Tangible Business Benefits of Business Intelligence & Performance Management

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1 Tangible Business Benefits of Business Intelligence & Performance Management Patricia Vekich Waldron WW Distribution Solutions Executive BI and Performance Management

2 Global Global market market forces forces are are impacting us us all all Data Data explosion explosion Slowing Slowing superpowers superpowers Economic Economic downturn downturn Emerging Emerging economies economies Increasingly Increasingly complex complex supply supply chains chains Empowered Empowered consumers consumers Frozen Frozen credit credit markets markets Energy Energy shortfalls shortfalls Erratic Erratic commodity commodity prices prices The reality of living in a globally integrated world is upon us.

3 Topics Market Forces Information Drivers Decision-making Platform 2009 Trends Companies Making Smarter Decisions

4 In In turbulent times, an an enterprise has has to to be be managed both bothto to withstand sudden blows and and to to avail itself of of sudden unexpected opportunities. This This means that that in in turbulent times the the fundamentals have to to be be managed, and and managed well. Peter Drucker Author, consultant, and father of modern management

5 new leaders emerge who win not by surviving the storm, but by changing the game. Changing the game requires process transformation that infuses intelligence into our decision-making and management systems Sam Palmisano IBM CEO, on Smarter Planet

6 The growing velocity of the volume, variety, and granularity of information is driving new, unprecedented complexity Today, the processing power of the web is about equivalent to one human brain. By 2040, it will exceed the total processing power of all of humanity Every day, 15 petabytes of new information are being generated. This is eight times more than the information in all U.S. libraries Tomorrow s issues and opportunities will be bigger and harder to solve in ways that defy our imaginations today By 2010, the amount of digital information will grow to 988 exabytes (equivalent to a stack of books from the sun to Pluto and back) 80% of new data growth is unstructured content INFORMATION Timelines for action will be compressed beyond current ability to respond We are approaching a do or die moment: enterprises that act will survive to prosper, and those that don t will be wash away * Source: TED 2007: Predicting the Next 5000 Days of the Web. IBM analysis

7 Lack of information forces decision makers to be most reliant on their intuition How often have you made major decisions with incomplete information or information you don t trust? 1 Always Frequently 1 in 3 often do To a great extent To what extent do you make business decisions based on the following factors? 2 Personal experience and intuition 25 % Analyticallyderived 19 % Collective Experience 9 % 43 % Sometimes 54 % 43 % 35 % Rarely Never To a little extent 15 % 5 % 28 % 9 % 14 % Guestimation has worked up to a point (arguably we ve passed it), but is prone to serious failure in new circumstances, greater complexity and higher speed Source: EIU launch survey for IBM BAO, March 2009, n=225: 1 Question 2; 2 Question 6

8 Most organizations recognize the opportunity for analytics, but are still very early in the adoption process Would more information drive better decisions? 1 Is your organization taking advantage of new opportunities to leverage information for its advantage 2 To little or no extent To some extent Yes, we recognize the opportunity Yes, we recognize, but we ve just begun to act 27% 41% 2 out of 3 are still getting started Nearly 3 in 4 said yes To a great extent Yes, we do it now and it is well underway 13% Completely No, we have not even thought about it 18% 1 out of 5 does not get it Source: EIU launch survey for IBM BAO, March 2009, n=225: 1 Question 7; 2 Question 9

9 How do we get there and what can we hope to achieve? Business Intelligence: Challenges and Evolution The world of BI today involves moving out of the initial departmental capabilities of data to evolve to higher informational and analytic techniques that are accessible enterprise-wide and extend to integrating into a company s partner network. Value BI Maturity Model Efficiency The World of Reporting Information Access Reporting Spreadsheets Manual effort Disjointed solutions Effectiveness Enterprise Information Improved information access & delivery Departmental & functional data marts Subject area data warehouses Performance Management The Intelligent, Agile Enterprise Integrated Business Performance Management Self-sufficiency Enterprise alignment, accountability Advanced Analytics Information Integration Enterprise Warehouse and Integrated Reporting Strategy Single version of truth Enhanced delivery Consistent, high quality information Information As a Service Information on Demand Information to the masses (internal & external) Actionable, focused, relevant delivery Embedded analytics Integrated MDM Unstructured data integration Advanced Math Research easily leveraged SOA Time

10 Business Intelligence Most organizations have some form of BI and most CIOs are familiar with its benefits: increased efficiency in information delivery at lower costs visibility into performance for greater agility accurate, consistent information for better business decisions Business intelligence (BI) initiatives present complex challenges. When implemented correctly, in conjunction with a well-executed strategy that is aligned across business units, they offer insights that can drive positive business changes. When BI initiatives fail, they often result in elaborate, costly, time-consuming implementations that no one uses. Gartner

11 Driving Smart Decisions for Better Business Outcome Cut costs Manage risk Improve profits New opportunities

12 This Requires a Platform for Decision Making Platform for decision making NEW INTELLIGENCE Business Intelligence, Performance Management Data Integration Data & Content Management Hardware & Systems Management Proven Approach Accelerators and Industry Assets

13 Smart Decisions are made when Everyone Can Answer How are we doing? Why? What should we be doing? 13

14 How are we doing? How are we doing? How are we doing? Why? Why? What should we be doing? What should we be doing? 14

15 FINANCE MARKETING PRODUCT DEVELOPMENT How are we doing? Why? SALES What should we be doing? OPERATIONS CUSTOMER SERVICE HR IT 15

16 FINANCE MARKETING PRODUCT DEVELOPMENT Measuring & Monitoring Reporting & Analysis SALES Planning OPERATIONS CUSTOMER SERVICE HR IT

17 BI-PM Trends for 2009 The shift toward Pervasive BI

18 Trends Relate to Four Broad Categories Using BI as a recession-fighting tool Vendor platform and tool standardization decisions Making BI more pervasive, easier and cheaper to deploy Taking notice of alternative BI development and deployment models

19 Continued transition to operational BI Continuous monitoring Time-sensitive key performance indicators (KPIs) Line-of-business operational metrics

20 Self-sufficiency Power to the User Role-based Simplicity; Full Range of Capabilities

21 BI-PM Trends for 2009 The Google-isation of BI Easy, relevant, fast

22 BI gets a dose of collaboration Web 2.0 style

23 Driving Smart Decisions Cut costs Manage risk Improve profits New opportunities

24 Driving Smart Decisions: Manage Risk Moet Hennessey USA The ability to quickly revise prices in a complicated and highly regulated industry based on conditions in individual markets.

25 Driving Smart Decisions: New Opportunities Timberland New systems have helped the company reduce SKUs, reduced redundancies, and simplify and help better coordinate sales and operations planning between the company's retail and brand sides

26 Driving Smart Decisions: Improve Profits Boosted intelligence and competitive advantage by integrating order, sales, inventory and financial data with retailer and Internet-based demographic information.

27 Technology for Turbulent Times Can Technology Help Retailers Survive 2009 and Thrive in 2010? Retail has always spent less on IT than most other industries. But as some big-name retailers decide to check out for good, the question arises: Are retailers putting technologies such as BI in the right hands? Analysts say it's time for retailers to reprioritize everything. - CIO Magazine - February 2, 2009 " We have seen a 20% increase in our packing efficiency after showing our packing supervisor a performance analysis of packers. Our own retail division has changed its buying patterns after they found out that [previous] patterns were inconsistent with what was selling on the floor. We have provided instant visibility across production and sales delivery requirements, which improved our shipping efficiency from 80% air and 20% ocean to 45% air and 55% ocean. - Elie Tahari speaking of their implementation of Cognos PM in STORES, February 2009

28 Why change and why now? The information environment is at a tipping point To survive, business leaders must act The enterprise has not kept up and cannot keep up Traditional transactional and humanauthored enterprise data is rapidly growing People at all levels need better information and executives need to make decisions more quickly Decision making is based on instinct, subjective information, and often the wrong facts Unstructured data is growing at geometric and exponential progressions, and most of it is not used in analytics Decisions need to be made based on a new set of facts based on the entirety and richness of the information base Existing tools cannot access or analyze the growing data effectively and aren t positioned to handle the data deluge The unblinking eyes of instruments and sensors is producing tireless streams of new data Mental bandwidth needs to be reallocated towards harder and more pressing decisions Huge amounts of data are ignored, mismanaged, or under-utilized We are approaching a do or die moment: enterprises that act on the opportunity will survive to prosper, and those that don t will be lost

29 Q&A 30

30 Business Analytics and Optimization Service Line A new imperative has emerged for enterprises to aggressively pursue business analytics and optimize their businesses in order to address important and complex business and societal opportunities Business Analytics and Optimization brings together the comprehensive services and leading edge industry solutions that enable organizations to make and act upon critical decisions. We help our clients realize their strategies through information management, advanced analytics and process management while leveraging the power of smarter technology