APPA 38

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APPA 38 Business Intelligence Solutions for the
Workplace
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Agenda

• What is EPM?
• What is BI?
• Why is it important?
• How to do it?
• Pitfalls
• Whats coming next?
• Q A

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What is Enterprise Performance Management (EPM)?

• Corporate Performance Management (Gartner)
• Methodologies, metrics, processes and systems
  used to monitor and manage the business
  performance of an enterprise.
• Business Performance Management (Forrester)
• It is not simply a reporting system it is a
  tool for implementing business strategy, but it
  is of little value without the organizational
  commitment and cultural transformation to make it
  work.
• Enterprise Performance Management (AMR)
• It is an emerging superset of applications and
  processes that cross the traditional department
  boundaries to manage the full lifecycle of
  business decision-making.

Common Themes Business Intelligence, Analytic
Applications, Methodology
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What is EPM?

• Not a single product
• BI applications, methodologies, and change
  management
• Linking strategy to action
• Metrics (KPIs)
• Information delivery, right person, right time
• Process automation and optimization

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Gartner CPM Magic Quadrant Chart (2005)
Source Gartner
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What Is Business Intelligence?

• BI is a term invented by Gartner in 1992
• BI provides access to structured info
• Reporting that is analytical or informational
  in nature
• Ad hoc reporting, OLAP, data mining, BAM,
  scorecards, and dashboards
• Data warehouse reporting
• Even operational reporting
• Answers questions, informs, alerts

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What Is Business Intelligence?

• Business Intelligence is
• A term invented by Gartner in 1992
• An integrated suite of tools that provides
  organization-wide reporting and analysis via
  role-based dashboards, delivering the right
  information to the right people at the right
  time.
• Cross-functional data, both structured and
  unstructured data and operational systems, comes
  together to provide sharply focused views.
• Users can navigate smoothly from alerts to
  interactive analysis down to detailed reports and
  even to the transactions all while maintaining
  the context thats critical to root cause
  analysis.

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Definition What is Business Intelligence?

• BI transforms raw transactional data collected
  within business applications into actionable
  information
• BI delivers the right information to the right
  people at the right time
• BI focuses on improving decision making processes
• BI improves the ability of the business to manage
  performance versus targets at all levels
• BI provides visibility to the root drivers of
  financial performance
• BI links strategy to action
• BI links people, processes, and information

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Challenges with BI Solutions

1. What are my most profitable areas of improvement?
2. Where is the data, is it relevant?
3. How often is the data updated, is it current?
4. Who should get this information?
5. Is this Information good or bad?
6. What should users do with this information?
   ACTION!

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Business Requirements

• Statutory, Operational Reports
• Monthly, quarterly, vs. budget, benchmarks
• View, print, archive,
• Secure delivery with low administration
• Exception Alerts
• Nearing budget, out of stock, overdue..
• Get further info (guided/root cause analysis),
  take action,
• Analytical Views
• Transform data to optimize analysis
• Interactive analysis (slice dice), find trends,
  find opportunities
• Work Lists / workflow
• Filtered lists of records that need your
  attention
• Knowledge capture

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Business Intelligence Hierarchy of Needs
Optimizing Closed loop processes, business
planning, application integration, collaboration,
continuous improvement
John Hagerty, AMR Research Performance
Management Maturity Model
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A Portfolio of Solutions is Required
Conceptual diagram based on Business
Intelligence Key Trends and Evolving Markets,
Bill Hostmann, Gartner Mid-Sized Enterprise
Summit West 9/20/04
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Business Intelligence Crosses Organizational
Disciplines
Conceptual diagram based on Business
Intelligence Key Trends and Evolving Markets,
Bill Hostmann, Gartner Mid-Sized Enterprise
Summit West 9/20/04
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Market BI is a top Priority Among CIOs
2006 CIO Technology Priorities
To what extent will your investment in each of
the following technologies change in 2006?
Ranking
Spending Increase
2005 2006 Business Intelligence (BI)
1 2 4.8 Security enhancement tools 2 1
4.5 Mobile workforce applications 3
3 3.9 Collaboration technologies 4
3.6 Customer sales and service technologies 5
8 3.4 Service-oriented applications
and architecture (SOA, SOBA) 6 11
3.2 Workflow management 7 4
3.2 Networking, voice and data communications
8 7 3.0 Virtualization (storage, computing,
data center) 9 10 2.9 Legacy application
modernization and upgrade 10 5 2.5
New question for 2006
Source Gartner EXP 2006 CIO Survey
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Gartner BI Magic Quadrant Chart (2005)
Source Gartner
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Market Global Business Intelligence Market Size
10.2 billion in 2009 5 Compound Annual Growth
Rate (CAGR)
Millions of U.S.
2005 market sizes are preliminary
Source Gartner
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Macro BI Market Trends in Buying BI Software
Worldwide License Revenue By Vendor Type
Millions of U.S.
2005 market sizes are preliminary
Source Gartner
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EPM/BI Benefits

• Makes things happen faster.
• Helps instill discipline, predictability, and
  certainty into business processes.
• Ensures the right people are always aware of the
  right information at the right time and take
  action!
• Relieves people from having to monitor
  information manually.
• Makes multiple applications and data sources work
  as one.
• Knowledge capture around roles
• Speeds learning

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BI Examples
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ACTS Retirement-Life Communities, Inc.
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HealthPartners
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State of Michigan Screenshot.
State of Michigan
Test Data for Demonstration Use Only
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Factors in BI Failures
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What are the barriers to a successful BI
implementation?

• Core systems take precedence (e.g. go-live)
• Executive support funding
• No champion, ongoing EPM ownership
• Unclear business model / metrics
• Operational issues push to back burner
• Data access challenges
• Lack of understanding of value
• Unfamiliarity with tools, training skills
• Organizational resistance to change
• Expectations of cost and development effort

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Goals and Methodology

• Companies struggle to define goals for business
  intelligence
• How should you be performing as an organization?
• What are the best practices that will get you
  there?

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If Youre Missing the Yeast, You Cant Bake Bread

• Struggling to assemble the right ingredients to
  deliver cost-effective BI results
• Outside consulting
• BI tools
• Enterprise application integration
• Report creation
• Training
• Role-based personalization
• Etc.

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Irrelevance

• How to do irrelevant BI
• Ask questions that cant be answered.
• Provide intelligence based on bad data.
• Overwhelm users with FYI data.
• Take data out of context so it doesnt make sense.

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Seven Fatal Flaws of CPM/BI

• If we build it, they will come
• Managers need to work the numbers
• We dont have a data quality problem
• Our applications vendor will deliver the best
  solution
• We can get it right the first time
• We can outsource BI/CPM
• Just give me a dashboard
• Gartner June, 2005
• Bill Hostmann, Frank Buytendijk, Ted
  Friedman

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Factors in BI Success!
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Excellence is no accident World-class
organizations operate and perform very
differently than their median peers
Hackett 2005 Functional Performance Data
IT
Procurement
Finance
Human Resources
1,895
-10
0.85
1.26
WC
9,617
Median
8,715
1,422
0.73
0.68
Overall IT cost per end user
Median benchmark client identifies 4.8 Million
in potential HR cost savings per 10,000 employees
Median benchmark client identifies 5.3 Million
in potential finance cost savings per 1 Billion
of revenue
Median benchmark client identifies 1.7 Million
in potential procurement cost savings per 1
Billion of spend
Median benchmark client spends 9.0 Million less
per 10,000 end-users less adept at leveraging IT
to reduce labor costs
Source The Hackett Group
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World-class organizations are far more efficient
Length of plan and forecast development
Strategic plan
Forecast
Planning and performance management cost as a
percent of revenue
Source The Hackett Group
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World-class companies focus on limited measures
to reduce cycle time and improve content
Number of budget line items

• Best Practice Profile
• Exception-based reporting
• Use proportionately more leading, operational,
  external indicators
• Budget fewer line items and budget driven by
  tactical plans
• Forecast only major variables
• Vary forecast detail with time horizon

200
127
World-class
Median
Source The Hackett Group
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Information Access World-Class performers
enable efficient access to information
Percent of business performance reports generated
from a central data repository

• Best Practice Profile
• Consistent and pervasive use of key technologies
• Common definitions
• Common delivery infrastructure
• Personalized delivery
• Filtered content

62
48
Median
World-Class
Source The Hackett Group
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More complexity results in less time to focus on
value-added activities
Commitment of Time by Reporting Activity
Concentration of Skills
Historical Reporter
Insightful Analyst
11
21
6
16
14
Leader
Transaction Processor
17
15
Businesspartner
Accounting Specialist
Source The Hackett Group
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World-class companies spend twice as much time
analyzing data as they do collecting and
compiling data
Allocation of analysts time for standard reports
54
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Median
65
35
World Class
0
20
40
60
80
100
Collecting / compiling data
Analyzing information
Source The Hackett Group
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Average companies are internally and historically
biased
Measurement Source
Measurement Perspective
External operating
4.4
External financial
Leading or predictive
24.0
12.9
76.0
49.8
32.9
Internal operating
Internal financial
Lagging or historical
Source The Hackett Group
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Average companies still rely heavily on
spreadsheets
Percent of companies using spreadsheets as a
stand-alone budgeting application
54
44
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Median
World-Class
World-Class Efficiency
Source The Hackett Group
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So which Business Intelligence best practices
really matter?

• Top BI Best Practice Themes
• Metrics and Measurement Linked to Strategy
• Simplification Standardization
• Effective Governance
• Consistent Available Reporting
• Self Service for Information Access

Hackett studies show strong correlation between
use of best practices, lower BI costs and greater
business value.
Source The Hackett Group
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Top differences between Peer Group (median) and
World-class performers

• Commitment to strong performance
• Widespread use of best practices
• Constant measurement
• No end to the improvement process
• Strong culture of superior performance
• Execute, execute, execute

Source The Hackett Group
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Keys to successful EPM Implementations

• Sponsorship at C-level
• Visioning with CFO and operational VPs
• Inclusion of multiple functional areas
• Peer success / case studies (been done before)
• Momentum
• Need to attack significant pain point for pilot
• Deliver value at every phase
• Change management strategies
• Understanding of cultural barriers
• Identifying and empowering champions

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Change Management Strategy

• Understand and plan for it
• What is the history of the organization?
• Steady vs. Dynamic change
• Average tenure
• Known silos
• Are any areas anticipating cuts?
• Number of changes planned?
• Size of changes planned?
• Communication plan, rumor control

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How does Lawson-Hackett EPM solution work?
EvaluateProgress
World-ClassDefined
Lawson Professional Services Methodology
Trusted Lawson advisors together with Hackett
transformational consultants deliver the solution
Execute
QuantifyOpportunity

• C-Level Vision Session
• Create performance management strategy based on
  Scorecard results
• Develop a blueprint of prioritized business
  opportunities and performance improvement
  initiatives

Prioritize
Identify ProvenPractices
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Lawson Solution
Analytic Applications
Benchmarks Best Practices
Business Intelligence Platform
Data Warehouse
EPM Implementation Services
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The Future of BI
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What do we hear today About BI?

• Pervasive moving to operational
• Support for agility
• Support for speed
• Competing on Analytics Davenport, Harvard
  Business Review, January 2006
• Massive volumes
• BI reaching customers and partners

Have we really come this far?
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The People Who Use It Dont Think So
Source Hired Brains, Inc. research 2003-2004
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Future of BI

• Today
• Reactive, historical facts are gathered
• Time lagged, Analysis happens after the fact
• Elitist, power users only
• Disparate, departmental solutions

• Tomorrow
• Predictive, forward planning and modeling
• Near-Time / Real-Time - alerts trigger analysis
  during events
• Ubiquitous, users throughout org.
• Unified, integrated BI platforms, standards

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In the future BI will

• Go beyond your organization e.g. suppliers
  inventory of parts has dropped below safety
  stock level
• And will have business logic Risk of part
  shortage on production quantified
• And be able to respond proactively Automatically
  order from alternate supplier

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Questions?