Transcript What is Business Intelligence?
Aspects of Business Intelligence
Robert Mackinnon Analyst, IBRS
www.ibrs.com.au
Outline
Context – the changing Business Intelligence (BI) landscape Executive expectations of BI and their current frustrations with it The utility and potential of BI technology Strategic and tactical considerations for initiating and mobilising successful BI projects
We’re drowning in data…..
Volumes of structured and unstructured data are growing at extraordinary levels Quantitative and qualitative research shows that senior (C-level) business executives many BI initiatives: are largely unmoved by Projects take too long and cost too much Multi-source BI systems are a particularly vexing issue Also, we find senior and middle-ranking IT executives frustrated with gaining traction on BI initiatives are
”A manager is responsible for the application and performance of knowledge.” - Peter F. Drucker
Meeting CEO expectations
IBM Global CEO Study 2006: 65% of CEOs expect to radically change their organisations over the next 2 years They believe they have no alternative due to competition There are three fundamental classes of business change: Product/Service innovation Operations innovation Business Model innovation Many organisations have already squeezed efficiency out of operations through ERP systems
”The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow!” - Rupert Murdoch, Chairman/CEO, News Corp
Business Model Innovation and BI implications
CEOs focusing nearly 30% of their innovative efforts on business model innovation Organisations focusing on business model innovation experienced significantly better operating margin growth than their peers: 28% increase over their competitors in 5 years CIOs will be called upon to help drive innovation Source: The IBM Global CEO Study 2006
CEOs identified ‘insufficient access to information’ of the top 6 internal obstacles to innovation as one
Global Business & IT Priorities
Top CEO priorities
1. Growth – especially in a slowing economic environment 2. Competition – ongoing pressure from lower cost regions
3. IT as an Enhancer – we want agility and information!
4. IT as an
Inhibitor
– it takes too long to achieve outcomes
5. Information Overload – information juggling frustrating
6. Mergers & Acquisitions 7. Regulation 8. Return on Assets Source: Gartner/Forbes 2006 CEO Survey
Business Intelligence issues permeate 2, and arguably 3, of the top 8 issues - in both positive and negative ways
Better Decision Making
In general, business decision-making depends on finding the answers to three core questions: How are we doing? Why? What should we be doing? Gut Feel or Fact Driven?
“Managers spend 25% of their time searching for the information necessary to their jobs, and when they do find it, it is often wrong” - Accenture “75% of leading companies are incapable of creating a unified view of the customer” - Gartner
Reliable, timely information prioritised by strategy drives better decisions, in turn driving better performance
Market consolidation – then there were five…..
2007 was the most turbulent of BI years yet as major vendors vied for market dominance: Pilot Software SAP who took over Business Objects (and already had SAP BW and SAP Netweaver BI) Hyperion Cognos
Microsoft Oracle IBM
SAS
This makes it especially challenging for the IT executive making long term plans whilst trying to deliver for ‘tomorrow’
What is Business Intelligence?
Business Intelligence takes large quantities of corporate data and transforms it into information that is meaningful to the business Starting as a technology over 20 years ago with EIS (Executive Information Systems), BI has spawned a raft of technologies that, when well executed, can assist in taking the risk out of a company’s ability to execute
BI has been in existence since business began; now technology enables the concept
The Information Value Chain
Analytics Reporting Applications Intelligence What should we be doing?
Effectiveness <-> Strategy Executives Information How well did we do it?
Efficiency <-> Execution Management Data What did we do?
Integrity <-> Operations All users Processes Plan Market Make Sell etc.
Good BI strategies unlock the value generated from transactional data
5 Major BI danger signals
Build it and they will come Assemble organisational data & the value will be self-evident Can be IT or business unit lead Spreadsheets rule Multiple versions of the truth Can be an audit nightmare Questionable data integrity Data ownership unclear or non-existent IT is a steward, not the owner Who is responsible for data quality?
With good reporting tools users can serve themselves Assumes power users speak for the business users Self-service is important but BI is more complex than this Lack of executive engagement in BI initiatives IT is held responsible for success Executives and managers are not held accountable for the realisation of benefits Results in no value and no ROI
Six Steps To BI Success
Begin with the end in mind Know what BI technology is capable of Deliver incrementally Focus on the mantra: ‘ A single version of the truth ’ , to drive appropriate behaviours Data quality and integrity is paramount Strong leadership and change management strategies are essential for success
Begin With The End In Mind
What is the problem the business wants to solve?
Sharpen business performance?
React more quickly to customer spending patterns?
Improve the integrity of financial reporting and forecasts?
Eradicate multiple spreadsheets?
Know what BI technology is capable of
Practice the art of the possible
Understand what can and can’t be done with the technology Seek out successful BI projects/users What will work best within the business context?
Allow senior executives to attend demonstrations/site visits
The BI capability spectrum
BI is an umbrella term covering many capabilities
Deliver Incrementally
Start small, grow strong
Our research indicates that many BI projects run over time and budget and fail to meet user expectations Choose a small project that can deliver tangible benefits in just a few months (if possible) Once stabilised and organisational confidence has grown, use a roadmap approach to articulate planned, long-term directions
A Single Version of The Truth
Seemingly a truism, unless this principle is upheld the project will fail Call upon this mantra to bring about required organisational behavioural changes. A management mind-set such as: ‘…if it’s not in the data warehouse, then the information has little or no credence…’ is required Unless this is done, individually managed spreadsheets and Microsoft Access databases will burgeon and subvert the overall objective
Data quality and integrity is paramount
Data quality will be a problem: Consider the data equivalent of the ‘songlines’; understand that they exist in most organisations and use them as a means of understanding data transformations, as a way of getting the data right Caution: this can take considerable time Where data is aggregated by the BI platform, a ‘drill down’ capability is essential to allow specialist users to fully comprehend the data
Leadership & Change Management
Establish a mandate from the top and create strong business involvement Sponsorship needs to be with a (very) senior executive Consider using the system to link executive KPI performance to incentive payments where applicable Caution: a new, fact-based BI performance regime may trigger political resistance and challenge the very basis for the BI initiative Be sensitive to and understand the impact of the new technology on those that have to use it e.g. Avoid SMS alert ‘noise’ from event/data triggers
Tactical approaches to BI success
If using multiple data sources, carry out a Data Quality Maturity Assessment (DQMA) Use licences for analytical tools sparingly Consider establishing a Business Intelligence Service Centre (BISC) at an early stage, not when you need it Don’t commit to a BI technology choice, until you look carefully at vendor roadmaps
The Intelligent Business
"It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.“ Charles Darwin Robert Mackinnon, IBRS