C A S E S T UDY The Path Toward Pervasive Business Intelligence at Merck

Transcription

1 C A S E S T UDY The Path Toward Pervasive Business Intelligence at Merck Sponsored by: Microsoft September 2008 SUMMARY Global Headquarters: 5 Speen Street Framingham, MA USA P F The trend toward evidence-based decision-making is taking root in commercial, non-profit and public sector organizations. Driven by increased competition due to changing business models, deregulation or, in some cases, increased regulation in the form of new compliance requirements, organizations in all industries and of all sizes are turning to business intelligence (BI) and data warehousing (DW) technologies and services to either automate or support decision-making processes. An increasing number of organizations are making BI functionality more pervasively available to all decision makers, be they executives or customer-facing employees, line-of-business managers or suppliers. IDC defines pervasive BI as follows: Pervasive BI results when organizational culture, business processes and technologies are designed and implemented with the goal of improving the strategic and operational decision-making capabilities of a wide range of internal and external stakeholders. Despite the fact that the term Business Intelligence was first coined in 1958 and the first BI software tools emerged in the 1970's, BI is not truly pervasive in any organization. As organizations identify more stakeholders who can benefit from improved decision-making capabilities, they are choosing to deploy BI and thus come increasingly closer to achieving pervasive BI. For organizations struggling with changing organizational structure and culture, business and IT processes and technologies, several lessons can be learned by examining the best practices organizations employ on their path toward achieving pervasive BI. METHODOLOGY In 2008 IDC launched a global market research project with the goal of uncovering best practices in expanding the use of BI and analytics processes and technologies. The research project was underwritten by eleven competing BI software, services and hardware providers. The project methodology, which was developed by IDC and contributors from Boston University School of Management Information Systems department included both a survey of over 1100 private and public sector organizations in 11 countries and in-depth interviews with 22 of these organizations resulting in a series of case studies on best practices in achieving pervasive BI. One of the organizations interviewed was Merck's Research Laboratories Division.

2 ORGANIZATION Founded in 1891, Merck & Co., Inc. (Merck) is a $24 billion global pharmaceutical company. Merck's nearly 60,000 employees are focused on supporting its mission to discover, develop, manufacture and market medicines and vaccines for humans and animals. Merck common stock is publicly traded under the ticker symbol MRK on the NYSE. Merck operates a BI competency center (BICC) comprised of 7 fulltime employees and an additional 20 business-unit or departmental representatives, all tasked with supporting the decision support needs of the Merck Research Laboratories division. SITUATION OVERVIEW Business Drivers Like all organizations that took part in IDC's research project, Merck was influenced by both external and internal factors that triggered a need to re-evaluate its decision-making processes and the supporting BI and analytics technology architecture. In the case of Merck, these business drivers were both strategic and operational. Strategic Merck has long had a culture of fact-based decision-making and its research operations require the ability to process and analyze large volumes of complex data. However, the data dependent culture was hampered by the misalignment of the various BI assets including the data itself, tools to analyze data, and processes for supporting end user BI needs. As in most large organizations each business group had control over its own data, but the BI software support was provided by a centralized IT group with little, if any expertise in the data and the decision processes of the individual groups. The data assets were siloed and decentralized, preventing sharing of information, while the BI IT support was centralized but disconnected from the decision processes of the end user community. An outside view would have placed the blame for the ineffective structure on the lack of an intermediary body with a dedicated mandate to address the BI needs of the organization. However, internally, the lack of adequate BI support created a high level of frustration among both business and IT groups. Operational Operationally, even something as simple as a request for a new report took months to complete, because each end user request became a lengthy software development project for IT with the associated requirements gathering, design, development, testing and deployment steps. This process resulted in unacceptable latency in information delivery to end users. Furthermore, the BI tools were available only to a select few 'power-users' who supported the needs of the broader business user community. This approach introduced further latency into the information access and analysis processes. According to George Carlin, Director of the BI Competency Center (BICC), it was this "lack of timeliness in information availability that was 'the straw that broke the camels back' and triggered the creation of the BICC." The business user frustration finally reached a peak in 2006 and spurred a group of concerned business managers to propose the creation of a BICC with the goal of changing how IT and business interacted to facilitate development of a more effective BI solution. Around the same time there was an executive decision at Merck to introduce the Six Sigma management methodology. The information requirements of this performance management methodology also played an important role in the creation of the BICC. 2 # IDC

3 SOLUTION Towards Pervasive Business Intelligence To address its BI and analytics needs, Merck embarked on a path toward pervasive BI that would require changes to the organization's culture, technologies, and business and IT processes. Organizational Culture The 2006 introduction of Six Sigma methodology, and the general need for faster and more flexible access to information to support decision making, resulted in the need to change the business users' reliance on the central IT team for information access and analysis needs. The biggest change that was needed was the creation of a self-service information access and analysis culture that clearly delineated the responsibilities of each internal group of stakeholders. The decision at the executive level that a change had to happen to the BI capabilities was addressed by the creation of the BICC. The BICC, which became operational in 30 days, was tasked with engineering of BI processes and selection of automation tools to improve the efficiency of information management. Organizationally, the BICC was created outside of the IT group and was composed of business staff, referred to as business integrators, including employees from finance, pharmaceutical product portfolio management, project management, and scientific workforce as well as BI tool specialists. All of the 7 core and 20 business unit members of the BICC are certified Six Sigma professionals and possess both BI tools configuration and business expertise. Although it was situated outside of the IT organizations, the BICC recognized the important role of the IT group, which was tasked with the IT infrastructure support for all BI related technology components including deployment, maintenance and enhancement of storage, server and communications hardware, and database and application software. This division of labor enabled each group to focus on their core competencies. Technology BI technology was not new to Merck. The company had been using various tools for years. However, the BICC decided that there was a need to change the primary BI technology from a toolset that had been previously used by a select few specialists in the IT group to one that would be used broadly in a decentralized fashion by many business groups. It selected Microsoft as the primary BI technology provider. Although the BICC had to overcome some initial resistance from the IT group to the introduction of the new BI technology, the end user familiarity with various Microsoft tools influenced the final decision. For example, Microsoft Excel had been the number one tool used for data analysis. However, the BICC also wanted to overcome many of the shortcomings of stand-alone Excel, such as lack of support for data quality, security, and metadata management, and insufficient scalability. During the planning stage, the BICC incubated the notion of using Microsoft as the primary BI vendor within a small group, but when it came time for deployment the new BI functionality was rolled out to a large group of users a methodology that was not hindered by the fact that Merck already had an enterprise agreement with Microsoft. The first new BI functionality was made available to end users within 4 days after the BICC was operational. The new BI solution included several Microsoft BI software components. The platform is based on the Microsoft SQL Server database and the Analysis Services, Reporting Services, and Data Integration Services features of the database. Due to the decentralized organizational structure of 2008 IDC #

4 Merck's Research Laboratories divisions, the BICC decided to deploy a DW architecture based on related data marts rather than a single enterprise DW. This approach has provided the organization with more flexibility in addressing the unique requirements of its various end user groups. The end user interfaces vary depending on specific business user groups, and include technology such as Microsoft Excel (directly connected to the Microsoft SQL Server database, thus overcoming many of the shortcomings of stand-alone Excel), Microsoft ProClarity web and desktop clients, and the Microsoft SharePoint Portal. These tools are used for both production reporting and dashboards as well as adhoc query and analysis. In mid 2008 Merck also deployed Microsoft's PerformancePoint Server to address the needs for financial performance management. Like any other large organization, Merck also has other specialized BI and analytics tools, especially for its R&D staff. Business and IT Processes With support from the president of Merck Research Laboratories, the BICC instituted a program of "BI for the masses." The BICC segmented end user BI requirements based on three levels: personal, team, and enterprise, and began with the re-evaluation of the existing BI technology to ascertain its appropriateness to support end user needs at all these levels. At the personal level, BI functionality is provided through Microsoft Excel spreadsheets that serve as the end user tools with direct links to the multi-dimensional data cubes and the query library within SQL Server. At the team level, BI functionality is provided through publishing of dashboards that facilitate team interaction around a common set of performance metrics. At the enterprise level, BI functionality is provided through scorecards with drilldown functionality enabled for employees ranging from the executives to group supervisors. The processes of Merck's Research Laboratories are project-based with all employee time charged to activities of specific projects. One of the new BI processes introduced by the BICC included a regularly scheduled report with information about project activity times executed using SQL Server Reporting Services sourcing data from a SQL Server Analysis Services cube. This report is distributed to all supervisors and managers in the scientific and operational communities. Managers who previously had no insight into detailed information about charges to each project now have access to both aggregate information as well as detailed data through drill-down functionality. Seeing the value of such a report, the BICC got immediate buy-in from managers receiving the new information. Strong end user buy-in also occurred due to training conducted by the BICC, which included both classroom training and tutorials published on the company's intranet. However, the highly intuitive tools of the BI solution have also played a big part in the broad deployment and acceptance of the BI solution. The new BI solution has encouraged more users to request new information. Over the last two years the BICC has increased the number of dashboards, reports, and the cube library. All new requests from business users are sent to the BICC to ensure compliance with internal data governance policies. The BI solution is set up such that most new requests end up being variations of already existing BI assets that can be quickly deployed to end users. Although the BICC charter is to serve Merck Research Laboratories, it does occasionally receive requests from other groups within Merck. Furthermore, Carlin meets throughout the year with his counterparts in other areas of Merck to share best practices about the BI program. 4 # IDC

5 BENEFITS Carlin said that "historically, 9 months would pass between the time a request was submitted for a new report and when it was deployed. The BICC was able to reduce this time to 3 business days. Removing the operational hurdle of responding to new requests is leading to further adoption and higher satisfaction levels among the 3,500 business users of the BICC." Merck now has a performance management system that includes metrics related to enterprise, division and personal objectives. Employees are measured on their performance against these metrics. Thus, the BI solution supporting the Six Sigma performance management process also influences employee compensation and promotions across the organization. Moreover, employees are able to discuss team, departmental or organizational performance based on the commonly understood and trusted data. In other words, Merck has been able to make substantial progress toward providing the right information to the right people at the right time using the right tools. The Right Information! Historically, it had been common for Merck staff to come to meetings with reports generated from their own disconnected systems and to spend time justifying and reconciling the data. With the new BI solution end users are able to ask questions about the content rather than the origins of the data.! The new BI solution delivers actionable information to various users groups based on their system access rights. Access to individual, team and enterprise performance metrics allows each business user to understand how the tasks they execute impact related business processes and therefore adjust their priorities as needed. The Right People! Merck Research Laboratories BI solution has about 3,500 users worldwide ranging from executives and scientists to business analysts and operational staff. Even executives have become part of the new BI process, interacting with the new BI solution directly, which is a significant change in organizational culture.! End users are also segmented into power users and information consumers. The latter group has access to power users embedded within the BICC who can support ad-hoc query needs. Merck's BICC is able to control access permission from a centralized location to ensure the right people are accessing information at a level of detail appropriate to their role. For example, laboratory supervisors and hiring managers have different BI needs and different information access rights. The Right Time! Delivering information at the right time can mean many things. Ultimately data must be captured and then made available to decision makers at intervals that match the specific business process requirements. On the data capture side, many of the Merck Research Laboratories data marts are updated daily with some updated weekly or monthly. For example, performance metrics are updated weekly, while laboratory data is refreshed more frequently.! In terms of information access, a key aspect of Merck's ability to provide information at the right time to its end users has been a change to the self-service culture that eliminates the need for end users to contact IT to gain access to specific information. In addition, the BICC's ability to respond rapidly to end users' custom requests contributes to the availability of information at the right time IDC #

6 The Right Tool! With the Microsoft BI software portfolio, Merck Research Laboratories was able to deploy data integration, data warehousing, ad-hoc query and analysis, production reporting and dashboards using tools from a single vendor. The integration of all the components and end users familiarity with interfaces such as Microsoft Excel played a big part in the selection of Microsoft. To be sure, Merck, as any other large enterprise, does also use BI tools from other vendors, especially to support certain R&D processes.! Although the primary consideration when evaluating BI tools should be the appropriateness of the functionality delivered to specific groups of end user decision makers, it is also important to ensure that the chosen tool can be easily maintained, upgraded and enhanced as needs change. The current BI architecture enables member of the BICC to respond rapidly to any custom information access and analysis requests of end users, while IT is able to manage fewer 'moving parts' from a single vendor. LESSONS LEARNED IDC's goal in interviewing Merck was to identify best practices that other organizations can apply in their efforts to make the use of BI and analytics processes and tools more pervasive. Neither Merck nor IDC would claim that Merck has fully achieved the goal of having pervasive BI. Nevertheless, there are several important lessons that the case highlights:! To fix problems with any given process and technology set within an established organization, it is often advantageous to introduce a radical change rather than try to implement incremental enhancements that are likely going to go unseen by frustrated end users. The introduction of the BICC and the selection of a new BI technology was an example of such a change at Merck Research Laboratories.! The success of a BICC is highly dependent on a clear definition of the roles and responsibilities of its members and those external groups supporting or using the BICC. At Merck, the BICC was set up outside of the IT group with the responsibility to engineer BI processes, develop and support specific BI tools, and act as a governance body in charge of evaluating new end user requests. The IT department was given the responsibility to support the infrastructure for the new BI solution. Rather than tying up IT resources with tasks such as data mart or report development, which require deep business expertise, IT can now focus on its core competencies. Finally, the end user community was given the flexibility and responsibility to access and analyze much of the information on their own, removing all but the most complicated query and analysis tasks from the BICC. The resulting BI solution created an environment of controlled empowerment that is in alignment with the organizational structure and culture.! It is important not to underestimate the resistance from existing vested parties to any change. The BICC had to convince the IT group about the necessity to bring in new BI technology even though the previously used technology was considered by IT to be a company standard. The interdependence of the BICC and IT groups within the proposed BI support structure required any friction between the two groups to be resolved at early stages of the project. Formal direct discussions led to a successful resolution of outstanding issues based on a collaborative effort. 6 # IDC

7 ! To gain end user acceptance of a new BI initiative, it sometimes becomes necessary to introduce a new set of technologies to overcome the historical frustrations of end users. Such technology decisions may only partly be due to specific feature and functionality assessment. Although in the case of Merck Research Laboratories it was important for the BICC to select BI tools with which end users were most familiar (e.g. Excel), and having a toolset that spanned the various query, reporting and analysis needs of users, use of the new technology from Microsoft was also important in overcoming end users' poor experience with previous solutions.! Any new BI initiative that is designed to overcome existing shortcomings should not be viewed only as a technology replacement or enhancement project. Given executive support, organizations should take the opportunity to re-evaluate decision processes and performance metrics. At Merck Research Laboratories, faster and more flexible access to information encouraged end users to develop new ways of looking at the data. However the success was not immediate. Given the existence of previously unsuccessful BI initiatives, it is important to expect an initial unwillingness by end users to suspend disbelief about the capabilities of the new solution. At Merck, initial success bred further success and eventually spread throughout the organization. Copyright Notice External Publication of IDC Information and Data Any IDC information that is to be used in advertising, press releases, or promotional materials requires prior written approval from the appropriate IDC Vice President or Country Manager. A draft of the proposed document should accompany any such request. IDC reserves the right to deny approval of external usage for any reason. Copyright 2008 IDC. Reproduction without written permission is completely forbidden IDC #