1 Northrop Grumman White Paper Business Analytics for Better Government Authors: Patrick Elder and Thomas Naphor April 18, 2012 Northrop Grumman Corporation Information Systems Sector 7575 Colshire Drive McLean, VA
2 Introduction Business analytics (BA) is a subset of Business intelligence (BI) and is defined differently by different organizations. For many organizations, BA is simply an enterprise reporting system. Other organizations incorporate scorecards and performance metrics to help meet strategic goals. Still others use complex data models and predictive analytics to make proactive business decisions to give the organization a competitive advantage. Northrop Grumman sees business analytics as all of these things and as a cornerstone of our customers efforts to achieve the goals set forth in their strategic plans. Analytics adoption within the private sector began over a decade ago. Findings reflecting the potential benefits of a successful implementation across a variety of industries are undeniable. According to Gartner research, BI has become a necessity rather than a competitive edge. Northrop Grumman sees business analytics as necessary table stakes and recognizes that in order for our federal customers to operate successfully under ever-increasing budget constraints, they must leverage BA to efficiently use funds and increase transparency of spending to the public, while maintaining progressive quality of citizen services. For example, for many skilled technical and professional positions, federal agencies need to hire from the same pool of talent as private industries, if not one smaller. In addition, business analytics can give organizations the ability to mobilize its workforce in the event of disaster or need for surge support. Through business analytics for talent management, data mining and predictive analysis can and should be used by federal agencies to make better decisions around acquisition, retention, development, and succession. With the data most customers already collect, our Northrop Grumman Analytics Team creates data models that give our customers a higher probability of making the best possible decisions about talent, workforce and logistical planning. Business Intelligence in the Federal Market Today, use of Analytics within the federal marketplace to advance service delivery in areas like human resources, recruitment and competency training is almost non-existent. Several agencies have enterprise reporting solutions at varying levels of deployment, but few use enterprise reporting or have fully matured data warehouses that ensure data integrity offering a true, single authoritative source for advanced information management. To handle administrative activities across the enterprise, very few agencies make use of actionable, automated scorecards, performance metrics, or predictive analysis. This is not surprising since federal organizations are often cautious adopters of new technology and for good reason. The Federal Government is often best suited to make use of an established product and well defined industry best practices. Federal customers do not need to take risks that private companies do to gain competitive advantage. Instead, government agencies mitigate risks associated with breakthrough technology by waiting to adopt proven best practices. However, Northrop Grumman recommends that the Federal Government be proactive in the implementation of business analytics. Given the current economic environment and proven maturity of BA in the private sector, federal organizations will increasingly need to leverage business analytics. Doing so will help drive operating excellence by maximizing cost efficiency and market positioning for attracting and retaining top talent. Business Analytics for Better Government 2
3 Business Transformation through Business Analytics Northrop Grumman is well positioned to help its federal customers complete a business transformation, moving toward data driven decision making. By developing analytics that give insight into the data that is currently being collected, federal customers can make better informed business decisions. Those well informed decisions can lead to greater cost savings and tighter policy compliance. Analytics give our customers the ability to use their data in ways they never thought possible. By developing data models for various retention, attraction and training scenarios, we leverage our customers data to help them plan for similar scenarios in the future. We use non-relational data tools, such as our Open Source Intelligence Exploration toolset. We provide customers the ability to view events that are likely to occur in the near future and plan accordingly. Our customers can leverage our Analytics offerings in mobile applications for access to their data anywhere, making Analytics a powerful on-the-go tool for recruiters, event planners and committee members. Figure 1: Northrop Grumman's Building Blocks for Business Transformation Northrop Grumman s Analytics Solutions Northrop Grumman works with federal customers to develop robust analytics, metrics, reports and dashboards that provide actionable insight for building operating advantage. Our Information Systems Sector specializes in providing a wide variety of big data analytics solutions that support many federal market customer needs. In addition to our experience in federal enterprise and decision support solutions, our Health Solutions division has developed robust data mining and predictive analysis solutions that help improve mission support needs for Federal customers, including Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS), and Centers for Disease Control and Prevention (CDC). The following are a few success stories from Northrop Grumman s Business Analytics solutions portfolio. Business Analytics for Better Government 3
4 Intelligence Community (IC) Agency Northrop Grumman has worked and continues to work as one IC agency s Human Capital Management System implementation team. In 2005, the agency decided it needed to get more from its data. The successful implementation and deployment of the Human Capital Management solution portfolio produced a significant increase in queries and data requests, revealing the need for an enterprise reporting capability. The agency selected Business Objects as the enterprise analytics tool, and Northrop Grumman took the lead in the developing universes, web services and the first integrated talent management dashboard solution to feature human capital data from a variety of business applications at the agency. These included some deployment pipeline staffing reports, workforce demographics, training, foreign language competencies, and recruitment dashboards that have greatly improved the business process. In addition, the initiative to develop Recruitment Analytics assisted the development and measured the progress of an improved talent acquisition process. To date, Northrop Grumman has engineered their human capital data warehouse to better meet data requests for end users and outside systems alike to continuously improve service delivery. Department of Homeland Security (DHS) The cabinet-level DHS has undertaken a massive business transformation effort to implement enterprise solutions, where possible, for common Human Capital systems, operations and data across over 22 Legacy Agency components. Northrop Grumman has been intimately involved in this effort, providing expert technical and business guidance for the Human Capital Business Systems division. Business analytics relies on a sound, highly scalable infrastructure, including, and especially, data quality management. Northrop Grumman is guiding DHS to provide an end-to-end, integrated Human Capital portfolio solution that builds upon an enterprise segment architecture that will include data warehousing, data management, governance, and business intelligence technologies to drive better Human Capital results. Northrop Grumman supported the DHS HR Analytics Proof of Concept effort and is continuing to work with DHS to form a long term target strategy for implementing an enterprise product Business Analytics strategy. DHS has an existing investment in market leading COTS Human Resource Analytics products and Northrop Grumman is assisting in tailoring this solution to align to DHS specific Human Capital mission goals and objectives. Health IT Solutions Northrop Grumman s Health IT Solutions has developed and continues to enhance a Health Analytics Center of Excellence that includes a suite of tools that perform data mining and predictive analysis for the CDC and the CMS. The Improving Health Outcomes initiative analyzes outcomes and costs of chronic disease for providers, populations and communities. This has been a useful tool for customers in shaping health policies. Our Health Analytics portfolio has enabled our customers to increase rapid response of health services for at risk populations based on disease threat indicators. The Health Analytics Predictive Models allowed health care providers to customize a child s immunization or medications based on predictive health analytics using family medical history and risk/exposure assessments. Business Analytics for Better Government 4
5 Northrop Grumman IT Solutions Northrop Grumman currently uses analytics internally to improve its business processes. Gartner recently conducted a maturity assessment of our internal Business Analytics system. Gartner found that Northrop Grumman faced many of the same challenges internally that its customers do in implementing analytics, such as user acceptance and creating an analytic culture. We used a hybrid implementation of two analytics tools to meet the large variety of needs of our information consumers. Through deployment of tools and technologies that can reach a larger population of users, Northrop Grumman is in a better position to mature its analytics to predictive analysis and automated business processes. Our Vision for Better Government through Business Analytics Today, many companies and most federal agencies view Analytics tools primarily as reporting tools. They see the tools as nothing more than a powerful and flexible way to visualize and distribute data through their organization or to their partners, suppliers, employees, and customers. That view is but a starting point for business analytics, as the ability within the technology is much more powerful; market trends and analyst views point to these areas as becoming a critical operation of business very soon. Just two decades ago, enterprise resource planning (ERP) systems were considered cutting edge technology for companies to build into their operational structure. In today s business climate, if an organization does not have an ERP to help monitor and forecast business health and track business results, they are at an extreme disadvantage and are likely to falter against the competition. Analysis, and not just reports, is fast approaching the ubiquity that will make it a necessity in order to maintain a market presence. Leading analysts envision the future of business analytics as building, Business Analytics for Better Government 5
6 measuring and improving business processes around the results of comprehensive data analysis. 1 Unfortunately, creating, integrating and effectively deploying a business analytics solution for an organization is not like flipping a switch. Data models, however, are a form of analysis that can produce noticeable results in a relatively short period of time. In some cases, a data warehouse can jump start an analytics solution, but it is not required. A successful implementation requires (like any Analytics effort) collective support from the entire organization. Functional experts and the business owners must be engaged in order to ensure that performance metrics are properly defined and that factors that may impact it are identified. Technical experts must be involved in developing the data models for information that will ultimately be used to impact improved performance metrics. Leadership must be vested and actively participate in analytics to ensure there is a cultural buy in for the use of business analytics and that the results of the data models are applied to gain results. Northrop Grumman also assists customers in completing an Analytics maturity assessment. The assessment looks at things like user adoption, centralized data sources, and support in comparison to Northrop Grumman s and industry leaders best practices to determine the maturity of an organization s Analytics solution. The maturity assessment can also be a tool for organizations to develop a roadmap to reach robust, powerful business analytics. As a leading federal systems integrator, Northrop Grumman can help customers find a balance in maximizing best practices from private industry while tailoring the solution to meet the unique needs of government. Predictive data models are a key component to the Northrop Grumman Business Analytics package and allow our team to isolate high impact populations for a particular performance metric and maximize or minimize their impact on that metric, depending on whether their impact is positive or negative. For example, Northrop Grumman, in partnership with tier one technology providers, integrated a system that improves the detection and prevention of fraud and waste. Without leveraging such technology, the amount of claims data is far too large to have a human investigate each case. To examine a use case, set a control group by selecting a set of claims randomly and find about a 2 percent fraudulent claim rate. Using our predictive data modeling techniques, you identify claims that have a high probability of being fraudulent 1 Deep, Streaming Analytics: Premises, Promises & Perils. Marc Demarest, TDWI Solution Summit, September Figure 2: Our Business Analytics Maturity Model Business Analytics for Better Government 6
7 (based on fraudulent claim data from the past), and those that are most likely not fraudulent (statistically speaking). By focusing on the claims that have a high fraudulent probability, you increase the amount of fraudulent claims discovered prior to payout. By eliminating claims that have a very low probability of fraudulence, you decrease manpower costs by lowering the number of claims that need to be reviewed, thus increasing operational efficiencies. Market research has shown this method using data models can result in a five-fold increase in cost savings. Our approach: Robust Solutions, Incremental Dividends, Rapid Results Northrop Grumman recognizes that federal market customers have more complex, operational, and collaborative challenges than most private sector organizations. Our expertise in delivering human capital management systems combined with our experience in complying with federal operating requirements, policies and standards provides Northrop Grumman with unique insight into solving key operational challenges that are not typically factored within the private sector. As the government continues to increase its focus on controlling and reducing costs while maintaining quality citizen services for its taxpayers, leveraging investments in existing IT portfolio investments is and will remain a high priority for federal market customers. With our experience, knowledge and understanding of federal customer technology portfolios and cross-government operational initiatives, Northrop Grumman is well positioned to help the government maximize the benefits of existing technologies while blending innovative, standards-based technology to achieve greater efficiencies and drive operational Figure 3: Our Approach to Business Analytics improvement. Northrop Grumman not only assists federal customers in analyzing their current processes and systems, and stewards much of this legacy knowledge, but leads the way to realizing their vision by crafting a solid end-to-end technology solution that can address all areas of the business analytics technology framework. Business analytics is only as good as its input data, so we consult to consider available infrastructure and delivery options that can best meet customer business goals and objectives. In the analytics space, we subscribe to incremental, multi-threaded, Agile implementation methods that facilitate ongoing, immediate value, and maximize user collaboration and participation. Some of the key themes in our methods include: Concurrent rather than linear development. We have teams delivering value on all aspects of the complete solution. Using critical path and a variety of collaboration techniques to enhance overall communication, our data warehouse team builds the warehouse at the same time the data management team prepares the data management structures, while the business analytics developers prototype dashboards and reports to facilitate end-user adoption and requirements compliance. This enables our team to develop tangible artifacts for rapid user consumption while also improving Business Analytics for Better Government 7
8 the quality of the solution and enabling faster realization of operational benefits. Using shorter, more visible lifecycles, our approach lowers technical risk and saves our customers from excessive expenses that typically result from more traditional linear software development lifecycles. Leverage existing investments. In order to deliver the best value possible to our customers, we: o take inventory of the current infrastructure; o perform fit-gap analyses against requirements; o perform an analysis of alternatives; o research best practices to determine what will be the most cost-effective longterm solution; and o analyze data that is already being collected in both relational and unstructured formats. Thanks to private industry becoming early adopters of Business Intelligence and Analytics technology, our federal customers can avoid many of the early struggles these implementations had encountered along the way. Northrop Grumman s approach is built on industry best practices, interoperability, and rapidly evolving open standards which have already produced significant operational benefits and competitive advantage for organizations in the fields of marketing, finance and health. Our approach develops solutions that will meet the unique needs of our federal customers and delivers a product that places usable analytics in front of business decision makers using highly collaborative, Agile methods. Northrop Grumman partners with your organization to develop data marts for analytics and optimizes the model by using the first wave of analytics to produce more robust data marts. Technical upgrades are engineered to be transparent and mostly seamless to the user community, vastly eliminating business disruption, while enabling operational improvement. Once reporting analytics and data marts are institutionalized and widely adopted, our team will help your organization implement predictive analysis and data mining techniques to further advance your portfolio. This allows our customers to make forward-looking, proactive decisions based on current trends and market drivers. Our predictive analytics provides customers statistical data to back up strategic decision making and carefully shift away from gut feeling. Using these types of statistics have proven very successful in making positive operational impacts in the private industry. Some of the top organizations across the private sector have cited widespread adoption of business analytics as key to their overall success. Our products, services and specialized methodology are tailored to meet our federal customers missions. Leaning on our expertise in human capital management systems and federal domain knowledge, we provide analytics that make a difference in key areas. First, we use trends in the federal workforce, population demographics, educational trends, and the workforce at large to determine what skill sets and competencies may become scarce in the future. Our customers can use this information to ramp up training and hiring programs to target shifting needs. Business Analytics for Better Government 8
9 We have several applications of these techniques in the Workforce Planning arena. We can identify customer employees who have a high probability of either leaving or staying, which is data customers can use to focus efforts on retaining essential talent. Using data identifying employees that are likely to leave, our customers can chose to ramp up efforts to acquire a replacement long before an employee s resignation is received. Since acquiring a clearance for a new hire is a lengthy and costly process, this is extremely valuable for customers requiring a cleared workforce. We also use our techniques to assist customers in cultivating a balanced high performing workforce by identifying areas of likely growth or loss in federal resources over time across a variety of demographics, skills and competencies. These techniques serve as a valuable commodity for several areas of operation across the federal market. For example, since compliance is a major concern for many customers, it is important to identify potential shortfalls using predictive analysis, which will address risks before they become problems. Another example is mission analytics. Data mining can be applied to intelligence collection databases putting collectors in better position to gain better intelligence from potential threats. Just as in the private sector, predictive analytics can provide government the ability to manage its budget accurately. This provides stronger analysis of potential budget cuts and the downstream impact on available resources, and helps to reduce federal spending. Lastly, on large programs, predictive analysis could help managers identify potential risks before they become operational challenges, such as the loss of critical resources, emerging or increasing needs for new skill sets, and a variety of surge support events. This enables managers to take proactive steps required to mitigate risk, saving the significant time and effort associated with addressing risks after they become operational challenges. Northrop Grumman s experience with analytics, data mining, data integration, and federal customer operations make us uniquely prepared to implement the technologies that can solve a variety of operational challenges for the Federal Government. Our organization and its collection of top talent, methods and best practices makes us best positioned to meet specific challenges our federal customers will continue to face. Our vision is to expand data mining and predictive analysis into several areas of federal operations to drive significant operational efficiencies and yield higher quality government services, adhering to our corporate mission of the value of performance. Over the past 50 years, Northrop Grumman has established itself as a leader in innovative federal technology implementations and we will continue this trend by leading business analytics to drive measurable results and better government. Business Analytics for Better Government 9
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