PREPARING YOUR ORGANIZATION FOR BUSINESS INTELLIGENCE SUCCESS

Transcription

1 PREPARING YOUR ORGANIZATION FOR BUSINESS INTELLIGENCE SUCCESS by

2 Executive Overview Implementing business intelligence (BI), like implementing any business system or application, requires process changes. This white paper outlines a few key actions your organization can take to better prepare for BI, along with one to avoid. These are not intended as step-by-step instructions for starting a BI project. Instead, consider them best practice guidelines for setting your organization up for success. Every BI project involves completing tasks to ensure that the system works as required and the right data is available, but the most important part of the implementation is helping people to change their way of thinking and allowing time for cultural shifts to take hold throughout the organization. Unless these necessary cultural shifts take root, the project will not achieve the desired results. The most important part of the (BI) implementation is helping people to change {their way of thinking. It s important that organizations don t jump right into a focus on software and technology. IT should be at the table, but the organization should not necessarily consider BI an IT project. The project will be far more fruitful if it starts with the business principles and objectives first. To ensure that the organization buys into the project s objectives, a BI implementation should have the full, visible support of top leadership. While IT will be a important part of the project team, the movers and drivers of the project need to come from line-of-business areas. Leadership and line-of-business support have proven to be strong predictors of project goal achievement. BI implementations can sometimes drag on for months without achieving much because the organization doesn t consider the business objectives first. Taking the time to prepare for a BI project sets the organization up for positive results. It s relatively easy to define the traditional task-oriented steps to manage a BI implementation, but organizations sometimes need help with defining and tracking the soft actions that lead to project success. There are five key areas to focus on, including: Defining the goals for BI Developing a performance-driven culture Forming the team Establishing data governance Avoiding organization-wide BI projects This paper covers each of these areas in-depth in subsequent sections. Preparing your Organization for Business Intelligence Success >> 1

3 Defining the Goals for BI for the Organization One of the biggest benefits of BI is the ability to make better business decisions faster, but this is often difficult to {quantify. Unless you know what success looks like, you will never know if you ve achieved it. As soon as your organization begins to consider a BI project, you should begin working on defining the project goals in order to measure accomplishments. > Metrics should be tied to goals To ensure a successful project, you should start with the organizational goals and objectives. These are the high-level goals to which all others tie back. This also provides an opportunity to involve upper-level management in the process. Once organizational goals have been defined, this leads the way to defining departmental and eventually individual goals and metrics. The fine detail of individual metrics doesn t need to be defined right away. Having the organizational goals in place first allows metrics to be tied back to them later in the project ultimately ensuring the entire organization (especially the project team) is working toward the same goals. Many organizations find it helpful to work with an experienced BI consultant to map out the project and to help define the goals and metrics. The fresh eyes of an outsider can often see what you can t, and the expertise he or she brings to the table can help you define your objectives more efficiently. > Create the business case Once you have a clear understanding of the business objectives for the BI project, you can make a case for justifying the investment. Whether you need to present your case to a C-level executive or the Board of Directors, you must be able to state clearly what benefits the organization will receive as a result of the investment of time and resources. One of the biggest benefits of BI is the ability to make better business decisions faster, but this is often difficult to quantify. While everyone may agree that making decisions based on facts is clearly better than relying on rules of thumb or guesses, putting a dollar figure on that impact has eluded many organizations. Your BI implementation consultant or your prospective BI supplier can often provide references and examples to help you make your case. Look for information from industry analysts or other credible independent sources to supplement case studies provided by vendors. You may want to research other organizations in similar industries, or peers such as customers and suppliers. If these types of organizations have undertaken similar projects, you can show concrete examples of the benefits they achieved and the improved processes they have put into place. Another way to make the business case is to look for low-hanging fruit that Preparing your Organization for Business Intelligence Success >> 2

4 Whatever your industry, there is certain to be a problem that you can identify that will quickly {prove the value of BI. can yield quick results and direct bottom-line impact. For example, in retail sales, you may be able to quantify the impact of inappropriate discounting by cashiers or sales representatives. Business intelligence analysis can show the actual financial impact of such discounting and provide the necessary facts to support a revised discount policy that immediately impacts the company s revenue. In manufacturing, you might be able to prove that it is more profitable to use idle equipment that is less efficient than the specified machine to complete an order in backlog than it is to let the equipment remain idle and the order to remain unshipped until the preferred equipment is free. This could result in increased total manufacturing output, improved cash flow, better customer satisfaction or a combination of all of these factors. BI could allow you to make the decision based on facts, not guesswork. In service industries, you could calculate the value of reduced customer credits, higher penalty payments or reductions in complimentary services that the organization incurs when it misses project timelines. Proving that reducing the number of these incidents would save money and improve the profitability of projects is simple, but analyzing the reasons for these occurrences is a job for business intelligence. Whatever your industry, there is certain to be a problem that you can identify that will quickly prove the value of BI. Part of your BI justification should be identifying the specific problem you intend to tackle first, and quantifying the near-term ROI that you expect to achieve using improvements identified using the BI tool. Preparing your Organization for Business Intelligence Success >> 3

5 Developing a Performance-Driven Culture A performance-driven culture never rests, but consistently strives to meet and achieve targets. This type of culture must start at the top, with management that sets reasonable, achievable goals for the organization and the individuals that comprise the organization. The goals must be clearly measurable, agreed to by all parties, and bounded by time so that success is recognizable. Goals that derive directly from the organization s mission or strategy are the easiest for the organization to understand {and meet. > Tie goals to the company s strategy Goals that derive directly from the organization s mission or strategy are the easiest for the organization to understand and meet. Tying goals to the strategy helps prevent conflict when departmental goals don t mesh and aids in decision making when conflicts do arise. It also helps to ensure consistent measurement of achievements. A performance-driven culture won t work if goals and metrics don t apply to everyone in the organization. Individuals must be accountable for meeting their objectives, since individual and overall performance improves when goals are clearly visible. The old adage that you can t improve what you don t measure is true. For this reason, it is important that all goals are consistent and that they tie to overall strategy. Everybody benefits from seeing his or her individual goals and from understanding how the goals affect the organization s success. > Embrace agile thinking Many companies set long-term goals that won t show results quickly, and they stick to these goals regardless of changes in market conditions or other economic or environmental factors. These organizations tend to have difficulty achieving and maintaining a performance-driven culture because goals and metrics quickly become outdated but fail to change. Agile thinking, on the other hand, has proven results and enables companies to continuously evaluate the best course of action for current conditions. This doesn t mean that agile companies jump aimlessly from project to project without results. On the contrary, successful companies pause frequently to assess current conditions and to consciously decide on the next course of action to lead them in the direction of their objectives. Agile companies tend to have performance-driven cultures that achieve better results than more traditional organizational cultures. For an overview on instilling agile thinking into your organization and your projects, read Agile Principles Unleashed: Proven Approaches for Achieving Real Productivity Gains In Any Organization by Jamie Lynn Cooke. Cooke emphasizes that agile thinking provides benefits everywhere within an organization (not just in project management), and requires only flexible thinking and an openness to change. Preparing your Organization for Business Intelligence Success >> 4

6 Forming the Team As you proceed with the project, give considerable thought to the members of your project team. Look for individuals who are adaptable and eager to try new ideas because these people are likely to be naturally agile thinkers. You don t need to fill your project team with highly skilled technical people. Most team members, with the exception of the IT representative, will need only basic technical skills. The most important characteristic for team members is organizational clout, but not necessarily a high level position or an important title. The clout needed for successful implementations means access to resources, access to the leadership team, and the ability to influence members of the organization even without having direct managerial responsibilities. Look for individuals who are adaptable and eager to try new ideas because, these people are likely to {be naturally agile thinkers. > Cross-organizational representation You will need representation from many parts of the organization to ensure your project s success. A wide variety of skills and viewpoints helps ensure that those close to the project don t view it as an IT initiative, or the responsibility of any other single department. The ideal team includes agile thinkers from all organizational levels and departments, including: IT representative The IT representative should be a database administrator or someone with a deep knowledge of the organization s enterprise and/or financial applications which will most likely be the source of the data for your BI tool. Department of focus You will require one or more people from the organizational areas that the implementation will be focusing on first. So, if you will be targeting a manufacturing issue first, look for agile thinkers in manufacturing. If a sales issue is your top priority, choose an individual who understands the company s sales processes, and so on. Mid-level operational managers from the targeted department are ideal candidates. Administrative support Since the implementation project requires meetings, minutes and reports, access to administrative support may be invaluable. The administrative assistant to the C-level executive sponsor of the project is an ideal choice. A data governance champion This person is responsible for defining and enforcing data input processes and formats for all the organization s source systems. Consistent formatting will improve the likelihood of the project s success, whereas inconsistent input will doom the project to failure or at least slow it down considerably. Data governance is usually not an IT role, and these detail-oriented individuals often come from the accounting team or a QA specialist. The next section discusses data governance in more detail. Preparing your Organization for Business Intelligence Success >> 5

7 Establishing Data Governance Breaking a big problem into a series of small, manageable tasks is the most efficient means of managing a big {project or problem. Data governance is a system of decision rights and accountabilities for managing, controlling, using and inputting data and helps to identify responsible parties if adverse events occur. Strong data governance helps reduce risk by ensuring compliance with regulatory mandates, enables better planning and decisions, and improves data security. In its essence, data governance is the ongoing process of ensuring an organization s data is accurate. It is required for all business systems, not just for BI projects, because proper governance will improve the operation of all the organization s business systems. Individuals in charge of data governance are responsible for risk management related to data handling, and they help to ensure consistency of data policies, business process management, data quality and data management. Data governance strives to control the business processes and data handling within an organization. > Document known issues, but be alert for more The first task for those responsible for data governance is to document any known issues and to generate plans to resolve the issues. Some required changes may not become apparent until the project is well underway, so the ongoing representation from the data governance team is critical. Some organizations may discover that a key information source is an Excel spreadsheet that several people can access and update. Occasionally, users may accidentally overwrite the original document, and in many cases, there are no audit trails for changes. In this type of case, the data governance team s responsibility is to define and enforce a new process to transfer the information into a more controlled application so that the information is protected and trustworthy. Experienced BI or data governance consultants from outside the organization can help set up governance processes and help with any business process redesigns that prove necessary to ensure data integrity and accuracy. Avoiding Organization-Wide BI Projects > Don t try to solve the entire organization s BI issues at once Breaking a big problem into a series of small, manageable tasks is the most efficient means of managing a big project or problem. Consider emulating the lean concept of small batches so that you focus on solving one problem at a time. If you try to define details of the entire BI rollout up front, you will waste time and effort rehashing earlier decisions as each phase begins. Consider each phase as a separate, individual project with its own objectives and financial justifications. Preparing your Organization for Business Intelligence Success >> 6

8 BI can help any organization to meet its goals and improve results, but BI projects require teamwork, management {support and careful planning. > Financial resources Defining the project too broadly up front may also require a larger monetary investment than management is comfortable making without seeing some early results. Use the proof points from your early successes to justify continuing the BI rollout and supporting the justification for investing more resources into BI. > Don t let project time lines drag on A broadly defined project will often extend over a long period of time, and can lead to organizational burnout. People may feel frustrated that the project doesn t provide interim successes and results, since it will be unlikely to meet its broadly defined objectives until or near the end of, the project. Team members may get bored or leave the company before the project is completed, causing disruption and delays. To combat this, you can define a series of smaller, clearly defined projects that offer quick hits of success and prove that BI has value to the organization. > Learn from early projects As you complete each individual project, be sure to evaluate the lessons learned. These lessons will help you to make subsequent projects more effective and to provide better results. You will understand the achievable benefits better, and your team will function more cohesively. You will know how to justify projects more precisely and to create better project plans. Conclusion BI can help any organization to meet its goals and improve results, but BI projects require teamwork, management support and careful planning. BI works best in organizations that are goal-oriented, performance-driven and focused on data governance and quality. By taking the time to focus on these business principles and culture shifts needed to adopt BI, the entire organization is more likely to embrace the project and see results Park Dr., Traverse City, MI Phone: Fax: Copyright 2013 Naveego, All rights reserved. Preparing your Organization for Business Intelligence Success >> 7