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Business Intelligence: The Next Generation of Innovation

Kurt Schlegel Notes accompany this presentation. Please select Notes Page view.

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BI is the Most Important CIO Priority for 3 Years Running 2008 CIO Technology Priorities To what extent will each of the following technologies be a Top 5 priority for you in 2008?

Business Intelligence Applications Rank 2008 1 Rank 2007 Rank 2006 1 1 2008 Increase* 11.20% Enterprise Applications (ERP, SCM and CRM) 2 2 ** 8.02% Server and Storage Technologies (Virtualization) 3 5 9 8.45% Legacy Application Modernization 4 3 10 5.79% Security Technologies 5 6 2 8.53% Technical Infrastructure 6 8 12 4.67% Networking, Voice and Data Communications (VoIP) Collaboration Technologies Document Management Service-Oriented Technologies (SOA and SOBA) 7 4 8 6.83% 8 10 4 7.75% 9 9 ** 7.91% 10 7 6

*

Unweighted average budget change

**

New question for 2007 6.71% Source: 2008 Gartner Executive Programs CIO Survey, January 10, 2008

Key Issues

1. How can BI evolve beyond reporting measures to making great decisions? 2. How can IT leaders drive broader BI adoption? 3. How can the scope of BI initiatives move from enterprise to industry wide?

How to Build a Skyscraper … and Why Does It Matter to BI? Monadnock (1891) Chicago 17 Stories Flatiron (1901) New York 22 Stories Burj Dubai (YE08) Dubai 164 stories

Today’s BI Strategy: Urban Sprawl

• BI focuses too much on

Bottom Up

reporting of performance measures.

• And the measures are not what your CEO or senior managers care about.

• Projects are built with little governance or alignment with corporate strategy.

Portfolio of BI and Performance Management Applications Expand The BI and Performance Management Continuum: Decision Making Becomes a Core Competency Strategy Driven Analyst/ Management Driven Process Driven

Business Process Enterprise Goals Business Functions • • •

Start with Corporate Strategy Align Key Performance Indicators (KPI) at Each Level Focus on Root Cause Analysis down to the process level

Result: Smarter Decisions

Key Steps to Evolve BI Beyond Reporting Measures to Managing Decisions Linking Planning, Reporting & Analysis Experimental Design Decision Making as a core competency

Cultural Change

Cost Quality

Tradeoff Analysis Skills Development Business Vision & Sponsorship

Data Lineage, Governance and Quality New Capabilities

Modeling Forecasting, Simulation, Optimization

IT Delivers Reports & Dashboards

A Text Book Example: The Oakland A’s

• • • "Moneyball: The Art of Winning an Unfair Game" written by Michael Lewis - Account of Billy Bean, manager of the Oakland Athletics baseball team Used BI to manage processes (e.g., scoring runs) and predict performance (e.g., games won) - Used "on base %" instead of "batting average" to draft players - History showed, in the data, that the old "gut feelings" and adages were wrong - Focused on avoiding outs instead of advancing the runner — a major change to the business process of baseball. Result: Able to win 90+ games per year with one-third the payroll of the New York Yankees

Key Issues

1. How can BI evolve beyond reporting measures to making great decisions? 2. How can IT leaders drive broader BI adoption? 3. How can the scope of BI initiatives move from enterprise to industry wide?

Driving BI Adoption Future Scenarios: Wide Ranging From Human- to Machine-Driven Empowering Users With BI Organizational Efficacy Requires the Proper Balance Optimizing Business Process With BI

Search

Visualization

Empowerment Measure Decide

Alignment

Transparency

Collaboration Manage Optimize

Orchestration

Business rules

Predictive modeling Discover Innovate BI Continuum

Interactive Visualization

Source: Advizor Solutions

BI Integrated with Search Structure, Qualification, Control of Information High Analysis Centric Reporting/Dashboards Ad hoc query BI Content Search Auto- Queries Explore Data Dimensions Content Analytics Enterprise Search Low Search Centric General to Specific Specific to General User Interaction Style with Information

Unicredit (HypoVerinsbank AG): Accelerating Decision Processes Interface Layer operational systems external data sources 75 sources Staging Area Operational Data Store validated, integrated historical data Extracts

transformation

370 jobs Load E/R model 127 labels ~ 2,000 columns Service-Layer Risk Models model parameter risk & pricing models business rule engine business rules 55 labels 1,660 columns Data Marts multidimensional data structure & reporting views

star model

10 facts 48 dimensions Reporting & Analysis HTML PDF CSV XML XLS 100 80 60 40 20 0 1st 2nd 3rd 4th Browser Mail FTP Scheduling Alerting 120 reports 150 users

ETL

Metadata Management

Data Modeler Visual Rules BI Platform

Information Buffet: EuroDisney

• • • • • Challenge: Optimize customer satisfaction and reduce expenses Solution: Define KPIs, predict, publish and alert Results: +15% customer satisfaction; Higher staff efficiency Success factors: Distributed decisions aligned with business goals Lessons learned: Cultural change takes years, but it's worth it

Key Issues

1. How can BI evolve beyond reporting measures to making great decisions? 2. How can IT leaders drive broader BI adoption? 3. How can the scope of BI initiatives move from enterprise to industry wide?

Five Major Mutually Reinforcing Discontinuities Open Source Web 2.0

Software as a Service Global Class Consum erization Discontinuities Affect

• • • • • • • Business Unit Independence Vendor Balance of Power, Distribution, Marketing and Business Models Implementation Alternatives Rogue End-User Investments Governance, Authority and Control Budgets Architectural Models

Understand the Trade-Offs That SaaS Presents

Upsides

- Pay for what you use - From an operational budget - Basic functionality that you

really

need, not bells and whistles that you

might

need - No operational management worries - No infrastructure overhead/management - Medium-term lower TCO - Faster implementations - Easier integration*

* Theoretically; particularly of SaaS to SaaS applications written with open APIs Downsides

- No asset value - Less central management of the application portfolio - More basic functionality* - Vendor management (incl. oversight of their operational management) - Security concerns - Longer-term TCO uncertainties - "OP2OD" (On Premise to On Demand) integration

* Sometimes real, sometimes perceived

BI as a Service (BIaaS – Not a Great name)

Input: Detailed data is provided to a trusted info aggregator Dimensional slicing & dicing BI Capabilities Combined with Vertically Specific Information Servies Neilsen IMS D&B Thomson Reuters Google Catalina Marketing NPD IRI Comscore LoanPerformance LexisNexis Skytide Output: Enriched data fed back to DW

Thomson Healthcare

3 Recommendations for 3 Innovations

 BI initiatives are overly focused on reporting measures.  Craft a BI strategy that makes decision making a core competency across your company.  BI is too hard for 80% of users.

Craft a BI strategy that embraces emerging technologies and embeds BI into business processes  BI initiatives lack an external perspective Embrace the combination of BI capabilities and industry specific information providers