Using business intelligence to drive performance through accuracy in insight

PERFORMANCE & TECHNOLOGY Using business intelligence to drive performance through accuracy in insight ADVISORY

Even when a BI implementation represents a significant technical achievement processing terabytes of data or spanning multiple geographies it can still lack business value. BI tools that efficiently process and deliver vast amounts of data often fail to produce actionable insights, making it all too easy to focus on the wrong information.

Using business intelligence to drive performance through accuracy in insight 1 Running a business and effectively competing in the marketplace demands timely, reliable, and relevant insights. And while Business Intelligence (BI) emerged as one of the most promising answers to this longstanding need, delivering on its promise remains a challenge, despite significant investments by many organizations. The problem is one of accuracy and lack of insight. All too-many BI tools make it easy to focus on the wrong things and draw the wrong conclusions. By one estimate, 70 percent of companies use BI metrics that aren t reliable or statistically valid*. BI has yet to completely displace the spreadsheet, a 30-year old technology. The Issue When aligned with business goals and well executed, BI enables an organization to harness performance drivers and risk and to make better, more timely decisions. Used effectively, BI provides insight into many facets of a business from financials to customer satisfaction, from supply chain efficiency to marketing and sales performance. The result: increased control, greater responsiveness, and better performance. That s the goal. Yet today, decades after the first spreadsheet transformed the way we do business, BI remains beset with limitations. Managers find themselves without the information they need and often don t realize that their current BI tool is the culprit. Costly, difficult-to-use systems; siloed, hard-to-access data; confusing, indecipherable metrics; and a dependence on over-burdened resources are just part of the story. A more critical issue is poor alignment between the dynamics that drive a business and the underlying analytical models employed by BI solutions. Even when a BI implementation represents a significant technical achievement processing terabytes of data or spanning multiple geographies it can still lack business value. BI tools that efficiently process and deliver vast amounts of data often fail to produce actionable insights, making it all too easy to focus on the wrong information. Frequently, managers are left perplexed by forecasts that fail to materialize, penalized for acting on incomplete or inaccurate information, or paralyzed by a lack of confidence. In response, they turn to spreadsheets the same spreadsheets their BI solution was intended to eliminate. This only exacerbates the problem by creating separately controlled domains of knowledge and choking off the flow of information. * Coming Up Short on Non Financial Performance Measurement, Ittner and Larcker, Harvard Business Review, 11/03

2 Using business intelligence to drive performance through accuracy in insight Case Study: Introducing a new governance model to increase productivity A major automotive distributor needed to reduce spreadsheet proliferation and decrease decision errors. KPMG s BI professionals structured a multiphased program, building toward the goal of integrated and efficient reporting with transparent governance that has a projected ROI of US$6.2 million over three years. KPMG Advisory practice believes it s imperative to shift the focus beyond the efficient delivery of information a technology-centric tactical approach and move toward accuracy in insight a strategic approach that places greater emphasis on the information itself. Our BI services support your efforts to: Define and utilize those metrics with the greatest impact on business performance Identify the factors and sources of data and information that can uniquely drive your organization s success Recognize, filter, and extract value out of financial and operational data to make better, more timely decisions across significant aspects of your business Provide each business unit with its own view of the data that truly works for its needs Advance a culture of decision making that makes use of the information and analytics Without complete confidence in the underlying data, assumptions, processes, models, and business context, you can t have confidence in the results. You should be sure you re looking in the right place to achieve accuracy in your insights. How we can help KPMG s Business Intelligence services can help you transform your organization s information and intelligence capabilities, whether you have business-focused strategic issues, technical implementation needs, or a mix of requirements. BI/business strategy alignment Business strategy alignment is the linchpin to BI success. A solid approach is one that s designed to support overall organizational goals and strategies. It s imperative that any BI approach links measures to outcomes, yet this kind of alignment has proved to be the stumbling block for many organizations. KPMG s Business Intelligence professionals can assist you with linking your BI solution to your strategy, enhancing or creating the right Key Performance Indicator (KPI) standards to better determine the path to success and evaluate progress toward your vision of the future. We can help you diagnose problems that can lead to gaps in visibility and control. Value creation Any organization has a host of opportunities locked within its existing information. But without the right connections between siloed data sources, it is difficult to identify those possibilities. We can help you reduce information overload and establish a culture of informed decision making. The implementation of a better governance model can eliminate surprises and allow you to trust your decisions. Revenue-generating opportunities become easier to identify, as do ways to lower costs and increase operational efficiencies. Risk is harnessed by tying it to performance. Rather than a costly distraction, compliance requirements can be turned into an opportunity and an investment in the business. Proficient, precise and pragmatic execution Tackling BI problems is a daunting challenge for many organizations. The array of available tools, process issues and competing priorities can leave any company puzzled about where to begin. We help you remove both process and technology barriers that keep information isolated, working towards integrated systems that increase capabilities, reduce costs and bring consistency to results. Experienced professionals from KPMG s Business Intelligence practice work with you as you seek to select the right tools and technologies and build an infrastructure that s optimized to meet your needs. 2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Using business intelligence to drive performance through accuracy in insight 3 Potential of existing BI investments realized To achieve an integrated approach, frustrated organizations may feel that they must start over to achieve BI success. But this isn t true. Existing investments in tools and processes need not be abandoned. KPMG s BI practitioners can help you identify issues that prevent your systems from delivering their expected value, whether from inconsistent linkages to business goals, organizational barriers or problems in design or implementation. Additionally, we can assist you in seeing not only what needs to change but help you determine how to change it. What we offer To help you realize the full value of BI, we have created a six-part BI framework that takes a broad approach to developing your strategy to meet your particular needs whether leveraging existing investments or starting anew. Each service offering within the framework can be delivered individually or as part of an integrated package, based on your particular needs. Business strategy alignment: The strategic foundation These offerings help you establish the vision for BI and translate it into a framework that communicates and measures business strategy at all levels of the organization. Critical success factors are identified, and KPIs are defined to track each objective. Governance: The guiding principles These offerings support you in designing a governance structure that includes a clear articulation of the roles and responsibilities for BI. You can establish principles, processes and the organization structure required to ensure integrity and alignment of information to meet business needs. Performance management process and reporting: The pivot point A framework is built for business-unit and enterprise-level performance management based on four key steps: measurement, performance reporting reviews, tracking and remediation, and rewards and compensation. These offerings focus on the delivery of information that can change business performance outcomes. Integrated information management: The lexicon and blueprint These offerings deliver an architecture and process for integrating business, process, and functional measures through master data management and KPI standardization, including data cleansing and Extract, Transform, and Load (ETL) design. BI platform: The looking glass These services provide the linkage between the data dictionaries and business reporting requirements by designing the visual and functional aspects of reporting dashboards. Where applicable, BI tools are evaluated and recommendations provided. Infrastructure: The toolkit A complete assessment of current hardware and software infrastructure is conducted. These services assist you in developing enterprise standards for infrastructure, security, metadata capture, and data accessibility. How we re different KPMG s Business Intelligence professionals apply the same principles and techniques to BI that are applied to all engagements. It s a fact-based approach. We don t assume that your challenges are like everyone else s nor do we apply cookie-cutter strategies to address problems. Case Study: Articulating a clear information management strategy An international brewery business was undergoing an extensive transformation of its back office functions finance, HR and procurement. KPMG s Business Intelligence practitioners helped them develop an information strategy and a BI architecture that allowed them to reduce 30 ERP instances to one. This, in turn, has reduced report duplication, provided better data transparency, and increased the speed at which they get information.

4 Using business intelligence to drive performance through accuracy in insight Case Study: Improving existing BI system performance and value A large energy company was experiencing long and inconsistent planning and forecasting cycles partially as a result of poorly configured planning technology. KPMG s Business Intelligence professionals helped them reduce data and system proliferation by decreasing the total number of applications by more than 50 percent and the total number of reports from over 700 to less than 125. With this significant reduction in application complexity, support hours were reduced by 15 percent and their planning cycles are five days shorter. We draw from deep industry experience and understanding of business issues and BI technologies. We bring diverse teams of KPMG member firm professionals who specialize in functional areas such as information technology, business process, governance, change management, master data management and many others. We tailor the project team by carefully selecting professionals with specialties that match your unique circumstances. KPMG member firm professionals can access a broad set of competencies and experience in accounting, tax, regulatory issues, transaction services, forensics, compliance, and financial risk. We have experience across a wide range of standards, technologies and vendors. We re impartial and objective, with the freedom to help you select the right options for you. Our only interest is defining and deploying an effective and efficient BI solution that meets your needs not ours or a third-party vendor s. We employ a collaborative and teamoriented work style, an approach that helps you maintain the appropriate leadership and involvement and promotes the transfer of knowledge back to the appropriate personnel in your organization. And we re truly global. With KPMG member firms in 144 countries, we have global breadth and local-market knowledge of business conditions and capabilities; a broad understanding of the issues that impact specific industries; and experience with the legal and regulatory requirements affecting business processes and information technology. Our goal is to help you realize the true economic and business value of your information assets. We understand that leveraging information to maximize business value is a strategic imperative and a competitive necessity today.

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kpmg.com For more information, please contact: Global Jeanne Edwards Johnson Principal KPMG in the United States Office: 212-872-5570 Mobile: 704-661-1605 jeannejohnson@kpmg.com Americas U.S.A. Linda Imonti Principal KPMG in the United States Office: 312-665-2913 Mobile: 312-972-2649 limonti@kpmg.com Canada Paul Curitz Associate Partner KPMG in Canada Office: 416-777-3397 pcuritz@kpmg.ca EMA Steve Gallagher Partner KPMG in the United Kingdom Office: +44 (20) 73113881 Stephen.Gallagher@KPMG.co.uk Herman Heyns Partner KPMG in the United Kingdom Office: +44 (20) 73114478 Mobile: +44 7775822674 Herman.Heyns@KPMG.co.uk Bernd Trautwein Partner KPMG in Germany Office: +49 (89) 9282-1825 Mobile: +49 (172) 8519788 btrautwein@kpmg.com ASPAC Wah Lee Ho Executive Director KPMG in Singapore Office: +65 (6411) 8008 Mobile: +65 9748 1398 wahleeho@kpmg.com.sg Simon Martin Partner KPMG in Australia Office: +61 2 9335 7415 Mobile: +61 401 718 171 simonmartin@kpmg.com.au Randy Wong Director KPMG in Australia Office: +61 (2) 9335 8046 Mobile: +61 424 140 728 randywong@kpmg.com.au The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. KPMG and the KPMG logo are registered trademarks of KPMG International, a Swiss cooperative. 2009 KPMG International. KPMG International is a Swiss cooperative. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Printed in the U.S.A. Document code: AD085