo

u d

o if

yo

ur

com

pan

y h

as

gro

wn

th

rou

gh

mul

tiple

a

cqu

isiti

on

s —

and

inve

sto

rs

wa

nt

you

to

driv

e s

yne

rgy

be

nef

its —

but

you

ca

n’t

get

glo

bal o

r re

gio

nal i

nsi

ght

into

ke

y o

pe

ratio

na

l com

pon

ent

s?

Yo

u n

ee

d to

focu

s. A

lead

ing

g

loba

l bre

we

r g

rew

th

rou

gh m

ore

th

an

twe

nty

acq

uisi

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ho

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ver,

ea

ch a

cqui

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co

mp

an

y ha

d d

iffe

ren

t wa

ys o

f d

efin

ing

ch

ann

els

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sto

me

rs,

an

d p

rodu

cts.

Th

is m

ade

inte

rna

l b

enc

hm

ark

ing

diff

icu

lt, if

no

t im

poss

ible

. H

avi

ng

trie

d to

st

and

ard

ize

the

info

rma

tion

se

vera

l tim

es,

the

y re

aliz

ed

tha

t a

diff

ere

nt

app

roa

ch w

as

req

uire

d.

Th

e w

ay

ou

t w

as

to

be

com

e e

xplic

it a

bou

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e

req

uire

me

nts

of e

ach

ke

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st

ake

hold

er

to e

xecu

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e

stra

teg

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lan

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a r

esu

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re a

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to

red

uce

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vo

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f in

form

atio

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req

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me

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sig

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ad

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sim

plif

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tem

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d d

ata

mod

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o d

eliv

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the

info

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re

qui

red

to m

ake

st

rate

gic

de

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r th

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Ce

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En

cycl

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Bu

sin

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Sin

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Ap

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po

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olid

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d re

port

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Us

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Da

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13

Th

ere

is n

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that

mu

ch e

nc

yclo

ped

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lem

ents

Is it

poss

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to b

e m

ore

eff

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ive a

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eff

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glo

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learn

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hat

a

sharp

focu

s on w

hat

matt

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can

pro

vid

e m

ore

inci

sive

info

rmatio

n a

t a

signifi

cantly

low

er

cost

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Rath

er

than t

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lass

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yste

ms

appro

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of

colle

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ass

es

of

confli

ctin

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usi

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requirem

ents

and

then t

ryin

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o r

eco

nci

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his

into

a

cohere

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set

of

requirem

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is

glo

bal s

upplie

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to s

tart

with

the

core

info

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equire

d t

o e

na

ble

the

busi

ness

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invo

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deta

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naly

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of th

e e

xist

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busi

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nd t

he s

trate

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By

re-d

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he m

easu

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that

refle

ct

real v

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e,

the c

om

pany

set

new

key

perf

orm

ance

indic

ato

rs (

KP

Is),

co

vering p

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orm

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fro

m a

fin

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opera

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al,

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isk

pers

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sta

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num

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form

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as

a s

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he n

um

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rep

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duplic

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f re

dun

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nt

info

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are

that,

to s

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the b

usi

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stra

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it n

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mus

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oniz

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nnin

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fore

cast

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and r

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hat

all

link

into

the s

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form

atio

n.

14

Alt

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ug

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loo

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om

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it

is n

ot

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mpan

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tech

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syst

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lifera

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tal

num

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pplic

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more

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the tota

l num

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of r

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nifi

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applic

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com

ple

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hours

w

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reduce

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perc

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15

So

yo

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exp

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nce

d t

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…m

odern

B

I so

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take

th

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flex

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your

deci

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maki

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…all

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rob

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…yo

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BI

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16

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at t

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ext?

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rea

s a

nd

invo

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agu

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Get

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sin

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pos

sib

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munic

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ben

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Sta

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both

gro

win

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he

top

lin

eand

support

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info

rmatio

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ork

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.

In s

ix m

on

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17

Da

vid

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ý

KP

MG

Čes

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blik

a, s

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©2

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G Č

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blik

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MG

In

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