Business Intelligence and Analytics: Leveraging Information for Value Creation and Competitive Advantage

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1 PRACTICES REPORT BEST PRACTICES SURVEY: AGGREGATE FINDINGS REPORT Business Intelligence and Analytics: Leveraging Information for Value Creation and Competitive Advantage April 2007

2 Table of Contents Program Background and Study Objectives... 3 Participant Profile... 4 Executive Summary... 5 Business Intelligence Drivers and Profile... 6 Business Intelligence Value Maturity Model Business Intelligence Best Practices Conclusion P. 2

3 Program Background and Study Objectives PROGRAM BACKGROUND In March 2006 ASUG and SAP agreed to jointly launch a series of best practices surveys in areas of Business and IT Strategy. The Best Practices Survey Program serves as a forum for SAP customers to understand current and emerging trends in technology and business processes, identify drivers of performance and understand implications of adopting best practices. Since the program launch, over 1,000 individuals have participated. To learn more about the ASUG/SAP Best Practices survey programs, visit us online at SAP BI/ANALYTICS SURVEY: STUDY OBJECTIVES Objectives. The ASUG/SAP BI/Analytics survey was designed to address three key questions: What value have organizations achieved from their investments in business intelligence? What are the best practices of leading organizations that enable them to achieve business value? What trends and changes are seen as companies evolve and mature their business intelligence capabilities? Analysis Framework. The Value Realization Maturity Model framework is built in 4 dimensions: Information and Analytics: the extent to which businesses information needs are met in terms of business relevance, presentation, latency and detail. Information and Analytics also includes the assurance that BI master data is accurate to support the business requirements. Governance: the extent to which the business owns, manages, and is accountable for business intelligence. This includes the extent to which the organization follows best practices for organizational design, roles, accountabilities, and competencies around BI as well as the extent to which the organization applies well defined practices for internally-focused change control and externally-focused change management. Standards and Processes: the extent to which the organization defines, adopts, implements and audits standards and processes for standards development, BI master data management, post-production sustainment and service level agreements. Application Architecture: the extent to which the organization has created a robust application environment that is scalable and flexible to meet the changing organizational requirements. Value Definition. In the survey three primary value drivers emerged: User satisfaction: How satisfied are all types of BI users (casual users, executives, power users, etc.) with the current set of analytics tools? Project ROI: What level of investment return have business intelligence projects generated? Cycle time reduction: To what extent have cycle times been reduced for BI projects? P. 3

4 Diverse Participation Companies of all sizes, and many different industries and regions, participated in the survey. Survey results are based on ~83 total survey submissions. Revenue Mix % of overall responses, n=79 Regions Included % of overall responses, n=83 >$10B 22%, 17 Companies <$1B 38%, 30 Companies Middle East 4% Latin America 10% Global 32% APAC 7% $5.0B - $9.9B 11%, 9 Companies Europe 9% $1B - $4.9 B 29%, 23 Companies North America 38% Industry Mix % of overall responses, n=83 Consumer Products 19%, 16 Companies Others 39%, 32 Companies Pharmaceuticals 7%, 6 Companies Professional Services 6%, 5 Companies Chemical 6%, 5 Companies Service Providers 5%, 4 Companies Respondent Function/Title % of overall responses, n=83 Development Director 4%, 3 Companies VP-Business Intelligence 4%, 3 Companies Others 48%, 40 Company Public sector 4%, 3 Companies Oil & gas 4%, 3 Companies High tech 4%, 3 Companies Engineering, Construction 4%, 3 Companies Health care 4%, 3 Companies IT Director 6%, 5 Companies BI Program Director 16%, 13 Companies Project Manager/Director 23%, 19 Companies P. 4

5 Executive Summary What s the value of adopting best practices? Getting value from BI/Analytics investments is critical in today s business environment. But how does a company best address attaining value from these projects? The BI/Analytics Best Practices Survey addresses this very question. The good news: most companies believe that they have achieved significant levels of financial benefit from their initiatives. 80% of the Business and 60% of IT within the highest maturity BI/Analytics organizations 'Strongly Agree' there is a high value in BI relative to its total cost of ownership. This also indicates close alignment between the business and IT on BI initiatives. Mature BI/Analytics organizations realize 11% higher returns on investment versus less mature companies 80% of the highest maturity BI/Analytics organizations agree that BI/Analytics projects are generating the value defined in their business cases BI/Analytics maturity directly impacts an company s time-to-value. A full 40% of the highest maturity BI/Analytics organizations experience greater than 20% cycle time reductions; the lowest maturity organizations report no cycle time reductions However, many companies may be unknowingly leaving value on the table by not adopting best practices. Only 9% of Level 1 and 2 companies believe they are generating the value defined in their business cases and only 12% of their business partners believe there is a high value in BI relative to the total cost of ownership What are BI/Analytics Best Practices? Survey results demonstrate that companies with more mature value BI/Analytics approaches have the capability to achieve greater value earlier from their programs. Organizations are realizing significant value in moving toward a single logical BI instance with a best practices layered architecture. Almost half of all companies surveyed report having common standards, policies and procedures while 3/4 of level 3 and 100% of level 4 companies report the same Key to achieving flexibility, data re-use, reduced cycle times and enabling a single version of the truth is the active management of the Data Model and Meta-Data. Level 3 and 4 companies have adopted this best practice. Master data is becoming an even greater area of focus with nearly half all companies surveyed aligning their BI master data efforts with existing EDM and other business initiatives P. 5

6 Business Intelligence and Analytics: Key Drivers The top three drivers of BI and analytics indicate the significant pressure that companies face in today s market: Increase revenue, increase profit and improve customer service. The other factors, which focus on operational improvement, indicate that companies have already taken steps to reduce costs and improve processes. Increased revenue, improved financial management and improved customer service are the most critical drivers of a organization s information needs Average significance score (1 5 scale) Increased Revenue 4.1 Improved overall financial management (profit/loss) 4.0 Improved customer service and retention 4.0 Ease of expansion/growth and increased flexibility 3.9 Operational cost reduction 3.9 Faster, more accurate day-to-day transactions 3.8 P. 6

7 Analytics: Impact on Key Business Processes The importance and impact of BI and analytics to specific business processes mirrors the overall drivers of BI and analytics presented on the previous slide. Respondents were asked how important analytics are to their organization s various business processes. Not surprisingly, Finance (Financial Management and Control) is the #1 area where analytics are being leveraged today. The next four ranked business processes are related to top-line growth including Revenue Optimization and Customer Insight. Interestingly, Supply Chain Optimization was rated as one of the number one areas of focus for the future Importance of Analytics to business processes: today Today Future 5.0 and in the future Financial Mgmt/Cost Control Revenue Optimization Customer Insight Enhancing, Expanding or Developing New Markets Sales Force Effectiveness Supply Chain Optimization Product Portfolio Mgmt. Enhancing, Expanding or Developing New Products Compliance Competitive Intelligence Marketing Optimization Regulatory Reporting Global Sourcing Optimization Project Monitoring & Control Treasury/Asset Optimization Significance P. 7

8 Current Profile of BI Projects Companies regardless of maturity are investing more money in information al and strategic projects. 40% of projects are intended to improve IT capability or reduce the cost of doing business, while another 40% of projects are focused on providing better information to the organization. 20% of projects are strategic, providing advanced analytic capabilities which help organizations gain competitive advantage. A trend towards more strategic BI projects is expected to continue with external pressures and advancements. The data is in place to develop insight providing a clear competitive advantage. Profile of BI at an Organization: The average company executed 8 BI projects in the past year The average company spent $10.8M (internal and external cost) annually on BI costs The average BI project took 6.2 months to complete The average number of named users in the BI System is 1,100 The average named user spends 25% of their time on BI and Analyticsrelated activities BI Super-Users and BI Casual users spend two-thirds of their time collecting/ capturing data and ensuring data quality and one-third of the time analyzing the data for better decision-making Most BI projects were focused on providing better information to the organization. % of overall responses Value Strategic (20%) Informational (40%) Transactional (24%) Infrastructure (16%) Projects whose objective is to gain competitive advantage or major innovation Projects whose objective is to provide better information to the organization Projects whose objective is to reduce the cost of doing business Projects whose objective is to provide improved IT capability P. 8

9 BI Usage Profile Overall, front-line employees, power users and supervisors are the user groups most likely to leverage BI. In more mature companies where information is more readily available, managers and executives begin to use the information more. Over half of the companies surveyed, are not yet extending the information chain outside of the organization to suppliers and customers. Those that do are at higher levels of BI/analytics maturity. Power Users are the most frequent users of business intelligence; while suppliers and customers are least likely to leverage these tools User Type Daily Often Occasionally Rarely Never Front line Employees 18% 25% 25% 14% 19% Power Users 57% 32% 7% 4% - Supervisors 15% 38% 30% 11% 6% Managers 11% 33% 35% 19% 2% Executives 13% 17% 27% 30% 12% Suppliers 6% 9% 14% 15% 56% Customers 11% 3% 16% 11% 59% P. 9

10 Measuring BI Impact Companies typically view the value of BI in three ways. One quantitative measure is the reduction in cycle time to develop analytics. In mature clients, they begin to re-use data, develop and deploy more flexible data models. A more qualitative measure of BI value is customer/user satisfaction. More mature clients have higher user adoption and acceptance rates. ROI, is perhaps the most holistic way to measure BI value, as it measures the benefits of the BI solution in terms of improved top-line performance and productivity relative to the cost. However, this study shows that a majority of customers do not measure ROI on BI projects, especially those in lower maturity levels. However, the more mature companies do measure ROI and have a significantly higher return. Defining BI Performance ROI What return did the BI project provide? User Satisfaction Do BI tools result in measurable improvements in internal customer satisfaction? Cycle Time Reduction Did the organization achieve measurable improvements in cycle times and other impact metrics? P. 10

11 Achieving Business Value from BI: User Satisfaction and Cycle Time Reduced cycle time and high user satisfaction are two key measures of a successful BI solution. On average, about one-quarter of analytics users are satisfied or extremely satisfied with current analytics tools. The average user-satisfaction score on a scale of 1 5, is a 2.9. From a cycle time reduction perspective, over half of companies report that cycle times for projects have been reduced. The average cycle time reduction is approximately 6% User Satisfaction: 26% of users are satisfied/ Cycle Time 56% of companies report that cycle extremely satisfied with current analytics tools times have reduced % of respondents % of respondents Neither Satisfied/ Dissatisfied 38% Satisfied 20% Cycle Time Reduction between 11-20% 12% Cycle Time Reduction between 1-10% 34% Cycle Times have increased 7% Extremely Satisfied 6% Dissatisfied 26% Extremely Dissatisfied 11%, <20% Cycle Time Reduction 10% Cycle Times have stayed the same 37% Average User Satisfaction Score (All Companies, Scale of 1-5): 2.9 Average Cycle Time Reduction (All Companies): 6% P. 11

12 Achieving Business Value from BI: Return on Investment While companies track improvements in user satisfaction and cycle time reduction, very few companies measure ROI of their BI projects. Those that do report significant levels of ROI from their BI initiatives. 67% of companies do not know/do not measure ROI.however, those that do achieve significant ROI for their BI projects performance % of overall responses ROI performance, % of overall respondents 11-15% 30%, 1 Company Measure ROI 33%, 27 Companies Do Not Know/Do Not Measure ROI 67%, 56 Companies 16-20% 11%, 4 Companies 20-25% 19%, 4 Companies 5-10% 30%, 10 Companies >25% 11%, 13 Companies Average ROI for all Companies that measure ROI: 13% P. 12

13 BI/Analytics Maturity Model There are many factors that indicate the level of maturity in Business Intelligence and Analytics. SAP assesses maturity in four dimensions, and companies may have a different level of maturity for each dimension. The foundation for the maturity model is an organizations BI Strategy and approach to Business Value. Information and Analytics Level of usage of consistent KPIs and Analytics across the company and value chain Information presented to the user in the manner desired and the required level of detail and latency BI master data processes well defined and master data quality audited Governance Level of enterprise-wide governance with business leadership BI competency center is mature with well defined roles, accountabilities and competencies Governance includes feedback mechanisms from the full value chain Project findings or scope changes are assessed for business case impact Standards and Processes Uniform, comprehensive standards and processes applied across the enterprise and audited BI Process and standards are documented, consistently followed and audited Master data is fully standardized Ownership and responsibility is established for all data elements used by the business Application Architecture Robust and flexible BI architecture Global Enterprise Data Warehouse implemented Ability for high-speed analytics Robust and user-friendly presentation layer The Foundation: BI Strategy and Business Value Usage of a long-term BI strategy and plan that is linked to business strategy Value approach to BI which leverages business cases, metrics and KPIs for decision making P. 13

14 BI/Analytics Maturity Model Stages of Excellence Companies exhibit different levels of maturity along the BI Best Practice Framework. Companies falling into Level 1 have less mature/lower levels of best practice adoption while companies falling into Level 4 have the most mature/evolved levels of best practice adoption. BI Performance Stages Level 4 Level 3 Information and Analytics Governance Standards and Processes Application Architecture Level 1 Requirements are driven from a limited Executive group Not standardized or linked to business needs Few Operational reports with little business benefit Historical reporting. Information reliant on lagging indicators No Value KPIs IT Driven BI Governance Technology-centric organization and implementations No/little business participation in projects Weak end-user skills. No employee or manager self service No BI competency center Data access limited to few key individuals Do not exist or are not uniform No service level agreements (SLA s) Design, development and management processes are informal High use of generic BI objects or heavily customized development No reuse of data or information Non-standardized master data Data ownership is undefined or conflicting BI Silos for each Business Significant variances between BU s Limited access to information Users get what IT gives Ad-hoc patches & Upgrades No enterprise standardization Minimal documentation Level 2 KPIs and Analytics are identified, but not well used Weak to moderate business ownership of requirements Multiple sets of KPIs and information requirements often conflict Generic KPIs are not business optimized Value measurement is coincidental Business Driven BI Governance Evolving BI Processes and standards may be documented Verbal SLA's in place; no formal and regular update/negotiation process Little to moderate reuse of information Initial efforts to standardize master data Occasional executive interest in data when considering major initiatives Some Shared BI Applications Variances between BU s with multiple BI systems Heavy reliance on spreadsheets and data manipulation Planned migration to better landscapes Documented plans for patches and upgrades Shared documentation P. 14 KPIs and Analytics are identified and effectively used Strong business ownership of requirements Common set of rationalized KPIs and information requirements Business relevance of every metric validated Value is tracked and reported Ad-hoc report development in place Business Governance with Competency Center Developing High Business Ownership to all BI Activities All BI activities guided by business goals Business case and ROI for BI projects Moderate end-user skills with pockets of strong users. No lack of super-users ESS fully adopted; MSS partly adopted BI competency center is new or developing Security and Authorizations becoming uniform Low to moderate participation of Business in BI governance Considering a competency center Weak to moderate end-user skills. Some core group of super-users Employee Self Service (ESS) partially used Manager Self Service (MSS) not in place Proliferation of data access through Excel Exist and are not uniform Evolving effort to formalize BI process and standards are documented but not always followed Informal governance group which is mainly responsible for issue resolution Written SLA's in place, but no formal and regular update process Moderate to heavy reuse of information. Master data standardized to large extent Each major data area has a senior champion who drives data standardization and quality Consolidating and Upgrading Initial attempts at implementing a Global Enterprise Data Warehouse (either logical or physical) Spreadsheets are used selectively Central tech support Patches up-to-date System consolidation planned and / or implemented KPIs and Analytics are used to manage the full Value Chain Strong business ownership of requirements Increased use leading indicators for KPIs and analytics Collaborative development of requirements across the value chain Robust ad-hoc analytics and information availability (structured and unstructured) Enterprise-wide BI Governance with Business Leadership Enterprise participation on all developments Governance includes feedback mechanisms from the full value chain ESS and MSS fully adopted BI competency center is mature Standard support across the enterprise High security and authorization Uniform, followed and audited BI Process and standards are documented, consistently followed and audited Formal governance board in place for strategy and direction Written SLA's in place with formal and regular update/negotiation process Heavy reuse of information Master data is fully standardized Ownership and responsibility is established for all data elements used by the business Robust and flexible BI architecture Global Enterprise Data Warehouse implemented BI platform viewed as a strategic enabler for Business Ability for high-speed analytics Robust and user-friendly presentation layer High reliability of delivery to local, regional and global business needs

15 Survey Respondents Level of BI Maturity Participant maturity levels were calculated as an average of individual response scores to questions which reflected their level of best practice adoption along the four dimensions of the maturity model. Companies were then grouped into one of four best practice maturity levels based on their score, with Level 1 being the lowest level of best practice adoption and Level 4 being the highest. Many companies have an opportunity to enhance their approach to BI % of companies by level of best practice maturity 46% 35% 13% 6% Level 1 Level 2 Level 3 Level 4 P. 15

16 Maturity Matters: Maturity Impact on User Satisfaction Companies adopting more mature BI processes (levels 3 and 4 Top Performers ) are better positioned to achieve value from their BI projects. The following charts represent how BI value increases as companies move from Level 1 to Level 4 of the Best Practices Framework from a user satisfaction perspective. 89% of the companies which strongly agree that the BI tools are usable and friendly are level 3 or 4 companies. User Satisfaction Scores are 61% higher for Level 4 companies compared to Level 1 companies Level of user satisfaction on a scale of 1 5; with 5 being extremely satisfied Moreover, all BI-user types report higher satisfaction levels for more mature companies Level of user satisfaction on a scale of 1 5; with 5 being extremely satisfied % Level 1 Level 2 Level 3 Level Front-line Employees Power Users Level 1 Level 2 Level 3 Level 4 Supervisors Managers Executives Suppliers Customers P. 16

17 Maturity Matters: Maturity Impact on Cycle Time Companies adopting more mature BI processes (levels 3 and 4 Top Performers ) are better positioned to achieve reduced cycle time to delivery for their BI projects. The following charts represent how companies a realizing cycle time reductions as they move from Level 1 to Level 4 of the Best Practices Framework. There is a clear correlation between companies who have achieved Level 3 and Level 4 maturity and their ability to reduce cycle time to delivery. Based on the results, Companies in Levels 1 and 2 are likely to experience no cycle time reduction. 40% of Level 4 Companies have experienced cycle time reductions of greater than 20% % of companies Cycle Time Reduction of greater than 20% While Level 1 and Level 2 companies are much more likely to experience no improvement or even increases in cycle times % of companies with Cycle time inc increases or stayed the same 40% 62% 81% 49% 16% 0% 0% 6% Level 1 Level 2 Level 3 Level 4 Level 1 Level 2 Level 3 Level 4 Level 1 companies have seen no improvement in the cycle time. In fact, it has gone up in 18% of the respondents. Conversely, 100% of the companies which have experienced > 20% cycle time reduction either lie in Level 3 or 4. P. 17

18 Maturity Matters: Maturity Impact on ROI ROI is not widely measure for BI projects with 67% of all companies reporting that they don t know or don t measure ROI. Level 1 and Level 2 companies are less like to measure ROI than Level 3 and Level 4 companies. Moreover, Level 4 companies report an ROI that is 55% higher than Level 1 companies. Whether you measure value as customer satisfaction, ROI or cycle time reduction, Level 3 and 4 companies outperform Level 1 and 2 companies. 78% of Low Maturity companies and 58% of High Maturity Companies do not know or do not measure ROI % of companies that do not measure or do not know the ROI of BI Projects Average ROI of Level 4 companies is 55% higher than Level 1 companies Average ROI of companies that measure ROI for BI Projects 78% 58% 20% +55% 20% 14% 9% Levels 1 and 2 Levels 3 and 4 Level 1 Level 2 Level 3 Level 4 P. 18

19 Maturity Matters: Project Types Strategic BI Projects are ones whose objective are to gain competitive advantage or major innovation. Survey results reveal that the higher your level of maturity, the more Strategic BI projects you will undertake. % of overall responses 38% of BI project for Level 4 companies are Strategic % of Strategic BI Project, by Maturity Level 38% Strategic Value Informational Transactional 19% 23% 24% Infrastructure Level 1 Level 2 Level 3 Level 4 P. 19

20 Key Findings: Impacts on BI Success Several trends emerged through comparisons of low value performers to top performers. The list of items below represents the key findings that relate to all levels of the BI/Analytics maturity model. Key Findings A long-term BI strategy linked to the overall business strategy drives value in the solution A formal BI Center of Excellence (COE) exists where BI roles, accountabilities and responsibilities well defined and consistently applied across the company BI master data management efforts aligned with overall Enterprise Data Management (EDM) efforts and business BI initiatives BI Data model is well documented and leveraged Uniform data definitions, technical naming standards are very well defined and consistently applied. SAP BI standard business content is leveraged Policies and procedures for BI design, development and operations are well defined 7 A layered architecture is implemented. One logical enterprise BI instance deployed 8 SAP source system fields are used as intended by SAP P. 20

21 1. A long-term BI strategy is critical to success The survey found that on the whole, business were not overly involved in BI business cases and ownership. Only 30% of the time did the business take the leadership. There also was not a clear differentiation based on maturity. The real differentiator is the development, usage and adherence to a BI strategy. While only 28% of respondents have BI strategies, these are heavily weighted to level 3 and 4 maturity. Companies that are mature in BI and analytics recognize that a BI and analytics program must be aligned to the overall business objectives and IT portfolio. This is critical for IT to aligning technology and build flexible solutions. 30% of companies have the Business define the BI project and own the results; 56% of those companies are Level 3 or 4 % of companies, by maturity 41% of companies have a developed longterm BI strategy guiding their efforts; 79% of these companies are Level 3 or 4 % of companies, by maturity 56% 79% 44% 21% Level 1 and 2 Companies Level 3 and 4 Companies Level 1 and 2 Companies Level 3 and 4 Companies P. 21

22 2. A Center of Excellence adds stability and consistency The survey found that mature companies deploy BI Centers of Excellence. Roles, accountabilities and competencies are well defined and followed. Training and knowledge management is still a challenge overall. Only 18% of companies responded as having robust knowledge, competency and training programs. These companies were heavily weighted toward Level 3 and 4 maturity. 28% of Companies utilize a BI COE ; 83% of these companies are Level 3 or Level 4 % of companies, by maturity 83% 18% of companies have well defined knowledge management and training programs ; 87% of these companies are Level 3 or Level 4 % of companies, by maturity 87% 17% 13% Level 1 and 2 Companies Level 3 and 4 Companies Level 1 and 2 Companies Level 3 and 4 Companies P. 22

23 3. BI Master Data alignment with enterprise master data The survey found that companies are beginning to understand the critical nature of BI master data even at lower maturity levels. 46% of companies have BI master data management efforts that align with overall EDM and business initiatives, and master data is managed where possible at the source. The alignment trend is most prevalent with level 3 and level 4 companies. 45% of companies align BI master data efforts to overall EDM and business initiatives % of respondents 100% of Level 4 companies align BI master data efforts to overall EDM and business initiatives % of companies, by maturity level BI Master Data Standards aligned to overall EDM and business Initiatives. Owned by IT 25% BI Master Data Standards aligned to overall EDM and business Initiatives. Owned by IT 20% 71% 100% No Process or BI Master Data Standards 17% BI Master Data Standards managed by IT 13% Few BI Master Data Standards 24% 0% 21% Level 1 Level 2 Level 3 Level 4 P. 23

24 4. The importance of a documented data model and meta-data The survey found that as a whole, companies are not documenting the data model and leveraging meta-data. Only 29% of companies leverage meta-data and document the data model. These are considered keys to flexibility, data re-use, reduced cycle time and a single version of the truth. Level 3 and 4 companies are more likely to follow this best practice. 29% of companies document the data model and leverage BI meta-data % of respondents 100% of Level 4 companies document the data model and leverage BI meta-data % of companies, by maturity level BI data modeling aligned with key business initiatives; meta-data is leveraged when possible 17% BI data modeling aligned with key business initiatives; meta-data is part of a common data model 12% 46% 100% BI data modeling is on a project basis; BI meta-data is partially leveraged 33% No comprehensive BI data model exists; BI meta-data not leveraged 21% BI data modeling is on a project basis; BI meta-data is not leveraged 17% 0% 7% Level 1 Level 2 Level 3 Level 4 P. 24

25 5. Uniform naming standards, processes and use of standard content are critical components The survey found that there is a clear correlation between uniform naming standards, processes and the use of standard content and the BI/Analytics organization's maturity. Standards are critical in enabling development leverage, increasing quality, reducing redundancy and development cycle time. Mature companies understand the relationship between standards, efficiency, and quality and implement this best practice. 47% of companies apply common definitions and naming standards % of respondents 100% of Level 4 companies apply common definitions and naming standards % of companies, by maturity level Common definitions and naming standards are consistently applied across the organization. Standard objects are leveraged only in certain areas 25% Common definitions, naming standards and standard objects are consistently leveraged across the organization. 22% 74% 100% Common definitions and naming standards exist but not consistently applied 29% Common data definitions and naming standards do not exist 12% Some common definitions and naming standards exist but do not support a common data model; standard objects are not being leveraged 12% 0% 21% Level 1 Level 2 Level 3 Level 4 P. 25

26 6. Well defined policies and procedures for BI design, development and operations The survey found that as a whole, companies are still struggling with operating under a common set of policies and procedures. Only 39% of companies apply a consistent set of policies and procedures for BI design, development and operations. Level 3 and 4 companies follow this best practice. 39% of companies apply consistent policies and procedures for their BI solution # of respondents with naming standards aligned - 32 # of overall respondents % of Level 4 apply consistent policies and procedures for their BI solution % of companies, by maturity level Policies and procedures exist and are applied consistently; they do not support a common data model 12% Policies and procedures are consistently applied that support a common data model and leveraged development 27% 61% 100% Policies and procedures exist but do not support a common data model or leveraged development 25% Policies and procedures are not well defined or followed 14% Some policies and procedures exist but are incomplete and inconsistently applied 22% 0% 14% Level 1 Level 2 Level 3 Level 4 P. 26

27 7. A logical BI instance with a layered architecture The survey found that on the whole, businesses are moving toward a single logical BI instance with a best practices layered architecture that includes a data staging layer, data warehouse layer, data mart layer, reporting layer and presentation layer. The actual terminology varies by client, but the fundamentals of the architecture are the same. Data is loaded a single time in raw form with minimal transformation. It is then reused multiple time as it transforms into information. The differentiator between companies is significant. While less than 28% of level 1 and 2 companies follow these best practices, they are significant enablers for level 3 and 4 companies. These practices are critical for building a flexible solution. 49% of companies have a single logical BI instance; 67% of these companies are Level 3 or 4 % of respondents, by maturity level 51% of companies deploy a layered BI architecture; 77% of these companies are Level 3 or 4 % of respondents, by maturity level 67% 77% 27% 21% Level 1 and 2 Companies Level 3 and 4 Companies Level 1 and 2 Companies Level 3 and 4 Companies P. 27

28 8. SAP source system fields are used as intended by SAP The survey found that as a whole, companies are improving significantly in the standard use of SAP fields and the use of SAP Extractors and extraction tools. 57% of companies follow best practices. Companies in Level 2, 3 and 4 tend to follow this best practice 57% of companies use SAP fields and extractors as intended % of respondents 100% of Level 4 use SAP fields and extractors as intended % of companies, by maturity level Data is captured in underlying OLTP systems consistently; heavier reliance on generic extractors than necessary 8% Data is captured in underlying OLTP systems inconsistently; SAP standard and generic extractors are used 18% Data is captured in underlying OLTP systems consistently; standard extractors are used for most data extractions with generic extractors for additional data needs 49% 0% 45% 76% 100% Data is captured in underlying OLTP systems inconsistently; customization of extractors required to normalize data 6% Custom extracts are required because of significant customization with underlying system 19% Level 1 Level 2 Level 3 Level 4 P. 28

29 Study Conclusions and Recommendations Conclusions Companies are clearly moving up the BI/Analytics maturity model, but very few excel across all dimensions. Therefore, many companies may be leaving value on the table when they undertake business intelligence initiatives BI/Analytics maturity directly impacts an company s time-to-value. A full 40% of Level 4 companies experience a greater than 20% cycle time reduction to deliver compared to 16% Level 3 companies; In fact, Level 1 and Level 2 report realizing no cycle time reductions Most companies surveyed did not have a long-term BI/Analytics strategy in place, but for those who did nearly 3/4 fall into the highest levels of BI/Analytics maturity Most companies surveyed also did not have a robust knowledge, competency and training programs but for those who did nearly all the companies have reach levels 3 and 4 of BI/Analytics maturity Master data is becoming an even greater area of focus with nearly half all companies surveyed aligning their BI master data efforts with existing EDM and other business initiatives Key to flexibility, data re-use, reduced cycle time and providing a single version of the truth is the documentation and active management of the Data Model and Meta-Data. Level 3 and 4 companies have adopted this best practice Almost half of the companies survey have common definitions, naming standards, policies and procedures while 3/4 of level 3 and all of level 4 companies have these standards in place. Businesses are moving toward a single logical BI instance with a best practices layered architecture. This differentiator is significant with only 1/ 4 of level 1 and 2 companies following this best practice while they are significant enablers for level 3 and 4 companies. Recommendations Use these survey results to drive improvements in your companies current approach to business intelligence and analytics Develop a plan to incorporate a mature approach to BI/Analytics into the entire project lifecycle, including business case development, project management and governance, process design, reporting, configuration, and assessment Incorporate best practices and lessons learned from those companies who are highly successful at extracting and achieving value Other surveys that may be of interest to companies participating in the BI/Analytics Survey include: Enterprise Data Management BI/Analytics Benchmarking Access to learn more about our other survey options P. 29

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