PRACTICAL BUSINESS INTELLIGENCE STRATEGIES: Strong BI Foundations to Fuel Your Business Success. Companies that stand out from the crowd have learned the importance of leveraging information to make the right decisions. These companies respond to market changes quickly, drive inefficiency out of their business processes, and have a deep understanding of what their customers want, as well as what to charge for it. Such organizations are successful in large part because they know how to get the most out of their business intelligence (BI) investments. BI and its Benefits BI refers to techniques used to identify, extract, and analyze business data to give organizations an in-depth view of their business operations. These techniques can include online analytical processing, statistical analytics, data mining, process mining, complex event processing, business performance management, benchmarking, textual data mining, and predictive analytics. While BI has been a hot topic for several years, investments in BI programs are on the rise as BI tools and methodologies are more mature and can handle complex business demands. Currently, the North American BI services market is worth $15.5B, and is expected to grow by about eight percent through 2013. Growth in BI is justified as BI investments offer significant advantages to businesses that do it well. A quality BI program promises to help companies: The North American BI services market is worth $15.5 billion. It is expected to grow by about eight percent through 2013. TEKsystems.com 1
Make better business decisions, faster Identify opportunities to generate more revenue Identify opportunities to cut costs Offer greater transparency to mitigate risks and achieve compliance As companies struggle to gain a holistic view of their organizations, a comprehensive BI strategy is more important than ever. The uncertain economy has led to an increase in merger and acquisition activity and corporate restructuring. This leaves companies to sort out information systems and disparate data they must consolidate, analyze, and understand in order to gain a consistent view of the organization and move forward. Meanwhile, corporate budget cuts force departments to finds ways to contain costs. They look to BI to gain a true understanding of expenses, highlight waste and inefficiencies, and determine if they can make competitive moves like adjusting prices. Companies are also leveraging corporate information to discover potential business risks and gain a view on their level of compliance with government and industry regulations. But BI is not just about defensive tactics. Organizations need information to determine where to make investments. Superior data management and analysis can offer companies opportunities for increased revenue through higher levels of cross-selling, superior client insights, and identification of new, high profit-potential markets. Ultimately, great BI can even provide predictive business insights. Falling Short of Greatness To give employees the timely and accurate information they need to gain a competitive edge, BI must be approached cohesively, and with business goals in mind. Take UPS, for example. Market research analyst Gartner recently gave the logistics giant its 2011 Gartner Business Intelligence Excellence Award, which recognizes recent BI implementations that demonstrate significant business impact and overall excellence in the integration of business, decision, analytical, and information processes. UPS uses BI and advanced analytics to improve its operations the company reduced the amount of driving done by trucks by 30 million miles annually, while offering a wider product mix and delivering better customer service. BI is not just about defensive tactics. Organizations need information to determine where to make investments. However, according to the CIO Market Pulse study conducted for TEKsystems, most companies that implement BI haven t yet reached this high level of optimization. Although 53 percent of the 201 IT decision-makers polled report they have an enterprise wide strategy with dedicated resources and coordinated architecture, 35 percent report no enterprise wide strategy, but tactical solutions have been implemented at the business-unit level on an ad hoc basis, and 12 percent report no cohesive strategy at business-unit level or enterprise wide level. Overall, 69 percent rate their company s overall BI program as average, fair or poor. Additionally, 66 percent rate the effectiveness of their company s BI program as average or worse. 66% Sixty-six percent rate the effectiveness of their company s BI program as average or worse. Challenges to Optimizing BI The road to developing an optimized, fine-tuned BI strategy can be challenging. First of all, BI programs require tight alignment between IT and business units TEKsystems.com 2
to be truly successful. And although BI can improve this alignment over time, IT needs to ensure it has buy-in and the necessary collaboration from the business departments at the onset for BI projects to succeed. A lack of strong alignment with the business is clear when examining BI data governance, the set of processes that ensure data assets are properly managed. Governance ensures the information can be trusted and helps to ascertain data quality, which in turn produces the correct answers to BI queries. BI programs are more likely to be recognized as excellent or very good if an organization s business audience is extremely and/or very engaged in the data governance process 55% 59% 10% 15% 70% Seventy percent of respondents to the CIO Market Pulse study say their business counterparts are somewhat, not very, or not at all engaged in data governance processes. Data quality presents another challenge. Without it, companies cannot trust their BI strategies to produce the results they need. Yet data quality is elusive for most organizations, as is the ability to measure and analyze data for quality. Nearly one-half of respondents report their BI structures rarely or never incorporate a formal data stewardship program with an automated toolset or portal for data quality management. And 46 percent report their BI structures rarely or never incorporate a formal data quality program that includes data quality scorecards. Respondents whose companies do have baseline budgets for data quality or master data management report that only 17 percent of data warehousing spending, on average, is allocated to these critical areas. BI Program Exc/VG (b) Business is engaged Business is not engaged BI Program Fair/Poor (c) Source: IDG Research, June 2011 A third key challenge is delivering timely responses to new business questions. Often as a result of the two challenges above, many BI programs struggle to get good data and valuable insights into the hands of decision-makers fast enough. According to the poll, 53 percent of respondents are neutral or disagree that their company s BI initiatives help them compare results in real time. Fifty-five percent are neutral or disagree that their company s BI initiatives help them make fewer last-minute decisions. Steps to Achieving Optimized BI Optimizing BI strategies can result in significant improvements realized across the business. Companies can set up BI programs for success by making sure these factors are in place: TEKsystems.com 3
When these key attributes are embedded within a BI program, organizations are more likely to be satisfied: Key Attribute Business-driven analytics via top down methodologies Business process modeling resources are engaged with the business Dedicated prototyping or business-focused architectural and development resources IT organization has dedicated Enterprise Data Architecture group Data warehousing organization has baseline budgets for data quality or master data management Formal data stewardship program with an automated toolset or portal for data quality management Formal data quality program that includes data quality scorecards % Increase in Satisfaction with BI Program 60% 57% 54% 50% 50% 48% 38% prove data quality and track it over time. One hallmark of a mature data-quality practice is when IT can give business users the tools to create reports on their own, leveraging high-quality information to get the answers they need. Prototypes set the proper expectations: Poll respondents report that prototyping and top-down methodologies are typically well understood by business units. This is no surprise. Building prototypes designed to answer business questions can help IT understand what business needs to know, and to shape businesses expectations for final deliverables. Work from the model, If we built this, will you be happy? This helps ensure buy-in from all parties and sets the foundation for solid business and IT alignment. Create a magic quadrant for burning questions: Companies must justify the value of each BI project s features and functions. Companies can evaluate the value of building a report that answers each specific business question relative to the cost required to build the report. Both IT and business stakeholders should sign off on the final priorities, and this matrix comparison can be used to measure ROI. Properly aligned teams: Defined roles and responsibilities are essential for BI success, even if the program is outsourced. Project management teams are needed to track budgets, identify risk, oversee the project, and act as subject matter experts to ensure technical competencies, quality of work, and alignment of program goals with existing tools and capabilities. BI center of excellence (COE) teams work on the development of the BI project to ensure program success and to ensure IT and business goals are aligned. BI competency center (BICC) teams ultimately develop and review code and ensure BI programs function as expected. The COE team should be aligned to address key business questions, while the BICC should provide operational coverage within the data warehousing environments. Data quality is ongoing, not a finite project: Data quality and data warehousing require constant improvement. Scorecards and dashboards should be leveraged to BI programs rated excellent or very good demonstrate higher degrees of alignment with the business than those rated fair or poor: A firm can make fewer last-minute decisions if the BI program is designed based on a solid understanding of these decisions, and the criteria the business wants to consider. Data warehouses can only correctly represent real-world objects and events if they are built with a strong understanding of these objects and events. BI can help to improve business processes if designed with these processes in mind, with the criteria indicative or predictive of successful process flows. TEKsystems.com 4
Business intelligence, ROI, and no hidden costs: The cost of data warehousing and data quality should not be folded into the cost of the BI analytics or reporting project. Data warehousing and data quality are baseline requirements for IT and the business. They should be addressed through a shared service program model not factored into a targeted BI project. In fact, by factoring warehousing and quality expenses into the cost of a BI project, ROI becomes virtually impossible. 46% ABOUT US People are at the heart of every successful business initiative. At TEKsystems, we understand people. Every year we deploy over 80,000 IT professionals at 6,000 client sites across North America, Europe and Asia. Our deep insights into IT human capital management enable us to help our clients achieve their business goals while optimizing their IT workforce strategies. We provide IT staffing solutions, IT talent management expertise and IT services to help our clients plan, build and run their critical business initiatives. Through our range of quality-focused delivery models, we meet our clients where they are, and take them where they want to go, the way they want to get there. Forty-six percent report their BI structures rarely or never incorporate a formal data quality program that includes data quality scorecards. Conclusion While BI is maturing, most companies still have a long way to go to develop strategies that are cohesive and achieve maximum ROI. However, once companies reach a high level of data quality and business/it alignment, BI strategies allow IT to effectively and swiftly respond to new requests, and business users can leverage self-service tools to discover the answers they are looking for. The result is better, faster decision making that fuels the business and gives companies a much-needed competitive edge. TEKsystems 7437 Race Road, Hanover, MD 21076 888.835.7978 www.teksystems.com TEKsystems, Inc. is an Allegis Group, Inc. company. Certain names, products and services listed in the document are trademarks, register trademarks, or service marks of their respective companies. Copyright 2012 TEKsystems, Inc. All Rights Reserved. TEKsystems.com 5