Saturday, December 26, 2009

Successful BI Strategy - Part I

We often run into situations where major companies ask us to help develop a BI strategy. When we ask companies about the objective of implementing BI solution, we hear the following statements quite often
  • “…produce enhanced organizational capabilities to manage data and information as organizational assets.”
  • “…provide a single version of the truth.”
  • “…enable consistent and reliable access to accurate corporate-wide data.”
  • “…provide more sophisticated reporting and analysis, faster turnaround, improved accessibility and enhanced quality.”
  • “…a single touch point where detailed financial transaction information can be filtered on user-entered selection criteria, viewed online, downloaded in standard file formats and used to generate real time reports.”
These objectives doesn't excite business executives and managers as it doesn't articulate how business intelligence will be used within specific business processes to improve business performance.As a result, they underfund business intelligence, which limits its business impact. Very recently, we have faced a situation at one of the large organizations where in Business teams refused fund BI project. They didn't see any compelling reason & business case to implement BI solution.

Lot of time, organizations also get into functional requirements such as the following during BI product evaluation cycle
  • The system shall provide the ability to drill down, drill across, and slice-and-dice.
  • The system shall provide the ability to specify organizational hierarchies and display performance scorecards for each organizational unit.
  • The system shall enable role-based access to information.
  • The system shall provide capabilities to route alerts to business users according to user-defined parameters.
  • The system shall enable integration of data from multiple disparate sources.
BI functional requirements like those listed above are standard features of commercially available BI tools.While it is important to know what your company needs BI tools to do, BI functional requirements typically say little about the kinds of business information, analytical techniques and decision support that are required or the specific core business processes that the company seeks to improve via business intelligence.

As per Gatrner Report "Fatal Flaws in BI Implementation", it is very important to get buy in & active participation from business teams for a BI project to be successful. This requires a clear linkage between business strategies, the core business processes via which the strategies are executed, and BI-driven business improvement opportunities, which is the basis for a BI business case that is compelling to the business stakeholders.

Some examples of compelling BI system objectives can be as below,
  • " BI system will help reduce transportation cost by 5%".
  • "BI system will help reduce cash out situations at ATMs to less than 3".
  • "BI System will help reduce idle cash in ATMs by 40%"
  • "BI System will help increase private label sell by 5% in 80% of retail outlets".
  • "BI System will help reduce stock out situations to less than 2 per outlet for premium or fast moving items".
  • "BI System will help increase share of wallet by 10%".
Each of the above BI objectives are linked to a business process. It clearly tells business team how implementation of BI system can help them achieve their goals. It becomes easier to get buy in from business executives and managers when BI is directly linked to business process improvement.

When you develop a BI strategy, do not look at point solutions like reporting, data integration etc..It's always recommended to look at a business analytics framework which can help you improve your business processes and achieve your business goals. The framework will in turn comprises of set of solutions which can help you address your business problems.  Point solutions like reporting, data integration etc will help you gain short term benefits but it will not help you gain long term benefits & business support. 

Sunday, December 20, 2009

Fatal Flaws in Business Intelligence Implementations

Lot of organizations, assumes that business intelligence(BI) projects are like any other project, are often surprised when their BI project spins out of control. The requirements appear to be a “moving target;” the schedule keeps slipping; the source data is much dirtier than expected and is impacting the ETL team; the staff does not have the necessary skills and is not properly trained; communication between staff members takes too long; traditional roles and responsibilities, and how they are assigned, seem to result in too much rework; the traditional methodology does not seem to work; and so on.

BI Projects are often political in nature as lot of people do not like when their performance is being tracked by their management. This requires culture change & creating awareness about benefits of BI within end user community. BI Project should be seen as business enabler rather than a performance tracking tool. They should use BI system to meet or exceed their KPIs.

I have been thinking about writing on this topic for a long time but then I came across a nice research paper on this topic from Gartner. I have shared below the details of Gartner report as is. I have personally experienced and seen some of the flaws mentioned below in lot of BI projects very recently.

Most failed business intelligence (BI) efforts suffer from one or more of nine fatal flaws, generally revolving around people and processes rather than technology, according to Gartner, Inc.

Gartner said the failure to achieve strategic results usually stems from one or more of nine common mistakes:

Flaw No. 1: Believing that “If you build it, they will come”

Often the IT organisation sponsors, funds and leads its BI initiatives from a technical, data-centric perspective. The danger with this approach is that its value is not obvious to the business, and so all the hard work does not result in massive adoption by business users — with the worst case being that more staff are involved in building a data warehouse than use it regularly.

Gartner recommends that the project team include significant representation from the business side. In addition, organisations should establish a BI competency centre (BICC) to drive adoption of BI in the business, as well as to gather the business, technology and communication skills required for successful BI initiatives.

Flaw No. 2: Managers “dancing with the numbers

Many companies are locked into an “Excel culture” in which users extract data from internal systems, load it to spreadsheets and perform their own calculations without sharing them companywide. The result of these multiple, competing frames of reference is confusion and even risk from unmanaged and unsecured data held locally by individuals on their PCs.

BI project instigators should seek business sponsors who believe in a transparent, fact-based approach to management and have the strength to cut through political barriers and change culture.

Flaw No. 3: “Data quality problem? What data quality problem”

Data quality issues are almost ubiquitous and the impact on BI is significant — people won’t use BI applications that are founded on irrelevant, incomplete or questionable data.

To avoid this, firms should establish a process or set of automated controls to identify data quality issues in incoming data and block low-quality data from entering the data warehouse or BI platform.

Flaw No. 4: “Evaluate other BI platforms? Why bother”

“One-stop shopping” or buying a BI platform from the standard corporate resource application vendor doesn’t necessarily lower the total cost of ownership or deliver the best fit for an organisation’s needs.

BI platforms are not commodities and all do not yet deliver all functions to the same level, so organisations should evaluate competitive offerings, rather than blindly taking the path of least resistance.

Integration between the application vendor’s ERP/data warehouse and BI offerings is not a compelling reason for ignoring alternatives, especially as many third-party BI platforms are as well integrated.

Flaw No. 5: “It’s perfect as it is. Don’t ever change “

Many organisations treat BI as a series of discrete (often departmental) projects, focused on delivering a fixed set of requirements. However, BI is a moving target — during the first year of any BI implementation, users typically request changes to suit their needs better or to improve underlying business processes. These changes can affect 35 per cent to 50 per cent of the application’s functions.

Organisations should therefore define a review process that manages obsolescence and replacement within the BI portfolio.

Flaw No. 6: “Let’s just outsource the whole darn BI thing”

Managers often try to fix struggling BI efforts by hiring an outsourcer that they expect will do a better job at a lower cost. Focusing too much on costs and development time often results in inflexible, poorly architected systems.

Organisations should outsource only what is not a core competency or business and rely on outsourcing only temporarily while they build skills within their own IT organisation.

Flaw No. 7: “Just give me a dashboard. Now”

Many companies press their IT organisations to buy or build dashboards quickly and with a small budget. Managers don’t want to fund expensive BI tools or information management initiatives that they perceive as lengthy and risky. Many of the dashboards delivered are of very little value because they are silo-specific and not founded on a connection to corporate objectives.

Gartner recommends that IT organisations make reports as pictorial as possible — for example, by including charting and visualisation — to forestall demands for dashboards, while including dashboarding and more-complex visualisation tools in the BI adoption strategy.

Flaw No. 8: “X + Y = Z, doesn’t it”

A BI initiative aims to create a “single version of the truth” but many organisations haven’t even agreed on the definition of fundamentals, such as “revenue” Achieving one version of the truth requires cross-departmental agreement on how business entities (customers, products, key performance indicators, metrics and so on) are defined.

Many organisations end up creating siloed BI implementations that perpetuate the disparate definitions of their current systems. IT organisations should start with their current master data definitions and performance metrics to ensure that BI initiatives have some consistency with existing vocabulary, and publicise these “standards”.

Flaw No. 9: “BI strategy? No thanks, we’ll just follow our noses”

The final and biggest flaw is the lack of a documented BI strategy, or the use of a poorly developed or implemented one. Gartner recommends creating a team tasked with writing or revising a BI strategy document, with members drawn from the IT organisation and the business, under the auspices of a BICC or similar entity.

“Simple departmental BI projects that pay an immediate return on investment can mean narrow projects that don’t adapt to changing requirements and that hinder the creation of companywide BI strategies,” said James Richardson, research director at Gartner.

Link to Gartner report:

Friday, December 4, 2009

Intelligent Operational System

I just received an automated "telemarketing" SMS on my cell phone. Big deal and who cares, right? Well it isn't a big deal, and its doubtful anyone cares. But it did bring to mind an interesting reminder about the Intelligent Operational system when designing a customer experience.

The SMS was an automated SMS from Crossword. Those who do not know about Crossword, Crossword is a big book store chain in India. They didn't SMS me to sell anything. Instead, they were sending SMS to help me, which ultimately helps them.

The SMS was from the Crossword "Book Rewards" program. If you are not familiar with the Book Rewards Program, it is Crossword's customer loyalty program, where you scan a card at the point of sale and a percentage of your purchase counts towards an in-store credit or a gift voucher. Crossword mails you a gift voucher for the credit, and the credit can be used in the store.

The SMS was to alert me that my gift voucher, which I had forgotten about, would expire soon. It provided me with the details of my gift voucher, such as how much it was, and when it would expire. The information was provided a month ahead of the expiration date, which would allow me time to get a replacement voucher if I didn't receive the original, or provide me with ample time to schedule a trip or research a purchase. I wasn't thinking about going to Crossword in the near future, but I was considering buying a new book from Oxford Book Store which is located near our office. Now that I've been reminded that I have credit at Crossword, I'll buy it there.

It reminds us that we need to think about the "systems" in which our customers reside. These "systems" include technology, work, and social context components, and the interaction of these components provide opportunities, or limitations which we may not have considered. The automated SMS from Crossword provides a good example of the application of intelligent operational system, since it leveraged the capabilities of automated computer and telephony systems to reach into my "system" and gently provide a socially acceptable message indicating that "we miss your business, so please shop with us soon."

While designing applications, seriously consider the user's system, and the opportunities and limitations provided by the system. By applying these considerations to our designs, we can make applications which will ultimately be more helpful for our customers, as well as easier to use.