Introduction to Business Intelligence

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1 Introduction to Business Intelligence Urban Ask Centrum för Affärssystem Gruppen för Ekonomistyrning Agenda I t t i BI Interest in BI Definitions Drivers Vendors and market Some predictions 1

2 Increasing interest in the BI area 2

3 BI from a single dimension to multiple dimensions definitions Business Intelligence (BI) as process Data is gathered and stored, transformed to information by analysis and then to knowledge to support decisions Business Intelligence (BI) as product BI is relevant information and knowledge that enables organizations to predict the behavior of their internal and external environment with a degree of certainty Business Intelligence (BI) as product and process A combination of the above Business Intelligence (BI) as a set of technologies Technology used in the BI processes that create the product BI Source: Shollo & Kautz, 2010 Gartner derived definitions Business Intelligence (BI) is a broad term BI is a business management term which refers to: applications, technologies and infrastructure and best practices which are used to gather, provide access to, and analyze data and information about company operations. BI is analysis of information which enable Decision Making Performance Management and Control BI is a business development issue Integration of IS/IT and business processes 3

4 The aim of BI is to help you to build relevant knowledge for decision making and action Action Data Information Knowledge Decision What is happening? Scorecards and Dashboards What happened? Reporting Why did it happen? Analytics What will happen? Forecasting What do I want to happen? Planning, Budgeting, Consolidation Source: Microsoft PPS 4

5 Example of architecture for BI WEB Portal and Scorecard Access Layer Reporting Analysis Data Warehouse Extract, Transform and Load Internal Data Sources External Data Sources Data Layer BI is not only technology and applications Business Centric Business Strategy Performance Management BI Competence Center IT Centric People Process Analytic Applications - Strategy driven - Analyst driven - Process driven BI Platforms Information Management Infrastructure Source: Gartner,

6 Driving Forces of BI 1. Change of profession and more users of BI The role of controllers are changing More users of Business Intelligence increases demand for knowledge 2. Business Intelligence fragmentation ERP and/or BI alone is not the solution Integration of the subject area and IT Holistic approaches to business control Corporate Performance Management 3. Strategic Performance Management Emerging Strategy Execution fails Balanced Scorecard and Management Accounting innovations are becoming widely used in organizations 4. Technology drives development Technology development as such Vendors drive technology The Controllers focus must change Has to manage time... Cost Control and Follow-up Control and Value Creation A continuous shift towards value creation Book-keeping Reporting Follow-up/ Control Decision support Business Development Strategy Source: Presentation M Orsucci, Coop Norden,

7 Increasing number of users Source: TDWI, 2010 More users of BI Improving organizations by yproviding business insights to all employees leading to better, faster, more relevant decisions Source: Microsoft Performance Point Server,

8 Different users have different needs Increas sing Analytics & User Intera activity Advanced Analysis & Ad Hoc OLAP Analysis Scorecards & Dashboards Enterprise Reporting Alerting & Proactive Notification Ad Hoc Analysis Predictive Analysis Data Mining Slice & Dice Investigative Analysis Root Cause Determination Page-perfect Operational Reporting Pixel-perfect Business Reporting Print-perfect Statements & Invoices Operational Dashboards Dynamic Scorecards Metrics Management Massive Report Distribution Exception-based Alerts ANALYSIS REPORTING MONITORING Increasing Number & Range of Users Information Analysts Business Managers All Workers Extranets Customers Source: MicroStrategy BI Fragmentation Companies are standardizing on fewer vendors Average number of BI tools in the enterprise is ~13 2 out of 3 companies plan to move to enterprise BI solutions within 3 years 8

9 Strategy Execution is problematic The Vision Barrier Only 5% of the work force understands the strategy The People Barrier Only 25% of managers have incentives linked to strategy 9 of 10 companies fail to execute strategy The Management Barrier 85% of executive teams spend less than one hour per month discussing strategy 60% of organization don t link budgets to strategy The Resource Barrier Today s Management Systems Were Designed to Meet The Needs of Stable Industrial Organizations That Were Changing Incrementally You Can t Manage Strategy With a System Designed for Tactics Source: Presentation av David Norton, 1999:The Balanced Scorecard: Translating Strategy into Action Strategy - important input for performance management Vision Perspective Measure Strategy Objective From business model to data model 9

10 Initiatives Take Action Professional Budgeting Planner Plan Putting BI into the processes Do Operational Modules Portal and Scorecard Communicate Interpret Management by Exception - Attention Directing Attention Analyze Portal and Scorecard Strategy Maps and Documents Cube Analysis 10

11 BI = technology driven development Source: Gartner Group Technology drives BI Service-Oriented Architecture (SOA) ( ) The standardization of IT architectures across the organization and the centralization of software platforms amplify the benefits of Web-based applications. Software as a Service (SaaS) Business units that lack strong IT infrastructures should consider a SaaS model where data warehousing and data management are outsourced. WEB GUI for presentation. Open Source BI Open Source BI Sharing of technology, applications and tools over the WEB that you can use for free to build you own BI solutions. Web 2.0 AJAX Rich Internet Applications gives users a simple front end that combines the best of both browser and desktop-based GUI technology. 11

12 Web based technology drive BI Source: Information Builders, 2006 Importance of emerging technologies Source: Howson, 2008 n=513 respondents 12

13 The vendors and their focus Mega vendors Integration ERP and BI BI as add on to ERP or BI where ever you are Pure play vendors Integration of the BI solution to cover more Complementing with new functionality and/or technology Unstructured data text analysis Niche vendors Exploiting competitive advantage from functionality and/or technology e.g. in-memory analytics Moving to cover more Third party solutions and candidates for takeover The market and the vendors BI Platforms Vendor Revenue 2009 Market share 2009 Growth 2008 Growth 2009 SAP % % -0.2% IBM % 0.0% 16.0% SAS Institute % 6.1% 2.7% Microsoft % 20.1% 11.5% Oracle % 48.8% 2.3% Source: Gartner,

14 Source: Gartner, 2011 Predicts of the BI area By 2012, business units will be responsible for at least 40% of the BI budget Packaged analytic applications on premise ones and SaaS - will shift power from IT-organizations to business units Through 2012, more than 35% of the top global companies will fail to make insightful decisions on significant changes in their business The financial crisis will reveal which companies that have sound information infrastructure By 2010, 20% of organizations will have an industry specific analytic application delivered via SaaS as a standard component in their BI-solution Collaborative decision making will emerge as a new product category combining social software with the BI platform Source: Gartner,

15 Predicts of the BI area - cont.d Traditional BI stack versus Data Discovery Data discovery tools based on in-memory analytics is delivered by most vendors Complement for business users IT still seem to prefer a single BI platform Shift from measurement to analysis, forecasting and optimization Large vendors are integrating statistical functions and simulation, e.g. IBM Cognos and SAS Institute Consumerization of BI Mobile solutions with intuitive and fun interfaces, e.g. ipad Easier for business users to develop mash ups (WEB 2.0) Improved decision making continues to be a strong driver for investment in BI Source: Gartner, 2011 Characteristics of the BI area Rational man The more information the better decision i making Too a large extent, the BI area is supply side driven Vendors drive development of BI solutions often far ahead of regular users Analyst firms are very influential and control what is going to be done (creating bandwagon-effects) Many consulting firms wants a piece of the cake Mega vendors have their R&D activities in North America Top down management models have impact on packaged BI-solutions and use of BI Demo cases are normally not adapted to other management models People put their faith in the new system All our problems will be solved, when the new BI-system is being implemented 15

16 Take away Technology and infrastructure is in place Supply side driven area with vendors investing in technology Best practice experience is pre packaged Some barriers for pervasive use of BI People Lack of user adoption Little cooperation between the business and IT people Processes Unclear business requirements and mis-alignment of BI and business Integration issues Business areas and decentralization Strategic alignment of business and BI application of BI New and old technology coexists 16

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