White Paper Future Proof Your Business Intelligence Initiatives Part I TM By Sameer Bhagat and Sriram Jayaraman Solutions Consulting Group, YASH Technologies
Executive Summary The one constant that businesses can rely on is change. While change is a given, successfully navigating it isn't. The current economic situation is one that is challenging the fundamentals of businesses and testing their resilience and perseverance of businesses, as they scramble to adapt. With Business Intelligence (BI), organizations can create an agile enterprise that can easily adapt to changes by making smarter, informed decisions, increase efficiency in the short term while positioning the company for growth in the long term. Analysts have also confirmed that BI has been a top priority for CIOs for the past 1 three years. However, it has been observed in the past that organizations looking to follow a big-bang approach for their BI initiatives have often failed. Without having a solid BI foundation in place first, organizations cannot expect to deliver enterprise capabilities and functionality. Future-proofing the BI initiatives require an agile foundation and structure built on standards, and a phased delivery approach to maximize the investments. In the first of this two-part whitepaper, we will provide a set of best practices that will help organizations to optimize their BI investments by using a phased delivery approach. i 1 Gartner EXP Worldwide Survey of More than 1,500 CIOs Shows IT Spending to Be Flat in 2009, Gartner, January 2009
Table of Contents 1 The Strategic Side of Business Intelligence.................. 1 1.1 Benefits of Business Intelligence..................... 1 1.2 Challenges and Critical Success Factors................ 2 1.3 Addressing the Results Gap........................ 2 2 The Winning Formula for BI Success BI Implementation Approach... 3 2.1 Phase 1 Strategize............................ 4 2.2 Phase 2 Define............................... 5 2.3 Phase 3 Implement............................ 5 2.4 Phase 4 Govern.............................. 7 3 Conclusion...................................... 8 ii
1 The Strategic Side of Business Intelligence In an economic downturn, most companies feel the need to undertake belt-tightening measures such as hiring freezes and layoffs. Moreover the challenges of limited credits, falling markets, and managing stakeholder investments makes it increasingly important for companies to do more with less. To address these challenges of doing more with less, competing for credit, and managing stakeholder expectations, organizations need to increase visibility into their financial and operational performance. Business Intelligence tools can help organizations make informed strategic and operational decisions, reduce costs, and continue innovating so that they can not only survive but thrive in an economic downturn. Companies are increasingly using BI tools providing clear, insightful metrics and dashboards to monitor, analyze, and highlight operational challenges, areas for improvement, and opportunities for revenue growth. 1.1 Benefits of Business Intelligence To meet the growing demand for insights into enterprise-wide performance, organizations are expanding the scope of business intelligence tools by establishing links between associated financial and operating metrics to find opportunities for reducing costs and improving the top line. Reduce Costs Business Intelligence can help organizations reduce costs by identifying operational efficiencies and eliminating manual tasks through automation. Insights into financial and operational performance allow executives to identify and address critical problems undermining business performance in real-time. Organizations can also reduce operational costs by automating manual business processes throughout the organization. Take the example of Toyota Motor Sales U.S.A. which could eliminate operational inefficiencies with improved supply chain tracking. After experiencing failure with their data warehousing initiative, the company decided to implement an Oracle database with Hyperion Essbase Business Intelligence platform. The tool provided the ability to see dashboards that allow executives to see hot spots in their business units and investigate further to identify the problem. Toyota has achieved a 506 percent return on the software, primarily since the historical data the new system made available allowed the company to identify a port in Baltimore that was no longer needed. Over the past eight years, Toyota U.S.A. has managed to increase the volumes of cars it handles by 40 percent over the past eight years while 2 increasing headcount by just 3 percent. Improving the top line Business Intelligence can not only help reduce cost but enables you to make better, more strategic decisions by presenting business critical information faster and in an easier to understand format. BI can bring complete insight and data of the organization to the right people at the right time, by making it easy to connect people with LOB data and business processes across the organization. For instance, Constellation Energy, a Fortune 200 Power Company was able to leverage Business Performance Management tool for budgeting, financial planning, and analysis. Following years of fast growth, and fostered by mergers and acquisitions, utility deregulation, and pushes into new areas of business, Constellation Energy sought a business performance management (BPM) tool to consolidate the company's financial processes. Constellation adopted OutlookSoft BPM tool (now acquired by SAP) throughout the company to streamline reporting and serves as a single repository for business-unit budgeting. It has largely replaced the scattered data and accounting systems previously used through a phased 3 rollout plan over a three year period. 1 2 Toyota's Business Intelligence: Oh! What a Feeling, CIO Insight, October 2004 3 BI Case Study: Power Company draws new energy from BI Solution, TDWI
Department Store Chain, Belk provides another example of using Business Intelligence for improving the sales results. After centralizing their buying office, Belk needed efficient access to chain-wide data for sales and demand forecasting. The company invested in MicroStrategy's BI tool to get a consolidated view of sales, inventory, and order information with drilldown capabilities. The solution also enabled exception reporting with capabilities 4 to send sales results to trading partners through more than 400 emails every week. 1.2 Challenges and Critical Success Factors However, evidence suggests that organizations face numerous tactical and strategic obstacles to business case realization for their BI investments. Some of the critical factors for value realization from BI investments are: Business Strategy: Too often BI projects are driven by individuals who do not have a clear understanding of the long term goals and objectives of the organization. To ensure BI success, the business must have a well defined business strategy with clear objectives and goals which can be tied with the BI strategy. Presenting one view of the organization: To present a clear picture of the organization, it is necessary to measure all facets of the business including finance, quality, customer service, human resources and infrastructure. Good Data Quality: The data in your business must be clean, well organized and relevant because Poor Data Quality= Poor Quality Results = Poor Quality Decisions. Good Data Availability: It must be ensured that all the data required for the BI implementation is adequately captured and is accessible to the relevant users. This may require accessing existing enterprise systems and applications, and additional development in order to capture the information. Relevant and Flexible Reporting: The BI tools must be easy to use and flexible and meet the needs of the users and the business. Getting Executive Buy in: Good Communication and Change Management is critical for success of the project, thus requiring buy in from all levels in the business. 1.3 Addressing the Results Gap YASH Technologies recognizes that to ensure success from BI initiatives and user absorption, it should not be deployed using a big-bang approach but by using an evolutionary approach. Employing a phased approach also allows the deployment teams to resolve functionality and scalability issues, while monitoring performance and utilization of the tools. Most companies use a phased deployment approach starting with modest and achievable pilots, envisioning enterprise capabilities, and then evolving over time by delivering capabilities through multiple iterations prioritized to meet the immediate needs of business. Based on our experience with large, complex engagements, YASH Technologies has created a BI Maturity Model as shown in Figure 1 that can help companies develop a long-term roadmap for BI deployment. The BI Maturity Model helps divide companies into four broad groups based on their current level of BI maturity. The grouping is done in accordance with the current BI technology maturity and the expected strategic value. 2 4 Business Intelligence gets Smart(er), CIO, September 2003
High Strategic Value Low Toward Data Ubiquity Process, customer, and supplier homogeneity increases reusability of data across company Basic Reporting Scope: Measure and Monitor business operations Representative Capabilities: Enterprise Reporting Historic Data Access Actual vs. Forecast Analysis Scope: Analysis data to uncover trends and root causes in business Representative Capabilities: Trend Analysis What If Scenarios Pattern Analysis Root Cause Analysis Intelligence Scope: Empowers Business for Decision Making Representative Capabilities: Executive Dashboard and Scorecard Threshold and Alerts Performance Metrics Real-time Decision Making Scope: Monitor organizational performance at all levels and in real-time Representative Capabilities: Real-time data metrics Enterprise Performance Management Toward Real-time Integrated value chain permits rapid response to business opportunities Low Technology Maturity Figure 1: YASH BI Maturity Model High The current BI maturity level can be identified by considering the current BI systems in use and intelligence needs met by the systems. For organizations to advance from one stage to the next, they must achieve a balance in different maturity factors such as people, process, and technology. The organization needs to undertake a set of initiatives in order to move to the next stage of maturity. Since BI deployment ensues in a fundamental shift in the way the organization operates, we recommend identification of specific, foundational pilot areas which has the potential to deliver maximum benefits and project success. After ensuring success with the quick win pilots, organizations can execute on the planned evolution of the organization's BI landscape. 2 The Winning Formula for BI Success Implementation Approach Since BI has the capability to become a lever for strategic change across the organization, business requirements can be expected to evolve over a period of time requiring higher levels of integration. This makes management skills critical to success. Through many successful implementations worldwide, YASH has discovered that the most effective implementation approach requires a holistic view of the current and future BI needs of the organization, while creating a distinct and targeted path towards bringing the organization's BI vision into reality. Our implementation approach consists of the four phases depicted below, which enables organizations to realize baseline functionality while building the foundation for extending BI functionality as demand evolves and increases. As depicted in Figure 2, we have incorporated a best practice iterative approach for solution delivery with four key phases. 3
Strategize Define Implement Govern 2.1 Phase 1 Strategize Figure 2: BI Implementation Approach Organizations typically use an incoherent strategy towards BI deployment, characterized by different departments or business units using different BI tools. The decision is often based on the unique business requirements of the department or business unit, technology architecture, and end-user needs. This is primarily due to the lack of clear definition of project scope, understanding of industry best practices, and prior deployment experience. Based on our experience, organizations that employ a formal BI strategy are more likely to achieve success with their BI deployments. It is therefore critical to align the organization's business vision with the BI Strategy and understand the business requirements as defined in the assessment. The activities involved in the Strategize phase will include: Strategy Kick-Off: Through stakeholder workshops and individual interviews, critical information such as business drivers, success factors, scope, and risks are identified. This ensures centralization or alignment of the BI efforts across the organization. After these details are extracted, key areas for pilot implementation with high visibility but low risk are identified. Current State Assessment: The core BI strategy team conducts an assessment of the current BI environment and other information delivery systems, the organization's technical architecture, and integration methods organizations to understand the current level of BI maturity. It also helps in understanding the shortcomings of the existing systems and identifying the components that can be leveraged in the future BI environment. Initiative Planning: It is vital for organization to plan the BI initiatives so that it can help in project prioritization, scope management, cost management, and benefits realization. By leveraging a strategic approach for identifying and realizing the business benefits of BI projects, organizations can develop the high-level business requirements and the necessary BI capabilities. As a next step, a simple pair-wise comparison of features should be done to elicit and prioritize requirements based on customer's inputs. The value-based prioritization approach and the complexity rankings can enable organizations to make informed decisions on resource allocation and project delivery schedules to optimize business value. The mapping between business benefits and application functionality also enables effective management of scope change by providing project sponsors with information on the impact of scope change on business value. Business Case: Developing a business case for the pilots to ensure executive buy in by detailing the costs involved and by identifying and articulating the organizational benefits in terms of improvement in operational efficiency and higher levels of customer satisfaction and growth. 4
One of the main reasons why several BI initiatives fail is due to the lack of a clear, unifying vision. Different departments pursuing their own BI strategies can result in a hodgepodge of tools and redundant processes that undermines the core objective of BI. Based on our experience, it is vital to have executive sponsorship during the Strategize phase to ensure that all initiatives are coherently integrated as a part of the enterprise BI strategy. A balanced, cross-functional team with clearly laid down roles and responsibilities is also critical for the success of the engagement. 2.2 Phase 2 Define With a multitude of software vendors selling BI tools in the market, it becomes all the more important to select the right product for your unique business needs. Moreover, designing an optimal, future-state architecture is vital to provide scalability and flexibility required to meet the growing BI needs of the organization. The Define phase aims at designing the future state architecture and performing end-user segmentation based on business needs. The activities involved in the Design phase will include: Product Selection: The products typically considered for a BI deployment include the BI platform, portal and presentation layer, reporting and query tools, ETL tools, data quality tools, data warehousing platforms, integration tools for data and workflow integration. As a first step, companies need to shortlist, select, and acquire the necessary software solutions for implementation of the recommended solution architecture. Conceptual Design: As a next step, companies must identify the discrete components of the BI solution and design the overall solution architecture. By segmenting the end users based on roles and business need through interviews and surveys, actionable metrics that are critical to the role of each user segment can be defined. Other aspects such as level of granularity required, alerting requirements, workflow integration, portal integration, personalization, access rights and security also needs to be considered during this step. Implementation Strategy: By using the information captured during assessment phase, the necessary technology, application and process related initiatives should be identified and logically grouped into projects. This can form the basis for developing the organization's overall BI roadmap and the initial pilot solution. The detailed implementation plan should include pilot implementation recommendations, project plan, resource requirements, timeframes, milestones, testing and evaluation guidelines for the pilot solution. 2.3 Phase 3 Implement In a majority of our client engagements, we have observed that the business requirements are often emergent and rapidly changing primarily due to the phased nature of BI deployments. This mandates a development approach that can easily accommodate the changing requirements and yet develop a robust solution that meets the client expectations. To effectively manage these varying requirements, YASH recommends agile development methodology to our clients, which helps in developing small, incremental releases and continuously iterating. Agile software development is a conceptual framework for software engineering that promotes development iterations throughout the life-cycle of the project. To start with, companies should focus on the delivery of pilot BI solutions using the highly iterative agile methodology which is geared towards rapid development time frames and can deliver a working system at all points in the lifecycle as shown in Figure 3. Based on our experience, organizations have been able to bring down the implementation cycle time by 20%-30% by using the agile development methodology. 5
YASH s Agile Approach Synergy Blueprint Release (Regular iterations of 2-4 weeks) Release 1 Release 2 On-Going Releases High Priority Periodic Assessment and Re-Prioritization Story Backlog The key activities in this phase will include: Figure 3: Iterative Delivery Model Synergy Workshop: By using a rapid, highly interactive solution-definition process organizations can develop a road map to achieve the desired business results based on a shared vision of the future. The primary objective of this phase should be to prioritize requirements and define measurable business results (MBRs) which can be tracked after the solution deployment. Blueprint Release: During this phase, organizations should execute on the plan for developing the defined BI architecture by leveraging DW and BI infrastructure to pull data directly from source systems wherever possible, and ensuring data quality by executing data management and validation strategies. The early iterations need to be focus on high-level technical design and the detailed design of the most business critical and risky features of the system. After the development team analyzes, develops and tests the core BI solution architecture which is 10%-20% of the final solution, end users feedback should be collected to improve the system functionality. In our experience, the continuous feedback loop created between the end users and development team allows quick problem resolution, thus ensuring that the maximum value is delivered within budget and timeline constraints. On-Going Releases: Based on the feedback obtained from previous releases, the development team should perform periodic assessments and prioritize functionality such that the low-value, low-risk capabilities are completed in later iterations while the must have functionalities are delivered on a priority basis. While the blueprint release plan focuses on mitigating risks, this phase focuses on delivering functionality based on value and business priority. It is also critical for the development team to test the iteration for functionality and scalability issues. Unlike traditional big bang build phases where the bulk of testing is done after all functionality is complete, the agile methodology focuses on testing throughout the implementation phase. This constant testing helps reduce risk and offers greater flexibility in getting early releases of the solution into the hands of users. Based on our BI deployment experience, the Testing Services depicted in Figure 4 are required for testing the BI application. 6
Stress and Volume Testing End-to-End Integrated Testing End User Browsing and OLAP Testing Load Testing Transformation Testing Ad-hoc Query Testing Security Framework Testing One Time Population Testing Down Stream Flow Testing Parallel Testing Figure 4: BI Testing Services 2.4 Phase 4 Govern One of the risks often underestimated by a majority of our customers involves the people aspects of adoption. It is important to recognize that delivery of any new tools to the end users results in a significant change in the way they work. As for any major technology deployment, organizations need to have strategies to manage change in order to ensure complete benefits realization from their BI deployment. Based on our experience in helping companies improve user adoption, YASH has developed a change management framework which is a set of practices, tools and techniques to help organizations tackle the change management issues. The activities involved in the Govern Phase will include: Assessment: As a first step, organizations need to identify and map sources of resistance and drivers of commitment by using intelligence gathering techniques such as interviews, group discussions, and meetings. This can help in determining the areas/ individuals in the categories of Champions and Resistors and formulate appropriate strategy for each category. Communications Planning: By partnering with HR and marketing teams, the BI strategy team should create formal change impact awareness campaigns using traditional marketing techniques such as communications planning, audience segmentation based on the assessment, and message targeting to address specific stakeholder concerns. The formal communication plan ensures that all end users are informed about the changes and the resulting impact on individuals' roles. Project Execution and Change Management Post-Mortem Reviews: To improve future project success rates, it is necessary that post-deployment reviews of key project components such as governance and communication, user adoption, risk management, financial aspects are conducted. Once documented, these findings can be leveraged for future BI projects. Utilization Improvement: By utilizing performance and utilization tracking metrics after solution deployment, as demonstrated in the Table 1, step-up programs can be devised based on the findings. The step-up programs can include enhanced training, fine-tuning the applications based on user feedback, and seeding power users within the user groups to drive utilization. This ensures that the expected benefit metrics and ROI defined in the business case are actually delivered to the customer. User Training: To familiarize the end user base with the new technology and ensure user adoption, organizations need to allocate resources to train end users on technology and the resultant change across the implementation lifecycle. Extend: After ensuring that the quick win pilots are successful in demonstrating the business value of the BI framework, organizations can define next steps which can include expansion of the functionality of the pilot implementation and the planned evolution of the organization's BI landscape. For delivering on the planned evolution, the development team can use a similar iterative approach for solution definition, delivery, and value realization as described in the earlier sections. 7
Key Metric Benefits Perceived by Employees Benefits Perceived by the Company Actual Utilization Statistics Select Performance Metrics and Indicators Performance Indicators Time saved in daily/weekly workflow execution Time saved in reports creation and data collection Improved decision making capabilities Increased confidence in decisions made Improvement in professional status Incentives, rewards, performance-based compensation hikes Improved customer engagement due to quick problem resolution Improvement in new/repetitive business Number of business innovation strategies defined due to better business intelligence Number of strategies implemented and their cost/benefit impact Unique log-ins to BI platforms Count of active users in the first three months/six months/year of deployment Growth of unique authenticated users Utilization of different BI tools and a comparative analysis Number of hits generated per time period Number of unique users per time per BU/functional group Pattern of average hourly usage figures Tracking Measure Surveys Interviews with Business Stakeholders, Financial analyses reports Database Logs Table 1: Performance Metrics and Indicators 3 Conclusion Business Intelligence can provide increased visibility into financial and operational performance so that organizations can reduce operational costs, make smarter operational decisions, and continue innovating so that they can not only survive but thrive even in an economic downturn. However, success with BI initiatives requires a long-term view that looks to provide a foundation and structure that helps promote economies of scale as future requirements arise. By using a phased delivery approach organizations can build initial momentum for the BI initiative and garner executive support as tangible business benefits are realized. Through our years of experience implementing BI solutions, YASH has found that our BI Maturity Model provides a blueprint for organizations looking to begin with a modest start, envision enterprise capabilities and evolve over a period of time by delivering through multiple iterations. IT organizations must adopt best practices and principles that can help them create a future-proof BI architecture that continues to evolve with the organization. After all, Rome wasn't built in a day! 8
Excerpt from Part II of this whitepaper: Organizations have invested significantly in Enterprise Applications such as ERP, CRM, and SCM that offers the ability to effectively capture data across the business processes in an extremely granular manner. However, this data can be leveraged as information and translated into action only with the deployment of a comprehensive BI solution. BI solutions can be implemented by leveraging your enterprise applications platform to achieve the following: Consolidate your financial statements across different business units Enable effective budgeting and forecasting for future financial projects Integrate organization goals to people and process metrics to effectively manage enterprise performance With the objective of meeting the near term needs of BI while building the foundation for the future BI needs of the enterprise, YASH has developed a prescriptive BI architecture based on our experience implementing BI solutions. The prescriptive architecture leverages the data available in your enterprise platforms and enables organizations to begin with a modest and achievable start, and evolve over time by delivering added capabilities through multiple iterations. About the Authors Sameer Bhagat is a Service Offering Manager with the Solutions Consulting Group, YASH Technologies. His experience stems from having worked with global consulting firms focusing on IT Strategy Development and IT's transformation as a business value partner. He is instrumental in developing YASH's Go-To-Market Strategy for Business Intelligence and continues to provide consulting on areas of Application Portfolio Rationalization, IT Strategy and Microsoft Technologies. He can be reached at: sameer.bhagat@yash.com. Sriram Jayaraman is Vice President, YASH Technologies and oversees the Presales and Consulting teams focused on enterprise solutions. With years of experience at organizations such as Sapient and Microsoft, Sriram brings extensive strategy development expertise and actively advises customers seeking better IT alignment with business vision. He can be reached at: Sriram.jayaraman@yash.com. If you would like to receive an early copy of part 2 of this white paper before it is available to the public, please email us at: info@yash.com to request a copy. 9 YASH Technologies www.yash.com/contactus Global Presence - USA EU MEA APAC California Illinois Massachusetts Missouri New Jersey Texas London Bahrain Hongkong Singapore Hyderabad Pune Mumbai Bangalore Indore World HQ: 605-17th Avenue East Moline IL 61244 USA Toll Free: 877-369-YASH Tel: 309-755-0433 Fax: 309-796-1242 EU: The Mille-II Floor 1000-Great West Road Brentford London TW89HH UK Tel: 44-20-8261-4408 Fax: 44-20-8261-4418 India: 201-205 Bansi Trade Center 581/5 MG Road Indore MP 452001 India Tel: 91-731-426-1100 Fax: 91-731-420-6593 TM BI-PartI-WP-0909 2009 YASH Technologies. All rights reserved. Referred products/ services may be registered trademarks of belonging companies.